Basics of Swing Trading

Trading in the stock market involves holding stocks with hopes of benefitting from a rise in their prices. While various stocks offer varied returns, the most common form of stock trading involves the selling and buying of stocks. Since all traders do not have similar interests, stock trading has evolved into various types to accommodate their needs. One such variety is Swing Trading.

What is it?

Swing Trading refers to stock trading that allows traders to make quick gains. It enables them to buy and hold stocks for a brief period which they eventually sell when the prices go up. The stock is usually held for a few days or up to about two weeks and enables traders to make a quick profit because of a change in the stock price within a short span.

Benefits

The following pointers allow you to benefit from Swing Trading:

• Large-Cap stocks which are actively traded on major stock exchanges have regular price swings. Hence, it is a good idea to invest in them.
• Use the Exponential Moving Average while doing an investment.
• Preferably invest in market sectors which do not go bear or bull in the long run.
• Close the trade in a profitable position instead of trying to reap the maximum possible profit.
• Keep an eye on the direction of movement of an asset’s baseline so that you can invest in it at a profitable time.

To trade in the stock market, you need a Demat and Trading Account. If you are wondering what is a Demat Account or why you need a Trading Account, the following points might help:

• A Demat Account functions as a repository of shares, and stores them in an electronic format. This is because, today, you can trade digitally. So, when you buy a share, this account enables the safekeeping of such a share digitally. Hence, it eliminates the challenges associated with physical share certificates.
• On the other hand, a Trading Account enables you to buy or sell shares in the stock market instead of physically being present on the trading floor to do so.

How to open one?

To open a Trading Account, follow these steps:

• Select a reliable firm or stockbroker after comparing their brokerage services and rates.
• Fill out and submit the account opening forms and carry out the KYC process online.
• Next, submit all the required documents.

Once approved, you will receive your account details. Now, if you are wondering how to open a Demat Account online, follow the mentioned steps:

• Select a Depository Participant and go to their website.
• Fill out the account opening form, upload the required documents, and complete the KYC requirements.
• After your details are verified and approved, you receive a Beneficial Owner Identification Number. After this, you can start your Swing Trading journey.