How to start swing trading stocks today

Jitanchandra Solanki Aug 14, 2023 17 Min read

If you would like to learn how to start swing trading stocks then this is the article for you! By the end you will learn:

What swing trading stocks entails
Why the stock market is a popular asset class for swing trading
A swing trading stocks strategy using price action
A swing trading stocks strategy using technical trading indicators
How to open a demo trading account with Admirals to start trading stocks in a risk-free, virtual trading environment!

Swing trading stocks definition

Swing trading is a method in which traders buy and sell instruments, such as stocks, with the purpose of holding the position for several days and, in some cases, weeks. Most swing traders aim to follow the fundamental principle of buying a stock at a low price and then selling, or exiting, at a high price - pocketing the difference in between, as shown below:

An example candlestick chart of swing trading stocks.

In the above example, the price swung from lower to higher at the $100 price level. These type of swings in the market are the price levels that swing traders aim to identify. How do they find these price levels? Through a combination of technical and fundamental analysis that forms part of their overall stock trading strategy. This is discussed in more detail further down the article in the swing trading stocks strategy section.

Swing traders may also try to profit from a stock price that is falling by ' shorting' the stock. In this situation, a trader will attempt to sell at a high price and buy it back at a lower price - pocketing the difference in between. To do this, users will need to have access to the right broker with the right trading products such as the ability to trade CFDs (Contracts for Difference) which allows traders to go long (buy) and to go short (sell) on a given market. You can learn more about this product in the 'What is CFD trading?' article.

How to start swing trading stocks

To start swing trading stocks, traders will need to have the right broker, platform and stock trading strategy.

1. Use the best swing trading stocks broker!

With the right broker, you can buy and sell stocks in seconds. As your broker will hold your capital that you have to trade or invest with, it is important to choose a broker that is regulated to provide a high level of security and safety for your funds.

For example, investment firms operating under the Admirals trademark offer regulation from the UK Financial Conduct Authority, the Australian Securities and Investments Commission, the Estonian Financial Supervisory Authority and the Cyprus Securities and Exchange Commission.

It's also useful to have access to different stocks from around the world. Sometimes US stocks such as Apple and Facebook outperform European stocks such as HSBC or Shell. Traders with Admirals can access more than 3,000+ stock CFDs from 15 of the world's largest stock exchanges, ensuring you have a wide selection of stocks that meet your swing trading criteria.

Fortunately, with Admirals you can open a demo trading account to start swing trading stocks via CFDs in a risk-free, virtual trading environment! This means you can practice and sharpen your trading skills until you are ready to transfer to a live trading account. You can open your free demo account by clicking the banner below:

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2. Use the best swing trading stocks trading platform!

Your trading and charting platform will help you access important information you need to trade the stock market. This includes historical and real-time prices of different stocks, as well as different technical trading indicators to analyse them. With the MetaTrader suite of trading platforms, provided by Admirals, users can view current and historical prices of shares using stock charts, as well as trade directly from the platform - providing an all-in-one experience.

Admirals offers the following MetaTrader trading platforms:

MetaTrader 4
MetaTrader 5
MetaTrader WebTrader
MetaTrader Supreme Edition (A custom plugin for MetaTrader 4 and MetaTrader 5, created by Admirals and professional trading experts)

Through the above platforms, you can trade across stocks and shares from some of the largest stock exchanges in the world and other CFD markets such as indices, commodities, foreign exchange and more.

Once you've opened your live, or demo trading account, and downloaded your free MetaTrader trading platform provided by Admirals, you can view the different stocks available to swing trade using the following steps:

Open MetaTrader.
Open the Market Watch section from the View menu at the top or by pressing Ctrl+M on your keyboard. This will open up a list of market symbols on the left side of your chart.
Right-click on the Market Watch window and select Symbols or press Ctrl+U on your keyboard.
This will then open the window shown below which details all the markets available for you to trade on.

A screenshot of the MetaTrader 5 Symbols window.

Now you can left-click on one of the symbols you would like to view and drag it on to the chart to view the current and historical price of the symbol you've chosen. From here, you can also open up a trading ticket:

Right-click on the chart.
Select Trading.
Select New Order, or press F9 on your keyboard.
A trading ticket will open for you to input your entry price, stop loss and take profit levels and unit size (volume).

