Swing Trading and Trend Trading most traders often choose for themselves one of these two popular trading strategies.

However, many traders just randomly adopt these two opposing strategies without knowing how this affects their trading. Determine whether you are a Trend Trader or a Swing Trader to hone more knowledge to help your strategy develop in the right direction.

In theory, Trend Trader risks an uptrend or a downtrend and holds orders until the trend changes. In contrast, Swing Trader trades in a certain range of sideways markets, buying at support and selling at resistance (sideways trading form).

Swing Trading tends to perform better when applied to shorter timeframes while trend-following trading strategies can be applied over months. However, the distinguishing feature of these two strategies has increasingly blurred in recent decades due to the emergence of real-time graphs for all timeframes.

New and intermediate traders should decide to pick one of these strategies early in the period of learning from the market and stick with it until mastery, or until you find another suitable approach. with me.

Experienced traders can combine strategies to their liking, often combining multiple strategies can be a big challenge and requires steel discipline but the results will not waste their efforts...

These types of strategic combinations will be suitable for people with good multi-tasking ability (doing many things at the same time) who can cover each strategy in a separate area of ​​activity. and at the same time just adjusted risk management to finally perfect this combined strategy.

For example, the typical long-term Swing Trading requires to exit the market at the same level of resistance as the old high, while Trend Trader is still waiting for the price to retest and break those levels. The possible combination is to close half of the order at resistance, hold another half for the breakout.

Distinguish between Trend Trader and Swing Trader

Still, confused about the difference between Trend Trader and Swing Trader? See the distinguishing features below for a better understanding.

The 80-20 trading principle - The trend of the market forms 20% of the time and the remaining 80% is moving up and down within a certain trading range (i.e., price is sideways), price retraces, and Other Trend counter actions to test a certain price range. The volatility of the price increases as the price follows the Trend to attract Trend Traders and decreases in range to attract Swing Traders.

The big picture - Trend Traders keep an eye out for economic, political, and environmental issues that can affect order entry or risk management. Swing Traders, on the other hand, choose to more safely ignore these macro effects and focus on short-term price action.

Trading frequency - Swing Traders execute more orders but keep them in short timeframes while Trend Traders execute fewer orders but keep them on longer timeframes.

Position size - Swing Traders keep larger orders for short timeframes while Trend Traders keep smaller orders for longer timeframes. Swing Traders use to leverage more often than Trend Traders.

Position timing - Swing Traders have to wait and choose the perfect timing because on average Swing Trader's profit or loss will be smaller than Trend Traders who may miss the point of the catch. The beginning of the end of a trend can still make significant profits.

Entry strategy - Trend Traders enter orders when the momentum is strong, or wait for a counter-trend to reduce risk. Trader swings enter orders when the price fails to penetrate support or resistance and place the order in the opposite direction from the moving price (if the price is falling, then place buy/sell) and place a stop loss at the point where they think their strategy is wrong (for example, break support/resistance, stop loss)

Exit strategy - Swing Traders exit when the stop loss is triggered or a profit target is reached. Trend Traders keep the order until the trend changes, regardless of the time frame. They place stop losses at levels that signal a change in the trend.

Summary

Swing Trader and Trend Trader have strategies for trading in markets that require different skills. While professional traders are likely to successfully combine these two strategies, new and mid-tier traders should focus on one approach and stick with it until they fully master it.