Range and Swing Trading Methods

Range trading is seen as the opposite of trend following in some ways. Range trading looks at a stock's value over a specified amount of time - a range. According to range trading, every time a stock hits a high, it will fall back to a low, and vice versa, creating a price range. Traders utilizing this strategy will buy a security at the low price in the range, and, if their calculations are correct and the price rises, will sell it at a high price in the range.

Pros of Range Trading

An accessible, easy to follow strategy for a beginner.
Focuses on technical analysis, ignoring other outlets of information that could cloud and distract day trader.

Cons of Range Trading

Could require more capital for trading.
Reliance on the security to stay within its range.

Swing Trading

Swing trading is a style of trading where a trader will hold onto a security for a few days to a few weeks. Although it is not considered day trading, it is a trading style that some day traders might consider, depending on what their current situation calls for, and also what their analysis dictates.

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