Swing trading can be highly profitable trading activity. It is even more profitable than day trading. The stock market is like a casino. It is a fact that only 5% of the traders are successful in making consistent profits. A loss in the stock market makes a person wiser. It is possible to make consistent profits in the stock market. A trader needs the right approach and the right set of tools.
Every trader searches for the Holy Grail throughout his life. A vast majority of traders do not have the adequate preparations to trade in the stocks. If a person wants to become a professional trader, he must begin by trading a stock on the piece of a paper. A paper trading will bring out the flaws within his system. Trading a stock can turn out to be an expensive game.
A smart trader is the one who learns from his mistakes. If a person is successful in his first trade, he becomes over confident. The over confidence becomes his biggest enemy. The result is a sense of dejection. A loss has a far greater impact on the mind of a person. Trading a stock is about surviving.
Every trader has his own style. It is very important to recognize a trading style that suits the personality of an individual. Swing trading is not an exact science. It needs a systematic approach. There is a huge learning curve. It requires patience. Swing traders profit from the swings in a stock. A close observer of the market knows that a stock swings 10% on an average in a week.
Swing trading is about knowing the levels to trade. It is possible to beat the inflation with the help of swing trading. A person must plan to manage his risk efficiently. A trader must invest only a certain percentage of capital in the beginning. This will allow a trader to strengthen the flaws in his system.
A new trader must keep his hopes modest. A trader must be realistic about his goals, a very high goal might result in a disappointment. A new trader must focus on understanding the dynamics of the market. His goal must be to become an expert in price and volume relationship. Once he understands the concepts clearly he will be able to make consistent profits. A trader purely focusing on returns might become the victim of anxiety.