The Key to Success as a Swing Trader

Many novice day traders use a very simple strategy. They try to find which stock is on the rise to buy a position. Once they are there, they hope and pray that it continues to rise until they can earn a profit. That’s usually not a winning strategy, but there’s a reason why many people start out this way. You think that you don’t need to know how to read different indicators in the market or even monitor the news cycle around a particular stock. In a sense, you don’t care why the price is going up, just that it continues to do so.  

As mentioned, this strategy can be poor at best in day trading. Using the same approach to swing trading is worse than being in a casino. One of the main benefits of swing trading is that you’re ideally going into a position with enough information that can back your predictions. At times, it’s even best to purchase a stock while its value is not yet on the rise. Yet, since you analyzed the market indicators and monitored the news cycle, you’re making an educated guess that the price will move in the direction that you hope it will.  

What are the keys then to success as a swing trader? Making a good analysis of the stock price pre-purchase is one of the main things that will allow you to be successful. Another thing that you have to keep in mind is the external factors that could come into play. A perfect example is when a company is going to show quarterly reports publicly. There’s usually some buzz around these days before it happens. When people feel that the numbers are going to be positive, the stock price tends to go up.

Understanding Your Exit Points   

One of the things that worries people about swing trading is the fact that you’ll leave the stock unattended for periods of time. It’s not like day trading, where if you have a position open, you’re likely glued to the screen. In swing trading, you may even hold a position over the weekend, for example. Any time that the market closes, there’s a chance that the conditions will completely change by the time it opens back up.        

That’s why it’s key to set up a few exit points beforehand. Maybe you’re just not comfortable holding the position over the weekend, for example. If that’s the case, then there’s no shame in making Friday your deadline. Could you leave money on the table if you do this? Yes, that’s always going to be a possibility, but it’s okay if you’re not willing to take the risk. Keep in mind that swing trading is not as hands-on as day trading. 

Therefore, you have to learn to “let go” a bit more. That can be an ironic thing to say, particularly since swing traders who make a good analysis feel more in control of the situation. In a sense, that’s the point of swing trading. Your faith is in your analysis and not your ability to read market indicators at 1 or 5-minute intervals.   

Learning How to Read the Market Is One of the Main Benefits of Swing Trading   

Is swing trading something you should be doing, even if you’re regularly a day trader or just someone who invests long-term? One of the main benefits of swing trading is that it forces you to learn how to interpret different indicators. Another element that’s super important is interpreting the news cycle. As mentioned, day traders sometimes outright ignore this. It could be one of the main reasons why they’re blindsided when a stock seemingly dips out of the blue. 

Swing trading could be something that you look into as a part of a learning experience. The reality is that the more you know about the market, the better your predictions will become. That’s true about learning different forms of trading. It can also be true when you decide to experiment with stocks that you don’t usually trade. This form of trading can be a great testing ground for day traders. That’s one of the benefits of swing trading that goes beyond making a profit. 

It’s certainly hard to justify to traders that they need to invest in something that may not turn a profit right away. If you want to learn the ins and outs of this type of trading, be sure to sign up for our 60-day boot camp. Here, you’ll find more benefits of swing trading and ways to develop strategies that can help you read the market and ultimately turn a profit!     

The post Why You Need to be Swing Trading – Benefits of Swing Trading appeared first on Bulls on Wall Street.

SPY broadening formation.   Intra-day video highlights stocks.  New additions DGLY and JRJC.  Holding SPXU and GWPH.

Video Analysis (3 minutes):

Today’s intra-day video about 50 minutes prior to close with  trading ideas in focus list stocks.

Key SPY Pivot Levels: Round number $200, Old high 199,  50 dam 197.01, 197.50 and $196.50 gap fill and support levels

Under the Hood and Trading Game Plan:

We’ve talked much about the SPY formation over the past two weeks, and now we are starting to see a range forming at these new highs forming a “broadening formation” at the highs.  Broadening formations feature higher highs and higher lows within a range.  Near a top they are bearish, near bottoms they are bullish.  Many failed breakouts come out of this pattern.  Another sign of a correction or pullback?  We shall see.

The current game plan is to manage the SPY short position.  I continue to look for long setups on momo stocks, but will not chase. B

Current Trades

I am still holding SPY short via SPXU and GWPH.

GWPH broke down below the moving averages, and is forming a range here.  My stop has been moved below this range, in anticipation of remount of the moving averages.  If looking to enter, a remount would give a good entry signal.

The Trade Results Journal/Spreadsheet is up to date.

The Focus List

Finviz link to easily follow the entire focus list.  Most positions entry charts remain as annotated earlier in the week.

Focus list stock SCTY bounced today and can be entered on slight weakness above remounted candle (see video).  MNST, AAPL, PANW, LDRH and BITA remain within trading ranges.

New Addition:

China is heating up again and JRJC bounced on oversold conditions after a pullback.  Entry in the $8.25-9.25 range, with a stop under 8 and target around $12 offers good reward to risk.

DGLY is very volatile right now and only good for those that can watch closely.  Two ways to play this:

1) Entry at current level with stop under breakout bar.  Using tighter stop gives low risk, high reward with a target in the $30-32 range.

