Swing Trading
Definition
Swing trading involves holding positions for multiple days to weeks, capturing larger price moves. Some prop firms restrict or prohibit overnight and weekend holding, which limits swing trading strategies.
Swing trading can be highly effective for prop firm challenges because it targets larger moves with wider stops, potentially achieving better risk-reward ratios. However, many prop firms have restrictions on holding positions overnight or over weekends due to gap risk.
Firms like Topstep and Apex require positions to be closed before the daily cutoff. FTMO and FundedNext generally allow overnight holding but may have weekend holding restrictions during the evaluation. These restrictions vary between evaluation and funded phases.
If your strategy is swing-based, carefully check the firm's rules before purchasing an evaluation. Holding restrictions can fundamentally invalidate a swing trading approach. For firms that allow overnight holding, be aware that weekend gaps can cause significant drawdown. PropJournal alerts you to positions that need to be closed before deadlines and warns about potential gap risk.
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