Why Use Swing Trading in Stock Investments? What Are the Benefits?

Swing trading often generates higher profits than long-term holding. By analyzing price fluctuations of active stocks, it’s evident that capturing 25%~50% of moves with 8-point or larger swings yields significantly greater returns than other methods. Historical data proves this:

Case Study: Chrysler Stock

• Nov 1925 (Low: $28.5) – Oct 1928 (High: $140.5): Total rise: 112 points. During this period, 12 swings of 8+ points occurred, totaling 291 points (only 1x 8-point and 1x 9-point swings; others ranged 11–77 points). The largest single swing was a 77-point rally without >8-point pullbacks—ideal for pyramiding.
  Capturing 50% of these swings would yield 145 points (vs. the 112-point total rise), with pyramiding further amplifying profits.

• Jun 1932 (Low: $5) – Dec 1935 (High: $93.875): Total rise: 88.875 points. 17 swings of 8+ points (only 2x 8-point) ranged 11–48 points, totaling 309 swing points.
  Capturing 50% would yield 154.5 points (vs. 88.875-point total rise).

From 1925–1935, Chrysler had 57 swings of 8+ points, totaling 1,076 points (average ~19 points per swing). Even a conservative 10-point profit per trade (without pyramiding) would accumulate substantial gains.

Conclusion: Swing trading outperforms long-term holding and dividends, potentially exceeding total dividend payouts.