Swing trading is anticipating the market's next move, and asking what is the most probable outcome. For example, if a market broke support and had a sharp move down, the strongest trade to make would be to sell the first rally. This is because the most probable event would be for the market to at least make a retest of the new low before it could, with any high degree of probabilitybe expected to reverse direction again.
The main goal of each trade is to minimize risk rather than maximize profit. Positions are managed according to the market's behavior after we've made our trade. We can't really predict the outcome. For example, if we are trading on a test, we don't know if it will lead to a true reversal or just a consolidation pattern before further continuation of the preceding move. We are trying to achieve a "headstart" in the right direction together with a chance to put in a tight stop.
Trend following gives a trade room to breathe and allows for drawdowns. Swing trading depends on NOT riding out reactions or giving up profits already won. Trades should be exited either in the direction of price movement or just as the price reverses. Trailing stops will lock in any profits gained.
Trading should take advantage of extremes in price action, high volume, and liquidity.
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