Top 5 Best Indicators for Swing Trading

Swing trading is one of the most common ways of trading these days. Swing trading doesn’t require a trader to watch the live market daily. But still gives good results if done correctly. This makes it attractive for working professionals who lack time to watch the market daily. However, Swing trading does involve a lot of risks. And can be very difficult for people who need more knowledge. This is why in this blog, we are going to go through the five best indicators for Swing trading.

What is swing Trading?

Swing trading is a type of trading style that attempts to make money on price swings. While there is no fixed duration for a Swing trade. It is generally a short-term trade. A Swing trade can be as short as 2 weeks to as long as 8 months. Swing trading can be a wonderful option for those familiar with technical analysis and who wish to invest in the market without constantly reviewing charts.

Here are Some of the Best Indicators for Swing Trading

Moving averages

simple moving average

One of the most popular indicators for swing trading is the moving average. Moving averages smooth out price data and make it easier to spot trends. There are different moving averages, but the most common is the simple moving average (SMA) and the exponential moving average (EMA). The SMA is calculated by taking sum of all prices over a certain period and dividing it by the number of prices in that period. The EMA is similar but gives more weight to recent prices.

Moving averages can be used to identify trend direction and support and resistance levels. When the price is above the moving average, it indicates an uptrend. When the price is below the moving average, it means a downtrend. If you’re starting out, it’s recommended to use a longer-term moving average like the 200-day SMA. Then, as you become more comfortable with swing trading, you can experiment with shorter-term moving averages like the 50-day or 20-day SMA.

Bollinger Bands

Bollinger bands for swings

Bollinger Bands are one of the most popular indicators used by swing traders. They were developed by John Bollinger in the 1980s and have since become a widely used tool for analyzing stock prices. Bollinger Bands are comprised of an upper and a lower band. These bands are typically set 2 standard deviations above and below the 20-day moving average, although other configurations are possible. The distance between the two bands varies according to market volatility; when markets are more volatile, the bands will be farther apart, and when markets are less volatile, the bands will be closer together.

The primary use of Bollinger Bands is to help identify overbought and oversold conditions in the market. When prices are trading near the upper band, it is considered overbought, and when prices are trading near the lower band, it is considered to be oversold. Swing traders will often look for price reversals at these levels. Another everyday use of Bollinger Bands is to help spot trends in the market. When prices are trending up, they will often stay between the two bands; however, when prices start to trend down, they will often break below the lower band. This can be used as a signal to enter into short positions.

Finally, Bollinger Bands can also be used to set stop-loss levels. By placing a stop below the lower band (in an uptrend)

Fibonacci Retracements

Identify swings with Fibonacci retracement

Fibonacci Retracements are one of the best indicators for swing trading. They are easy to identify and can be used to take advantage of up and down trends. Fibonacci Retracements are based on the Fibonacci sequence, a series of numbers where each number is the sum of the previous two. The most important Fibonacci ratios for traders are 23.6%, 38.2%, and 61.8%.

These ratios can be used to identify potential support and resistance levels in the market. For example, suppose the market is in an uptrend and retraces to 23.6% of the previous move. In that case, this could be seen as a potential support level. Similarly, suppose the market is in a downtrend and retraces to 38.2% of the previous move. In that case, this could be seen as a potential resistance level. The Fibonacci Retracement tool can be found on most trading platforms and is easy to use. Select the high and low points of the move you want to measure. Then, the Fibonacci Retracement tool will calculate the appropriate levels for you.

When swing trading, it is essential to look for reversal patterns at these critical Fibonacci levels. For uptrends, look for bearish reversal patterns such as head and shoulders or inverted hammers. For downtrends, look for bullish reversal patterns, such as bullish engulfing candles or morning stars.


Volume Indicator for swings

When it comes to swing trading, one of the most important factors to consider is volume. Volume is a measure of how many shares or contracts are traded in a given period, and it can be a helpful indicator for identifying potential trading opportunities. There are a few different ways to measure volume, but the most common is simply the number of shares traded in a given day. This is sometimes referred to as “daily average volume.” You can also look at volume over a longer period of time, such as weekly or monthly averages.

Volume can be a helpful indicator because it can show you whether there is interest in a particular stock or security. If there is a high volume, it may indicate significant buying or selling activity taking place, which could lead to an opportunity for profits. Conversely, the low volume may mean that there is little interest in a stock or security, and it might not be worth swing trading.

Of course, volume is one of many factors you should consider when swing trading. Of course, looking at other indicators like price action and momentum before making any trades is essential. But if you’re starting swing trading, paying attention to volume can be an excellent way to find potential opportunities.


VWAP Indicator for swings

VWAP stands for the volume-weighted average price and is a famous indicator swing traders use. It’s used to measure the average price of a security over a given period, using volume data to weigh the prices. This makes it a useful tool for identifying potential support and resistance levels. To calculate vwap, you first need to know the volume-weighted average price for each period. This is simply the sum of all prices divided by the total volume traded. You then plot this average as a line on your chart.

The vwap indicator can be used in conjunction with other technical indicators to help confirm trading signals. For example, if VWAP is rising while the price is falling, this could indicate bullish buying pressure. Conversely, if VWAP is falling while the price is rising, this could be indicative of bearish selling pressure. One thing to keep in mind with VWAP is that it’s a lagging indicator, so it will only confirm after the price has already moved. You’ll need to use other technical indicators or price action analysis to generate trade signals.


All in all, the best indicators for swing trading are those that provide you with the most information about what is happening in the market without being too complex or difficult to understand. The five indicators listed above are all great options to consider incorporating into your existing trading strategy. So do some experimenting and see which ones work best for you. And as always, be sure to monitor your results so that you can continue to refine and improve your approach.


  • Tricia Scone is a Trading and Investing Enthusiast and has trained thousands of people in various complex courses of finance. She has a unique way of providing Complex Financial knowledge in simpler words. which is why she is regarded as one of the most popular finance coaches in the world.

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