One of the most important decisions a swing trader faces, like any trader, is at what point they enter the market. The answer to this will depend on which trader you talk to. While swing trading is definitely one of the most popular and widely used trading styles around, it is not an exact system and as such has no hard rules for entry and exit conditions. It is more of a style or way of trading and each trader will have their own criteria for why they enter trades and then close them out. The trigger to enter a trade could be anything from price action to a signal generated by a trading indicator. However, one thing that you should keep in mind while swing trading is the presence of value. Value is possibly much more important than anything else when it comes to trading. If you understand what value is, then you will begin to understand why bank and other professional traders manage to outperform the majority of private traders regardless of the market they may trade.
So just what is value? Value here refers to the price you paid to buy the stock, currency pair or whatever instrument you may be trading. This is so important because the price you pay ultimately determines how big or small your win or loss will be. You can begin to see the importance of this when you look at a chart. Traders who buy into the market just before price retraces suffer a huge loss. They bought just near the top and as such their loss is heavier because they paid almost top dollar. Compare this to someone who bought much earlier at a lower price. Even if they suffered a loss, their loss will usually be smaller because the price they paid was lower than someone who entered near the top at a much higher price. If another trader entered the market at an even lower price, where value was much stronger, then the probability that they closed their trade out in profit is much higher than the previously mentioned traders. Value can mean the difference between a winning or losing trade.
It is this basic concept that bank and professional swing traders follow on a daily basis. If you have ever had the opportunity to examine a bank trader s charts, then what you will find is that they rarely rely on indicators or many of the other trading tools that many private traders utilize. This isn t to say that these tools serve no purpose or offer no value, but what it means is that they should not be considered the only trading tool. Instead you should look to utilize whatever trading system or tools you may currently use in conjunction with value. Adding value to your current trading system may offer you the opportunity to greatly increase your current profits and may even mean the difference between a winner and a loser. Take some time and see you are able to re evaluate any trade with the concept of value in mind. Is there any chance that you aren t entering the market where value is present? Doing this may end up being a not only a valuable learning experience but could also turn out to be very profitable.
![[Valid RSS feed]](http://www.newworldproducts.org/Articles/images/icon_Rss.png "XML Feed For RSS"){kind=icon}
Category Rss Feed
Print This Article
Add To Favorites