Top Swing Trading Strategies For 2025: Expert Tactics For Consistent Gains

Bollinger Bands can be adjusted to your preference, so you can change the moving average from a 30-day to a 90-day, for example. Yahoo Finance has some very useful graphs for securities where you can add multiple indicators including Bollinger Bands. These can be useful in revealing oversold and overbought conditions, as an asset’s price will normally rebound in the opposite direction, respectively. So, as each individual trader is likely to find swing trading methods useful for different reasons, it can help to give yourself an overview of each type.

That said, swing traders commonly gravitate toward stocks, indices, commodities, and exchange-traded funds (ETFs), thanks to their liquidity and predictable patterns. Swing trading offers a flexible way to stay active in the markets without being glued to your screen all day. Whether you’re trading breakouts, pullbacks, or pre-catalyst moves, the key is to find a strategy that fits your risk tolerance, schedule, and mindset. This strategy works well on daily charts where price compresses over several sessions. Traders typically wait for a breakout candle on strong volume, then use indicators like MACD or RSI to confirm the direction.

On the other hand, an RSI value falling below 30 often indicates an oversold condition, suggesting a likely price increase. This indicator provides investors with actionable insights for timely trade entries and exits. These price levels can be historical, going back years, or as recently formed as the last few hours. Interestingly, it’s completely possible that current price action could respect such levels from years in the past – there is no expiry date on levels of support or resistance. Traders may look to open positions soon after these crosses happen, since moving averages are somewhat lagging as the data used is slightly old.

• Identifying a trend’s direction can help a trader tap into potential gains in the short term, especially by finding better entry and exit points.
• This means, closing the trade if it reaches the 1% mark in terms of loss.
• By layering sentiment analysis onto this classic chart pattern strategy, you filter for breakouts with a higher likelihood of sustained momentum, turning a good setup into a great one.
• True mastery comes from selective application and deep understanding.

While a squeeze signals that a big move is coming, it doesn’t predict the direction. This is where combining it with sentiment analysis adds a powerful edge. When the price of an asset prints a new high but the RSI fails to do so and instead makes a lower high, it creates a bearish divergence. This suggests that buying pressure is fading best swing trading strategies despite the new price high.

Volume Price Trend (VPT) Strategy

Remember earlier when we looked at the MACD as an indicator, and how there is the signal line and the MACD line? The above image is another example of spotting when a security might be oversold or overbought. We can clearly see the change in the price’s direction after it scrapes against the upper and lower lines.

Fading Trading Strategy

Through trial and error, you can discover what indicators and strategies resonate with you and employ those. Maybe using Bollinger Bands just makes sense to you and using MACD crossover doesn’t as much. Sometimes counter-trends are a little bit above the curve of trends.

• For a deeper dive into technical indicators, check out our guide on the 8 best swing trading indicators you should know.
• Swing traders using this approach look for clean, well-defined price ranges.
• This is another simple swing trading strategy that uses a 10-day moving average to catch pullbacks in the trend.
• If you decide to go short on this long term trend, you are making things very hard for you.

Best Day Trading Stocks – US Watchlist (Weekly Update)

His work appears regularly on Yahoo Finance, Seeking Alpha, and other trusted platforms. These patterns are often read in the context of strategies such as the Fibonacci Retracement, and Trend Catching Strategy. To devise solid trading plans, patterns, indicators (technical analysis tools) and strategies are overlaid.

profitable backtest examples of a breakout swing trading strategy

Swing traders using this setup often rely on the TTM Squeeze indicator, which combines Bollinger Bands and Keltner Channels. When the Bollinger Bands move inside the Keltner Channels, it signals a “squeeze” or volatility contraction. Once the bands break back outside, the squeeze is considered “released,” and traders look for directional momentum to enter the trade. You can also keep it simple and just apply Bollinger Band squeezes, along with volume confirmation, to spot bullish breakouts and bearish breakdowns. Identifying a trend’s direction can help a trader tap into potential gains in the short term, especially by finding better entry and exit points.

Swing traders look for an opportunity, adjust their sights, assess the direction of the wind, and take the shot. Swing trading works well for those that have frequent working hours, families, and personal interests, but still want to get their hands dirty trading. So many of us have other responsibilities taking up our time, so spending most of the day trading and researching just isn’t feasible. This is a major pro with swing trading because you still get in on the short to mid-term action, but you’re really only executing a few trades a week.

When the faster moving average crosses above the slower moving average, it generates a bullish signal, suggesting that momentum is shifting upwards. Conversely, when the faster MA crosses below the slower MA, it signals a potential downtrend, providing an exit signal or an opportunity to enter a short position. This strategy works best in trending markets, especially when news or broader sentiment gives the move a strong push. Swing traders using momentum setups often combine technical patterns (like flags or consolidation breakouts) with confirmation from volume or relative strength. Traders look for assets that are trending with strength—often confirmed by price breaking out of a key level, rising volume, or momentum indicators like RSI or MACD showing sustained strength.

Swing Trading Indicators

There is a 2% rule that says one should never put more than 2% of account equity at risk. On the other hand, there is a 1% rule that says the loss on a single trade should not exceed more than 1% of your total capital. This means, closing the trade if it reaches the 1% mark in terms of loss.

This divergence often signals that the underlying momentum of a trend is weakening, providing an early warning of a potential reversal. Learn to trade moving averages, support/resistance, and sentiment data to boost your returns. The Volume Price Trend (VPT) strategy is a powerful momentum-based approach that combines both price action and volume to measure the strength of a trend.

While compensation arrangements may affect the order, position or placement of product information, it doesn’t influence our assessment of those products. While compensation arrangements may affect the order, position or placement of product information, it doesn’t influence our assessment of those products. Price makes new highs while RSI makes lower highs (bearish divergence). Futures trading indicators often provide additional confirmation through futures market positioning. 20 EMA crosses above 50 EMA with price closing above both averages. The Best trading indicators don’t need to be complex to be effective.