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Swing trading is a short-term trading approach that focuses on capturing price movements over a few days to weeks. It is widely used across asset classes such as stocks, currencies, commodities, and derivatives. This method suits traders who want to stay active in the market without tracking prices throughout the day, relying instead on trends, technical indicators, and structured trade planning.
The swing trading technique is a method used by traders. It involves making short-term trades to profit from fluctuations in different asset classes such as equities, currencies, commodities, and futures and options (F&O). Traders might hold an asset for several days to observe the right time to sell. Traders using this technique assume that market prices rarely move in a straight direction, and that traders can find opportunities to earn profits or cut losses in the minor “swings”.
Traders who use the swing trading technique focus on stocks or other securities that have high activity and significant price fluctuations. Here’s a step-by-step process of swing trading:
For new and regular traders, it is important to understand how this trading technique works, consider the following swing trading example:
A stock XYZ has been rising and is around INR 1,300 after a few weeks of gains. After the rise, the stock pulls back to about INR 1,200 because some investors book profits.
Managing your trading capital is just as important as identifying opportunities. Keeping funds in a DBS Treasures premium savings account can help you maintain liquidity while staying prepared to act on market movements.
When it comes to swing trading, traders rely on tools or indicators to get the insights into market trends, momentum, and potential reversal points. Some of the most effective indicators/tools used for swing trading are:
Average True Range (ATR) – A metric that gauges a stock’s volatility by averaging its price movements over a specific period. It helps swing traders estimate the typical range within which a stock’s price fluctuates.
Beginners who want to get started in swing trading should be aware of key strategies while planning their investments and returns.
Day trading and swing trading are both active trading techniques used in India for stocks, forex, indices such as the Nifty 50. The primary distinction lies in how long positions are held, the level of involvement required, and the type of risk exposure each strategy carries. Here are the key differences between both strategies.
Aspect
Day Trading
Swing Trading
Time Commitment
Full-time involvement; continuous monitoring
Part-time; periodic review of charts
Trade Frequency
Multiple trades within a single day
Few trades over days or weeks
Risk Profile
High volatility; rapid gains or losses
Exposure to overnight gaps; broader moves
Capital & Leverage
Lower capital; higher leverage typically used
Higher capital; relatively lower leverage
Stress Level
High; requires quick decision-making
Moderate; allows time for analysis
Swing trading offers a balanced approach for traders seeking short-term gains without the intensity of day trading, holding positions for days to weeks to capture price swings. As a trader it is important to understand the pros and cons of swing trading.
As you gain experience and begin managing larger portfolios, structured guidance becomes more important. Platforms like DBS Treasures wealth account offer access to curated insights and portfolio support, helping you align short-term trading with long-term financial goals.
Swing trading offers a practical way to capture short-term market movements without constant monitoring. By holding positions for days or weeks, traders can balance flexibility with opportunity. Success depends on clear planning, disciplined risk control, and consistent use of indicators. While it reduces the intensity of day trading, it still carries risks such as overnight price gaps, making a structured approach essential for long-term consistency.
Disclaimer: The information provided in this article is for general informational purposes only. For specific guidance or details, please consult with your Relationship Manager or a relevant expert.
