Swing Trading in India: Complete Strategy Guide for Beginners

Ravi’s Discovery of Swing Trading

Ravi, a software engineer in Pune, tried intraday trading and lost ₹50,000 in two months. “It’s too stressful, and I can’t watch screens all day,” he told his friend.

His friend suggested swing trading—holding stocks for a few days to weeks, not minutes or hours.

Six months later, Ravi was averaging 3-5% returns per swing trade, with much less stress. He didn’t need to quit his job or stare at screens.

This guide will teach you his approach.

What is Swing Trading?

Swing trading captures price “swings” in stocks over days to weeks.

Trading Style Comparison

Why Swing Trading Works

1. Captures Market Rhythm: Markets naturally swing up and down
2. Time-Efficient: Analyze after market hours, execute at open
3. Lower Stress: No second-by-second decisions
4. Compounding: Multiple smaller profits add up

Swing Trading vs Intraday

Finding Swing Trade Opportunities

Step 1: Screen for Candidates

Use screeners to find stocks with:

Technical Criteria:

• Price above 50-day moving average (uptrend)
• Recent pullback of 3-10%
• Volume higher than average on pullback
• RSI between 40-60 (not overbought)

Fundamental Filters:

• Market cap > ₹5,000 crores (liquid)
• Positive quarterly results (recent)
• No major news pending

Step 2: Identify Setup

Look for these setups:

Pullback in Uptrend:

• Stock in clear uptrend
• Pulls back to support (moving average or previous high)
• Shows signs of bouncing

Breakout from Consolidation:

• Stock trading in range for days
• Breaks out with high volume
• Entry on confirmation

Reversal after Selloff:

• Stock falls significantly (without fundamental damage)
• Shows buying interest at lower levels
• Forms reversal candlestick pattern

Chart Patterns for Swing Trading

1. Bull Flag

What It Looks Like:

     /\
    /  \     
   /    \----\
  /           \----
 /                 
Rising pole + Consolidation flag

Trade Setup:

• Entry: Break above flag
• Stop Loss: Below flag low
• Target: Pole height projected above breakout

Example: Stock rises from ₹100 to ₹120 (₹20 pole), consolidates between ₹116-120 (flag), breakout target = ₹136 (₹120 + ₹20 × 80%).

2. Cup and Handle

What It Looks Like:

    /\      /
   /  \    /
  /    \  /
 /      \/
Cup formation with handle

Trade Setup:

• Entry: Break above handle high
• Stop Loss: Below handle low
• Target: Cup depth added to breakout

3. Double Bottom

What It Looks Like:

\        /\
 \      /  \
  \    /    \
   \  /      Bottom 2
    \/
   Bottom 1

Trade Setup:

• Entry: Break above neckline (middle high)
• Stop Loss: Below second bottom
• Target: Distance from bottom to neckline, projected upward

4. Ascending Triangle

What It Looks Like:

____________ Resistance
   /
  /
 /
/ Support trendline rising

Trade Setup:

• Entry: Break above resistance with volume
• Stop Loss: Below trendline
• Target: Triangle height projected above breakout

Technical Indicators for Swing Trading

Moving Averages

Swing Strategy:

• Buy when price pulls back to 20 EMA in uptrend
• Trend is up when 20 EMA > 50 SMA > 200 SMA

RSI (Relative Strength Index)

Swing Strategy: Buy when RSI crosses above 40 from below in uptrending stock.

MACD

Swing Strategy: Enter when MACD crosses above signal line while stock is at support.

Volume

Entry Strategies

Strategy 1: Pullback Buy

Conditions:

1. Stock in clear uptrend (higher highs, higher lows)
2. Price pulls back to support (20 EMA or previous breakout)
3. Forms bullish candle at support
4. Volume declining during pullback

Entry: Buy on bullish candle close Stop Loss: Below support level

Strategy 2: Breakout Buy

Conditions:

1. Stock consolidating near resistance
2. Volume declining during consolidation
3. Price breaks above resistance
4. Volume spikes on breakout (2x average)

Entry: Buy on breakout close or next day open Stop Loss: Below consolidation low

Strategy 3: Reversal Buy

Conditions:

1. Stock has significant selloff (10-20%)
2. No fundamental damage (results okay, no fraud)
3. Forms reversal pattern (hammer, bullish engulfing)
4. Volume increases on reversal candle

Entry: Buy above reversal candle high Stop Loss: Below reversal candle low

Exit Strategies

Taking Profits

Method 1: Fixed Target

• Calculate based on pattern (breakout target)
• Example: 7% profit target

Method 2: Trailing Stop

• Move stop loss up as price increases
• Trail by 2-3% below recent high
• Exit when stop hit

Method 3: Technical Target

• Exit at next resistance level
• Exit when RSI reaches 70+
• Exit when candle closes below 20 EMA

Stop Loss Placement

Risk-Reward Ratio

Always aim for minimum 1:2 risk-reward.

