Getting the swing of it

QWhat’s swing trading? — F.W., Morganton, North Carolina

AIt’s a form of shortterm investing, in which investors buy stocks and hold them for just one or more days or weeks. Swing trading is a lot like day trading, but day traders are typically in and out of a security within a single day — sometimes holding for just a few minutes. Just as day traders do, swing traders employ “technical analysis,” studying stock-price movements and looking for seemingly promising patterns. Unlike most day traders, they may also employ some fundamental analysis — such as evaluating a company’s business strength, profit margins, growth rates, debt levels, valuation and so on — though many will not.

The Securities and Exchange Commission has warned that “Day trading is extremely risky and can result in substantial financial losses in a very short period of time”; go to Sec.gov and search for “Day Trading: Your Dollars at Risk” to read its report.

Swing trading is slower-paced and not quite as risky. But a more dependable road to riches for most people is simply buying into healthy and growing companies and holding on for years, or just sticking with low-fee index funds.

QWhere can I read about the world’s best investors? — P.B., Appleton, Wisconsin

ATry “Value Investing: From Graham to Buffett and Beyond” by Bruce Greenwald, Judd Kahn, Paul Sonkin and Michael van Biema (Wiley, $22); “The Value Investors: Lessons From the World’s Top Fund Managers” by Ronald Chan (Wiley, $38); and “The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies” by John Reese and Jack M. Forehand (Wiley, $30). They’ll introduce you to legends such as Warren Buffett, Benjamin Graham, Peter Lynch, Seth Klarman and Philip Fisher.