Why Swing Trade

Trading is science or is it an art:

Let us be a bit practical and look at the trading scenario. There are two primary things about trading the capital markets.

1. The predictions by experts
2. The actual outcome.

The most important aspect of trading is obviously the actual outcome. However, we observe that the predictions to be the most followed stuff everywhere. An experts' advice is presumably, the most sought after thing in the internet. Despite the warning in fineprints to read the offer documents carefully we run after these prediction practitioners. Just sit back one day and think. Is it worth it. I mean are these experts really the experts we think they are. How can we measure their expertise. I would do it by simply calculating the number of accurate calls per 100 predictions. Just try the following experiment:

1. Pick an expert.
2. Take note of all his calls

Just go thru this simple experiment and you will be surprised by the outcome and immediately start questioning the expertise of the experts.

For all practical reasons, it is actually impossible to predict the market accurately over a period of time. The longer this period,  the more difficult it becomes. So when we invest money in the markets, my objective should be nothing other than the following:-

a. The price of the stock could go in any direction.
b. The probability of the price movement in my intended direction is very high.
c. If I make profit,  it will be big
d. If I loose, my loss will be small.
e. I will reverse my position if my first call fails.

It is the reversing of position that is called swing trading. This covers both sides of the price movement. So let's do it.