Full swing trading strategy
When choosing a strategy, traders should take into account their trading experience, personal character traits, deposit size and time available to make trades. The more strategies a trader is familiar with, the more experience he or she has and the more profitable situations he or she can see in the market.
The main goal of swing trading strategies in Nigeria is to make the most profit with a small number of trades. Swing trading is the best strategy that is based on using price movements whereby a position is held open for some time (usually a few hours to 2-3 days).
Why swing trading in Nigeria?
A trader who chooses swing player seeks to hold a trade open as long as the instrument is moving steadily in one direction (either positive or negative). As soon as there are signs of an impending price reversal - it is time to close the deal. To make a deal this way, you need a great endurance. Try it, and you will succeed!
Swing trading strategy in Nigeria depend on the market cycle, and to take advantage of its movement, a player must have excellent analytical skills, be able to act flexibly, and respond quickly to any change in the market situation.
Features of a swing trading strategies stocks in Nigeria:
- Volume of transactions. Large leverage is not used. The open position should be able to withstand occasional and short-term trend corrections.
- Entry points - the moment when the trend reverses and a new trend emerges. Usually it is a strong news event, which causes the reversal. It is necessary to be able to distinguish the news, which can form a powerful long-term trend. You should open a position when you are absolutely sure of a reversal, and if the range of movement against the trend is greater than the usual amount of correction.
- Trade duration. The transaction remains open as long as profit is generated. It is recommended not to close profitable trades, but to fix the profit by Take Profit.
- Closing of transactions. The reason for exiting a trade can be either news that, in the trader's opinion, will change the trend to the opposite direction, or the beginning of a reversal.
To enter the trade, it is recommended to choose the medium-term trend in its initial stage. With the right entry, the position immediately begins to grow in the direction of profit.
The advantage of swing player is that an open position for 2-5 days gives you the opportunity to exit the trade when sufficient profit is made and "stay out", without reacting to jumps in instrument price movements. You can make profit regardless of the direction of the market and earn in any situation. Usually, the returns generated by this style of trading are greater than those generated by scalping and other intraday strategies.
For which players are swing trading strategies stocks suitable in Nigeria?
Who is suitable for:
- For the patient, cold-blooded and discreet player.
- For those who seek to make money on the quality of trades, not their quantity.
- For those who have the ability to set large stop orders.
Not suitable for whom:
- Players who trade in an active and fast-paced style.
- Traders who are impatient and want to get a fast result on trades.
- Players who cannot spend hours and hours analysing the market on a daily basis.
Because positions can be open for several days, it requires more funds to start swing player than intraday trading. At first, a trader needs to get acquainted and gain basic knowledge, learn how to identify trends, and calculate risks.
If a player is willing to take the time to learn all the intricacies of swing trading strategies stocks in Nigeria and learn to manage his emotions, this style of trading will bring him good returns. So go for it, have a successful trading!
Strategy: support and resistance range
Used to trade within a specific market range between the current support and resistance lines.
Pay attention to:
- Identify the range in the market;
- Wait for price to break down the support line;
- If price breaks below the broken support line, wait for price to rise strongly above the new support line;
- After the price fails to accept it, open a long (buy) position at the next candlestick opening;
- Place a stop-loss on one mean true range below the candlestick's low, and take profits before resistance.
Strategy: Wave trading
The point of the strategy is to catch "one move" in the market. But in all types of markets, there is a possibility that such a move may not happen. In this case, you need to trade more to get more, as the best is waiting for you at the top.
The strategy consists of basic steps:
- Identify the trend approaching the 50MA;
- When the market reaches this moving average, wait for the non-acceptance of the high price;
- Once the higher price is rejected, open a long (buy) position on the next candle;
- Place a stop loss on one mean true range below the low of the candle, and profit before the fluctuating high.
If you want to profit from swing player, find that "one move" in the market. Convince yourself of the effectiveness of this swing day trading strategies in Nigeria.
Strategy: a counter-trend strategy
The essence of the strategy is to open a down position at the high of the uptrend swing. Then, after the correction phase is over, we can return to the long side by opening a position on the low of the resumed uptrend.
Strategy: to capture profits
A trader needs to identify the lowest point on an uptrend and place a stop loss under it. After that he should find the maximum of the previous uptrend and place a take profit order approximately at this level. This way, if the price fails to meet expectations and falls below it, the stop loss will prevent from losing the deposit. And if the price rises above the previous high, the trader is guaranteed to make a profit.
Strategy: a vanishing move
The essence of this strategy is that you need to go against the momentum in the market. If you are the type of player who prefers to go against the majority, this strategy will definitely suit you.
For the strategy to work, follow four steps:
- Identify a strong upward momentum towards the resistance line in the market with a possible previous high;
- Identify a strong move away from the price, with a candle forming a bearish close;
- Open a short position (sell) at the level of the previous candle, and place a stop-loss on the one-mid true range above the candle's high;
- Take profit before the fluctuating low.
Swing trading became popular in the early 1900s and is based on a technical methodology for determining the duration of a previous market swing in relation to the overall technical structure of the market and predicting the next swing. According to SDG Trade, swing trading strategy work particularly well in a trending market.
Swing trading in Nigeria uses both technical analysis and many elements of fundamental analysis. A trader needs to work on analysing the market as a whole, studying the sectors in which the stocks in the portfolio are included. The key skill for making money from swing trading strategies is the ability to identify the current trend. Therefore, all analysis methods and strategies aim to do just that.
Elements of fundamental analysis
Swing traders monitor the news background for assets of interest to them, in order to react to positive or negative news in a timely manner. They open or close positions accordingly. Often, in addition to the news about the issuing company, such traders keep track of news about the industry segment, as well as competitors.
Combination of fundamental and index analysis
Sometimes swing traders add index analysis to the news analysis, i.e. they monitor stock indexes for a group of assets of interest. This approach gives the most complete picture of the industry as a whole. And to make preliminary forecasts concerning price movement.
Technical analysis is very varied - there are a lot of methods and strategies to determine the current trend. So, a swing trader can use trend lines, VSA or pobar analysis. Often, technical indicators, such as Moving Average, MACD and Fibonacci levels are useful.
How to invest with swing stock trading strategies in Nigeria?
In order to trade swing day trading strategies in Nigeria, you need to go through the procedure of opening a brokerage account in your personal account. You do not have to travel to the broker's office to open it, everything is done remotely. To open an account with your broker, you need to provide your personal details (name, email address) and confirm the registration process. After the registration and confirmation of your account details, you can proceed to deposit into an approved trading account, using one of the payment methods provided. This can be done by transferring money using the selected funding method.
When opening a trade, the trader may include leverage, which means that his trade will grow in size. Leverage is funds provided by the broker to make a trade, subject to the client depositing a certain amount as collateral. It can mean a large profit or a much larger loss.
On the trading platform you will have access to a demo account. By trading on the demo account a beginner will get used to the trading terminal, learn its functions, test swing trading strategies, select technical indicators, etc. Figuratively speaking, a demo account is a training simulator, a market trading simulator. Trading on such an account is done with virtual money. Just get started, that's the most important thing - this is the first step!