Swing Trading
Definition
A trading style that holds positions for days to weeks, aiming to capture short-term price swings.
Detailed Explanation
Swing trading is a style that captures gains in a stock over a period of 2-14 days (sometimes weeks). Unlike day trading, positions are held overnight. Unlike investing, the focus is on short-term technical patterns rather than long-term fundamentals. Swing traders use technical analysis to find stocks with short-term momentum potential, entering at support or breakouts and exiting at resistance or targets.
Example
You identify a bull flag pattern on META. You buy the breakout, hold for 5 days as it rallies 8%, then sell at your target resistance level.