A screenshot of the MetaTrader 5 trading ticket window.

To download your FREE MetaTrader 5 trading platform, provided by Admirals, simply click on the banner below!

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3. Swing trading stocks strategies

Trading strategies are important as they help traders analyse different pieces of information to identify any clues on which direction a company's stock price could move next. There are many different ways to perform this analysis and they generally fall under two categories:

Fundamental Analysis. This is the study of company-specific information and data, as well as general economic and fundamental data. Company-specific data includes analysing earnings per share announcements, sales, profits, debt ratios, new product launches and so on. Traders are trying to identify if the company is likely to make more profit in the future as this could translate into a higher share price if the company becomes more valuable.

Technical Analysis. This is the study of price action to identify well-known patterns of buying and selling activity which could lead to swings in the market and possible entry and exit levels. The study of a share price generally comes down to using chart patterns, price action and technical trading indicators such as moving averages, MACD and many more.

To learn more about fundamental and technical analysis you can visit the Admirals Educational library area which is full of articles on these topics. Alternatively, if you would like to see live technical and fundamental analysis then why not register for the Admirals Trading Spotlight webinar? In these free, live sessions, taken three times a week, professional traders will show you a wide variety of technical and fundamental analysis trading techniques you can use to identify common chart patterns and trading opportunities in a variety of different markets.

To reserve your spot in these complimentary webinars, simply click on the banner below:

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Now let's have a look at some examples of swing trading stocks strategies.

Swing trading stocks using price action

Analysing price action is one of the most commonly used ways in analysing potential swing trading stocks to trade on. The term price action is simply the study of a security's price movement. Price action indicators are used extensively among traders to help identify turning points or swings in the market.

One of the most popular types of price action indicators is candlestick trading. Here's an example of a basic candlestick construction:

An example of a seller and buyer candle.

If the trader was viewing a weekly chart of a stock using candlesticks, then the opening price level would be where the stock opened at the beginning of the week, the closing price level would be where the stock closed at the end of the week. Candlesticks also show the high and low price levels made during the week. A seller candle is typically shown with a black or red body. A buyer candle is typically shown with a white, green or blue body.

Within candlestick trading, there are many different types of formations that traders will look for. These include shooting stars, hammers, harami and engulfing patterns among many others. Let's focus on the harami candlestick pattern for trading stocks.

Price action swing trading on stocks: The harami pattern

The harami price action pattern is a two candle pattern which represents indecision in the market and is primarily used for breakout trading. It can also be called an 'inside candle formation' as one candle forms inside the previous candle's high to low range. Here is an example of what a bearish and bullish harami candle formation looks like:

An example of a bearish and bullish harami candlestick pattern.

A bearish harami forms when a seller candle's high to low range develops within the high and low range of a previous buyer candle. As there has been no continuation to form a new high, the bearish harami represents indecision in the market which could lead to a breakout to the downside.
- Traders can also use a moving average indicator as a trend filter to only look for bearish harami patterns when below a long-term moving average which signals the stock is in a downtrend.

A bullish harami forms when a buyer candle's high to low range develops within the high and low range of a previous seller candle. As there has been no continuation to form a new low, the bullish harami represents indecision in the market which could lead to a breakout to the upside.
- Traders can also use a moving average indicator as a trend filter to only look for bullish harami patterns when above a long-term moving average which signals the stock is in an uptrend.

Let's have a look at an example using the stock price of U.S stock Disney ( DIS).

Swing trading stocks: Disney

An example price chart using Disney stock to show bullish harami candlestick formations on the MetaTrader 4 trading platform.

Disclaimer: Charts for financial instruments in this article are for illustrative purposes and does not constitute trading advice or a solicitation to buy or sell any financial instrument provided by Admirals (CFDs, ETFs, Shares). Past performance is not necessarily an indication of future performance.

In the above monthly price chart of Disney, the yellow boxes highlight examples of a bullish harami formation. In both instances, the market did indeed push higher for the next month but that may not always be the case. This is why risk management is important and why traders should always use a stop loss to help minimise risk and manage the overall loss on any losing trades.

The monthly chart may be too high a timeframe for many swing traders, with the daily and weekly chart more commonly used.

