Swing Trading Overview
Status: Scaffolded - Content pending Last Updated: 2025-12-11
What Is Swing Trading?
Swing trading captures multi-day price moves. You hold positions for days to weeks, riding intermediate trends rather than intraday noise.
Typical Trade Duration: 3-5 days to several weeks
Key Characteristics
| Aspect | Swing Trading Setting |
|---|---|
| Timeframe | 1-hour bars |
| Lookback | 60 days |
| Bars Shown to AI | 200 bars |
| RSI Window | 14 (standard) |
| EMAs | 9, 20 |
| SMAs | 50, 100, 200 |
| MACD | Yes |
Why these settings?
- 60 days of data = captures full swing cycles
- Hourly bars = filters intraday noise
- Longer SMAs = identify major trend and key levels
Stop Loss & Target Rules
| Element | Swing Trade Range |
|---|---|
| Stop Loss | Guardrail: typically $2.00 to $3.00 below entry (STOCKS). Stop should be anchored to major structure + volatility. |
| Target 1 | $4.00 to $6.00 above entry (exit 50%) |
| Target 2 | $8.00 to $10.00 above entry (exit remaining 50%) |
| Time Stop | 3-5 trading days |
If neither target nor stop is hit within time stop → Reassess and potentially exit.
When to Swing Trade
Good Conditions:
- Clear multi-day trend
- Stock at key support/resistance level
- Sector rotation favoring the stock
- Macro environment supports direction
Avoid Swing Trading:
- Earnings within holding period
- Major Fed meeting imminent
- Stock in tight range (no swing potential)
- Market extremely choppy
Asset Types for Swing Trading
| Asset | Swing Support | Notes |
|---|---|---|
| Equities | ✅ Full | Most common approach |
| Options | ✅ Full | 8-30 DTE contracts |
| Futures | ⚠️ Limited | Price action + volume + multi-day structure |
| Crypto | ✅ Full | Works well, same time stops |
Swing Trading Risks
- Overnight/Weekend Gaps — Price can gap through your stop
- News Events — Multi-day holds exposed to more news
- Opportunity Cost — Capital tied up for days
- Theta Decay — For options, time works against you