Example:

• Entry: ₹100
• Stop Loss: ₹96 (₹4 risk)
• Target: ₹108+ (₹8+ reward)

Position Sizing

How Much to Risk Per Trade

Conservative: 1% of capital Moderate: 2% of capital Aggressive: 3% of capital

Calculation

Formula:

Position Size = (Capital × Risk%) / (Entry - Stop Loss)

Example:

• Capital: ₹5,00,000
• Risk: 1% = ₹5,000
• Entry: ₹200
• Stop Loss: ₹190 (₹10 risk per share)
• Position Size: ₹5,000 / ₹10 = 500 shares
• Total Position: 500 × ₹200 = ₹1,00,000

Maximum Positions

Swing Trading Routine

Daily (15-30 minutes)

Morning (Pre-Market):

• Check overnight global markets
• Review positions for any news
• Note any stocks at entry levels

Evening (Post-Market):

• Review day’s price action
• Update stop losses
• Scan for new setups
• Make tomorrow’s watchlist

Weekly (1-2 hours)

Weekend Analysis:

• Review all closed trades
• Analyze what worked, what didn’t
• Update strategy notes
• Prepare sector watchlist
• Review Nifty/Bank Nifty trend

Finding Swing Trade Candidates

Stock Screeners

Chartink (chartink.com) - Free

• Custom technical screeners
• Pre-built swing trading screens
• Saves time in scanning

TradingView (tradingview.com)

• Advanced charting
• Global comparison
• Screener available

Broker Screeners

• Zerodha Streak
• Angel One screeners
• Upstox Pro screeners

Useful Screener Filters

Pullback Scanner:

Close > 50 DMA
Close < 20 DMA
RSI < 50
Volume > Average Volume

Breakout Scanner:

Close > Yesterday High
Volume > 2 × Average Volume
Close > 52 Week High × 0.95
RSI > 50

Sample Swing Trades

Trade 1: Pullback Buy (Successful)

Stock: Tata Motors Setup: Uptrend, pulled back to 20 EMA Entry: ₹950 (bullish candle at 20 EMA) Stop Loss: ₹920 (below swing low) Target: ₹1,020 (next resistance)

Result:

• Hit target in 8 days
• Profit: ₹70/share (7.4%)
• Position: 50 shares
• Total Profit: ₹3,500

Trade 2: Breakout Buy (Successful)

Stock: HDFC Bank Setup: Consolidation breakout Entry: ₹1,680 (breakout with volume) Stop Loss: ₹1,620 (below consolidation) Target: ₹1,780 (measured move)

Result:

• Hit target in 12 days
• Profit: ₹100/share (6%)
• Position: 30 shares
• Total Profit: ₹3,000

Trade 3: Failed Trade (Stop Loss Hit)

Stock: Tech Mahindra Setup: Pullback to support Entry: ₹1,450 Stop Loss: ₹1,400 Target: ₹1,550

Result:

• Broader market crashed
• Stop loss hit in 3 days
• Loss: ₹50/share (3.4%)
• Position: 35 shares
• Total Loss: ₹1,750

Key: Even with loss, capital preserved for next opportunity.

