Simply stated, a swing low is the time at which you are selling your shares of stock or shares of a mutual fund to an investor. A lot of people tend to put a lot of faith or confidence in their trades being a “good move,” in their own words, when it comes to their money, money for the future and for themselves. This is because most market strategists, traders, and traders are not in control of everything going around them. The market has an innate drive in it. The stock market will be moving to the upside from its current level and then will swing down to the upside. You can see this happening every day.
Why are those stocks not in a strong swing low position?
For one thing, there is nothing wrong with making a nice profit on the current stock’s current trajectory. The reason some investors, including me, avoid any trade to buy or sell at the current price is that we want to find out what the stock is really worth (even if we have to put our money where our mouth is). The more we know, the better the move.
Also, it is never as simple as “you know it when you see it,” as traders can’t predict all that well. Trading is a process that involves both sides of the trade, and both parties must be looking at the same data that they are being shown. For example, a good trader will look at both sides of the trade, including the current price of the stock and the time to make a move.
Also, we are more than human, and as traders we learn quickly because we are humans and not machines. We tend to fall into a routine even when we know what we are looking for.
To be clear, I don’t think a swing low is a necessity. I think any trader with an inclination for buying or selling should be looking for good news or bad news, just like a regular trader, especially if it is to close out their position. I also don’t think most investors really realize the importance of the swing low, because they do not analyze it. They know it sounds cool, doesn’t it? They think they make a great move.
Also, in some trades, you may not want to make a big move, because there are a lot of reasons for a trader to put their money in the stock. For example, you may be interested in learning about the stock but it may be on the downside and it may take some time to recover.
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