Capture profitability from swings in asset prices
Swing trading is a rule-based trading strategy that aims to capture the profitability from short-term trends. A typical holding period for swing trading is two to five trading days, and rarely exceeds two weeks.
As a rule-based trading strategy, swing trading can be implemented using an algorithmic trading approach by using technical or fundamental indicators to generate trading signal and trading orders.
Swing traders use a variety of techniques to identify trading opportunities, such as:
- Technical chart (e.g., Bollinger band chart, candlestick chart, and point-and-figure chart)
- Hypothesis testing, machine learning, and pattern recognition
- Analysis of financial time series to generate trading signals
- Technical indicators (e.g., MACD, RSI, Williams %R, stochastic)
For more on tools for swing trading, see MATLAB®, Datafeed Toolbox™, and Financial Toolbox™.
Examples and How To
- Technical Indicators - Financial Toolbox Functions
- Cointegration Testing - Econometrics Toolbox Functions
- Point-and Figure Chart - Financial Toolbox Functions
- Bollinger Band Chart - Financial Toolbox Functions
- Candlestick Chart - Financial Toolbox Functions
See also: algorithmic trading, automated trading, statistical arbitrage