Common Mistakes to Avoid

Mistake 1: Ignoring the Trend

Wrong: Buying pullback in downtrend Right: Buy pullbacks only in uptrends

Mistake 2: No Stop Loss

Wrong: “It will recover, I’ll hold” Right: Fixed stop loss, no exceptions

Mistake 3: Overtrading

Wrong: 20 positions, can’t monitor Right: 5-7 quality setups at a time

Mistake 4: Trading Without Plan

Wrong: Buy because “it looks good” Right: Written entry, exit, stop loss before buying

Mistake 5: Moving Stop Loss Down

Wrong: Stock falls, move stop lower to “give it room” Right: Never move stop loss in direction of loss

Mistake 6: Revenge Trading

Wrong: Lost money, immediately take another trade to recover Right: Take a break after loss, analyze what went wrong

Swing Trading Checklist

Before Entry

• Is the overall market trend favorable?
• Is the stock in an uptrend (for long)?
• Is the setup clear (pullback/breakout/reversal)?
• Is volume supporting the move?
• Is stop loss defined?
• Is target defined?
• Is position size correct (max 2% risk)?
• Risk-reward minimum 1:2?

After Entry

• Stop loss order placed?
• Trade logged in journal?
• Alert set for target?

Before Exit

• Is exit based on plan (not emotion)?
• Update trading journal with result

Taxation

Short-Term Capital Gains (STCG)

• Holding period: Less than 12 months
• Tax rate: 15% flat
• Swing trades always STCG

Example Calculation

• Profits for year: ₹1,00,000
• STCG Tax: ₹15,000
• Net Profit: ₹85,000

Record Keeping

Maintain:

• Entry/exit dates
• Prices
• Quantities
• Brokerage paid
• Contract notes

Building Your Swing Trading System

Step 1: Choose Your Style

Trend Following: Trade with the trend, pullback entries Breakout Trading: Trade range expansions Reversal Trading: Catch trend changes (higher risk)

Step 2: Define Rules

Write down:

• What makes a valid setup?
• Where exactly do you enter?
• Where exactly is stop loss?
• Where exactly is target?
• How much do you risk?

Step 3: Backtest

• Look at historical charts
• Apply your rules
• Would you have been profitable?
• Refine rules if needed

Step 4: Paper Trade

• Practice with virtual money for 1 month
• Follow rules strictly
• Track results

Step 5: Trade Small

• Start with 1/4 of intended position size
• Build confidence with real money
• Scale up after consistent profits

Resources for Improvement

Books

1. “How to Make Money in Stocks” - William O’Neil
2. “Trading in the Zone” - Mark Douglas
3. “Technical Analysis of the Financial Markets” - John Murphy

Indian Resources

1. Zerodha Varsity (zerodha.com/varsity) - Free
2. YouTube: Trading Chanakya, Nitin Bhatia
3. Chartink for scanning

Action Plan

Week 1: Learn

• Understand chart patterns
• Learn to identify trends
• Practice on historical charts

Week 2-3: Scan and Watchlist

• Use screeners to find candidates
• Create watchlists
• Paper trade setups

Week 4-8: Small Trades

• Start with ₹50,000-1,00,000
• Take 2-3 trades
• Focus on process, not profit
• Review every trade

Month 3+: Scale Up

• If consistently profitable, increase size
• If losing, go back to paper trading
• Continue learning and refining

Risk Disclaimer

Swing trading involves significant risk and is not suitable for everyone. You can lose your entire capital. Past performance doesn’t guarantee future results. Only trade with money you can afford to lose. Consider consulting a SEBI-registered advisor.

Summary

Swing trading offers a balanced approach:

1. Time-Efficient: 1-2 hours/day
2. Strategy-Based: Clear rules for entry/exit
3. Manageable Risk: Position sizing and stop losses
4. Compounding Opportunity: Multiple trades per month

Master the basics, define your rules, and trade small until consistent. Swing trading can be a sustainable way to grow wealth while managing risk.

Social Media Posts

LinkedIn: “Intraday trading failure rate: 90%+. Swing trading success rate: Much higher for disciplined traders. Why? Because swing trading gives you time to think, plan, and execute without second-by-second stress. Trade smarter, not harder. #SwingTrading #StockMarket”

Twitter/X: “Swing trading checklist: ✅ Stock in uptrend ✅ Pulled back to support ✅ Stop loss defined ✅ Risk-reward > 1:2 ✅ Position sized correctly

Skip even one = skip the trade. #SwingTrading #TradingTips”

Instagram: “How I swing trade 📈

1. Find stock in uptrend 📊
2. Wait for pullback to support 🎯
3. Enter when it bounces 🟢
4. Set stop loss immediately 🛡️
5. Exit at target or trailing stop 💰

Simple system, consistent results. Save this! 🔖 #SwingTrading #StockMarketIndia”