Swing trading systems capitalize on the oscillations experienced in the stock prices. In this style of trading, the returns on a stock can be gained in few days or within a week or two. Traders employing this style can leverage on the short term stock movements without fearing any stiff competition from the big players in the market. Swing trading systems are best suited for the at-home or part time traders. These traders do not have enough time for constantly monitoring the stock prices like the day traders. They can only afford to watch over the market progress once in a day or week. They have to rely on the services of broker firms, who notify them about the price changes using email alerts and newsletters.
Large trading firms or agencies cannot trade their stocks at a rapid pace, owing to the bulk size of the holdings. They therefore do not adopt swing trading systems as their mainstay. Instead they utilize the trading system occasionally to earn small amounts of profit. Day traders also shy away from this style of trading because of their tendency of not holding onto a stock for more than a day. They trade their stocks within minutes or hours. The part time traders and the newcomers in the market mostly prefer swing-trading systems. The low risks and quick returns form an attractive combination for these traders.
Swing trading systems are best employed in a stable market. Here, the stock prices show a general pattern of variation, most of which can be predicted. Often these small variations are ignored by the day trader and the long term investors. A swing trader on the other hand sees loads of opportunities. He/she trades on stocks having minor fluctuations. In case of a bullish or bearish market, the stock prices tend to move in a single direction- either up or down. They do not fluctuate. Swing trading systems therefore cannot be employed in such markets. In the stable market, the best bet for the swing trader is the blue-chip stocks. These are the stocks that are actively traded in most exchanges. Stocks of big companies normally show major variations, which translate into greater profits for the swing trader.