Swing trading is one of the most popular types of trading in the markets, but there is a lot to learn so make sure to check out the best swing trading books.
Intro to swing trading
If you are new to stock trading, you will be looking to learn about various trading approaches to find what suits you best.
In this article, we have compiled a list of the best swing trading books that not only offer a unique perspective on the topic, but also provide necessary fundamentals that might make all the difference between success and failure.
What is swing trading?
Swing trading is a method of trading that attempts to capture gains from a particular stock or index within a short period of time, usually one to four days or a couple of weeks.
In this style of trading, traders actively seek out troughs and peaks in the price of a particular stock. They then use that information to create predictions regarding future price movements that they can use to make a profit.
Swing traders leverage a trove of current activity and past data to determine the best course of action.
However, there is no assurance that historical data will be reflected in future trading.
Benefits of swing trading
- Self-employment: As a swing trader, you don’t need to follow the commands of other people or work under a boss. You can simply use the available information to perform the stock investment that you feel has the best chance of success.
- Great returns: Swing trading benefits can produce amazing returns, especially if have the discipline to follow an investment model and good decision-making skills. There will be days where your investments will yield great profits.
- You don’t need a formal education to be successful: Anyone can learn the basics of swing trading, if they devote the necessary resources and time. Swing traders can therefore easily learn investing in a few weeks, without having to go through academic courses that often take several months or years to complete.
- Swing traders don’t have to be glued to the screens 24/7: Another advantage of swing trading is that you enjoy the luxury of being able to let positions ride while you hold down your full-time job. With stop-loss orders being set in place to avoid huge losses, there is literally no need to stick onto your trading screens.
Drawbacks of swing trading
As with every pro, there is a con. Swing traders aim to take advantage of short-term price changes in the market, but this does come with some risks.
- Exposure to weekend and overnight risk: The market can move significantly in one direction or another overnight while you are sleeping or during weekends when the market is not open. If the moves are against your trades, it can be a rude shock when you check your positions the following day. Even placing stop-loss orders doesn’t always shield you from that.
- Higher margin requirement: In swing trading, a higher margin requirement is one of the things which can put people off. If you’re keeping positions open for many days, then margin requirement will be high since stock prices don’t always move according to your will. You’ll also be paying interest on any margin positions held overnight.
Read on to see our list of the best swing trading books that can dramatically increase your knowledge on the topic.
Top 3 swing trading books
Come Into My Trading Room by Dr. Alexander Elder
First published in 2002, this 320-page book has since become a classic in the world of stock trading all thanks to the release of multiple updates and revisions.
One of the things that sets Come Into My Trading Room apart is that it provides readers with a comprehensive introduction to the essentials of productive swing trading. In addition, it lays out important psychological tactics for disciplined trading to help swing traders.
Dr. Elder also provides step-by-step instructions to help swing traders create a profitable portfolio, trade stocks, futures, and options, and manage their money.
Mastering the Trade by John Carter
This is a great swing trading book for both beginner and experienced swing traders. Coming in at 481 pages, Mastering the Trade is primarily authored to assist swing traders survive in a marketplace that has been drastically transformed by technology.
The book takes a deep-dive into the psychological aspect of trading, which is important since poor trading psychology will often separate you from your wallet. John Carter does everything possible to break down different markets and numerous strategies.
It is worth noting that Carter is the son of a Morgan Stanley shareholder. He has been around the stock market throughout his life and has never looked back.
Swing Trading by William Riley
Swing Trading by William Riley teaches readers techniques and principles that they can use to become swing traders. After reading this book, you can begin implementing the strategies and principles in your journey toward becoming a master swing trader.
Inside the book, you will learn technical analysis, swing trading price charts, the Japanese candlestick price chart, swing trading psychology, and technical indicators. With the help of Riley’s expertise, this book is sure to help readers become familiar with the strategies they need to become successful swing traders.
Swing trading is one of the most exciting ways that market players can use to earn weekly or monthly profits.
However, one needs to be opportunistic to be a successful swing trader. That means you need to enter the market just in time to take advantage of short-term price moves.
But this is easier said than done because market behavior tends to change each day. One of the best steps you can take to be in the know and start your new endeavor is to harness the wisdom of expert swing traders.
And for that, we would recommend reading the aforementioned books on swing trading.