Let's have a look at an example of bearish harami patterns on the weekly chart of European stock Bayerische Motoren Werke ( BMW.

Swing trading stocks: BMW

An example price chart using BMW stock to show bearish harami candlestick formations on the MetaTrader 4 trading platform.

The yellow boxes above highlight instances where a bearish harami pattern has formed. In these instances the market did go down after, as the pattern suggests, however, some moves last a lot longer than others. Just as risk management is important to protect yourself if the stock goes in the opposite direction you are trading, trade management is essential in trying to hold on to any profits.

If you're feeling inspired to start trading, or this article has provided some extra insight to your existing trading knowledge so far, you may be pleased to know that Admirals provides the ability to trade with Forex and CFDs on up to 80+ currencies, with the latest market updates and technical analysis provided for FREE!

To open your trading account, simply click on the banner below:

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Swing trading stocks using indicators

Another popular tool for swing trading is a trading indicator. There are many different types of technical trading indicators covering trend indicators, momentum indicators, reversal indicators, volatility indicators and more.

Some of the more popular swing trading indicators include the Stochastic Oscillator and the Relative Strength Index (RSI). Both of these technical trading indicators help to identify overbought or oversold trading conditions where a stock price may turn or swing the other way. Most swing trading strategy charts will have three components:

Daily or weekly candlesticks. This means each candle represents one day or one week's worth of trading activity.
A trend filter. The most commonly used trend filter is the exponential moving average.
An overbought and oversold technical indicator. These include indicators such as the Stochastic Oscillator, Relative Strength Index, Williams Percent R, Momentum, Money Flow Index and more.

Let's have a look at an example of swing trading stocks using indicators on the Netflix (NFLX) price chart:

An example price chart using Netflix stock to show Stochastic Oscillator oversold conditions on the MetaTrader 4 trading platform.

In the above daily price chart of Netflix, the yellow boxes highlight areas where the Stochastic Oscillator is trading below the indicator's 30 horizontal level (grey line). When the indicator trades at this level the stock price is deemed as oversold. This means it could represent a possible buying opportunity using the old saying: buy low and sell high.

The purple wavy line is the 34 exponential moving average which is used as a trend filter. It's clear to see that when the Stochastic Oscillator has been oversold but the price is still above its 34 exponential moving average, the market did indeed push higher and continue in the trend. The type of opportunity a swing trader will look to act on.

Past performance is not indicative of future performance. However, these combinations of techniques serve as a platform to build on. Users can further refine the swing trading setup by adding in price action, other indicators and other forms of analysis such as fundamental analysis.

Swing trading stocks using Trading Central Insight™ indicator

Did you know that Admirals offers users the ability to download a Supreme Edition plugin to the MetaTrader platform which provides a wide range of advanced trading indicators? In this package which is free to download, users can also access the Trading Central Technical Insight™ indicator to help in identifying technical chart patterns on stocks that could be suitable for swing trading setups.

For example, once you've downloaded your free Supreme Edition plugin and accessed the Admiral Connect indicator, you can search for stocks and other markets to find the latest technical analysis trading setups from Trading Central, as the example shows below:

An example of the Trading Central Technical Insight™ indicator, available for free when downloading the free MetaTrader Supreme Edition plugin provided by Admirals .

As you can see in the window above, the indicator provides actionable technical events for short-term, intermediate-term and long-term setups using bullish and bearish events. You can learn more in the ' How to Trade with Trading Central' article.

Why start swing trading stocks with Admirals?

Trade with a well-established, regulated company which includes regulation from the UK's Financial Conduct Authority.
Benefit from a negative balance protection policy, to protect you from adverse movements in the market.
Access the fastest and most popular online stock market trading software called MetaTrader which you can use on PC, Mac, Web, Android and iOS operating systems and is provided for free by Admirals .
Open an Invest.MT5 investing account to buy the best shares and ETFs from 15 of the largest stock exchanges in the world.
Open an Admiral.Markets or Trade.MT5 trading account to trade via CFDs (Contracts for Difference) in order to go long and short a market to potentially profit from rising and falling markets.
Gain free access to the Trading Central indicator through the feature-rich MetaTrader Supreme Edition provided by Admirals.

Get started today by opening a free demo trading account so you can trade in a risk-free, virtual trading environment until you are ready to go live!