Swing trading is a style of trading in stock or currency that endeavors to capture gain over one to four days of movement. Swing trading stocks are those which are blessed with momentum to move very fast. A stock which plays near the same mark for a month or so cannot be referred to as a swing trading stock.
Institutional and leverage players deal in volumes. This disables them to move out of a stock very quickly. This is why swing trading stock is not for them. As a swing trader, you can look for the tools of technical analysis to find when a swing trading stock might reverse. Swing traders can then play for those reversals.
Fibonacci retrenchment graph is one such technical tool. It suggests that a swing trading stock might reverse above the ARI at 31.2 percent, 50 percent and 61.8 of its mark. Swing traders do not rely upon fundamental analysis but on the price trends and movement pattern of the stock.
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