Stock markets represent dynamic business environments. There are seldom idle times in stocks, but the market does not perform equally at all times. This situation gives rise to the concept of stock swings. A swing represents a period of heightened market activity. Smart investors are able to understand stock market swings, and use them to their advantage. Here, we share a number of ways in which you can take advantage of such swings.

Pre-Market Overview

Stock swings for a working day can only be calculated with accuracy, if you work them out before the market opens. As an investor, you need to look at three things to take advantage of a possible swing. You should first look at the general market sentiment. This will mean that you need to check the market position (bullish or bearish) and observe current economic condition. You should also look for the news about your current stock holdings, to work out a swing state.

Using Volatility

A volatile market is a good market for swing traders. You can also make money by following swings in quieter markets, but this gain is usually small, due to the stable market conditions. A swing trader needs to quickly perform trading, when the market experiences volatility due to any reason. Volatility can often be triggered by international situation or through local news affecting particular companies.

Use Trending Stocks

One of the most important ways to take advantage of stock swings is to invest in stocks, which are already moving according to the overall market trend. You need to check the direction of the swing, and observe the rate of change. If you are able to invest at the right time, when the rate is moving forward, you will be able to increase your investment in a short period of time.

You can identify the trending stocks by using the available technical information. The daily and weekly charts are quite productive in this regard, and you can obtain them from a number of resources, such as market analysts. You need to buy or sell the stocks that are just experiencing acceleration during the swing.

Investing in Breakouts

As a swing trader, you need to identify the normal range for the companies that you want to trade in. This will allow you to quickly identify, if certain stocks break out from their normal range. Stock prices often set up new boundaries, when they breakout. This offers you an excellent opportunity for investing, and quickly gaining a profit as the stock prices reach a new stabilizing value.

Partial Selling

Being a swing trader, you need to cover your risk well. This means that you should only sell part of your investment, when there is an opportunity during a particular market swing. The remaining part should be according to the amount of risk that you are willing to take. You can then sell the remaining shares, if the market goes higher to make greater profits.


However, you can only perform all these activities through professional help. At Swing Alpha, we are always willing to offer you a number of tools to help you perform well during stock swings.

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