2) Wait for deeper pullback on gapfill.

Short Setups:

My focus now is shorting SPY via SPXU

Market Leaders

Market leaders were a mixed bag today, which is expected when SPY closes at basically break even.  GOOGL, FB, NFLX, TSLA look healthy and ripe for entries on pullback.

Please read the post 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Anayze Your Swing Trade Results  It is important to know these rules if you trade off the Report.

New subscribers and trial members please leave me any feedback/comments in the comments, via email (singhjd1@aol.com) or twitter (twitter.com/PaulJSingh).

The post Market Speculator Part-Time | Swing Trade Report appeared first on Bulls on Wall Street.

SPY mixed signals.  IWM cup and handle setup. The Weekend video goes over 12 great stocks not on the focus list.  AAPL, AIRM, PANW, MNST, SCTY, LDRH and BITA start the week’s focus list.

Video Analysis (5 minutes):

The Weekend Video goes over some stocks ready to make big moves that are not on the focus list below that are worth watching.

Key SPY Pivot Levels: Round number $200, Old high 199,  50 dam 197.01, 197.50 and $196.50 gap fill and support levels

Under the Hood and Trading Game Plan:

Over the past three days SPY has given us mixed signals.  While Wednesday and Thursday gave us two of the worst closes since August 7th, Friday printed a strong close on an uptick in volume.  I will continue to manage my short position, but have no bias for my individual stock trades.  I will likely continue to trade with smaller position size until there is more clarity.

IWM is forming a big cup and handle formation.  An entry on pullback to $115, with a stop at $113.50 and target at the highs at $120 gives us a 2.5/1 reward to risk.

Nothing is clear and easy of late.  Here, the pattern is excellent, but we have to deal with the fact that IWM is lagging, not making highs while SPY and QQQ have.  I pay attention to these issues, but focus more on the fact that I am getting good reward to risk.

The current game plan is to manage the SPY short position.  I continue to look for long setups on momo stocks, but will not chase. B

Current Trades

I am still holding SPY short via SPXU and GWPH.

GWPH broke down below the moving averages, and is forming a range here.  My stop has been moved below this range, in anticipation of remount of the moving averages.  If looking to enter, a remount would give a good entry signal.

The Trade Results Journal/Spreadsheet is up to date.

The Focus List

Finviz link to easily follow the entire focus list.  Most positions entry charts remain as annotated earlier in the week.

I am reprinting the MNST/TWTR comparison from the Thursday evening Report because it is one of my favorite setups and somewhat rare (the post breakout rounded pullback).  MNST entry on weakness with target at $95.

I have talked about the MNST setup being similar to TWTR’s “rounded” pullback post breakout.  Notice just how closely it is following what TWTR did.  It pulled back into a rounded formation, started it’s move up, then consolidated a little before moving up again.  MNST is at that level of consolidating before the next move up.  I am looking for some weakness at $86-88, stop at $84 and target at $95.

SCTY remounted the 50 dma.  Friday held the breakout candle but swayed below before closing above the moving average.  Entry here with stop below Thursday low around $68.  Target $77 gives 3:1 reward to risk.

AAPL broke down hard from highs, taking out the key $100 level.  A pullback to the 50 dma would likely create extreme oversold stochastic levels.  Entry in the $96.50-97 range would offer a low risk entry in expectation of bounce.

PANW nice breakout pullback setup. Entry in the $85-86 range, target $92 and stop at $83.50.

AIRM is still trading within the post breakout range.  Enter at bottom with target at top.

BITA pullback to $85-86.  Target at $95 and stop at $80-82.

LDRH is in a bottoming formation and looks ready to break a 6 month range high.

Short Setups:

My focus now is shorting SPY via SPXU

Market Leaders

Most market leaders are acting in tune with the market and look ready to pullback.  PNLN has broke down and close to being removed from the list.

Please read the post 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Anayze Your Swing Trade Results  It is important to know these rules if you trade off the Report.

New subscribers and trial members please leave me any feedback/comments in the comments, via email (singhjd1@aol.com) or twitter (twitter.com/PaulJSingh).

The post Market Speculator Part-Time | Swing Trade Report appeared first on Bulls on Wall Street.

SPY closes at low of day for first time since August 7.  Momo stocks poor closes.  Z entry.

Video Analysis (4 minutes):

In the morning analysis we talked about watching for a close near the lows of the day and inverted hammers holding in momentum stocks like TSLA, BIDU, BITA and NFLX.  That is exactly how we ended up closing.

Key SPY Pivot Levels: Round number $200, Old high 199,  50 dam 196.79, 197.50 gap fill and support level

Under the Hood and Trading Game Plan:

Today was the first day since August 7 that SPY closed near the lows of the day. That by itself is not of huge significance, but the fact that many momentum stocks closed near lows or with inverted hammers raised the probability of a pullback.

The current game plan is to manage the SPY short position.  I continue to look for long setups on momo stocks, but will not chase. Biotech continues to be the sector of interest. Oil/gas is also picking up.

Current Trades

I am still holding SPY short via SPXU.  I entered Z today on a pullback toward the moving average and am holding GWPH.

Note: I have taken *half size positions* in most positions lately because I find them speculative, but with good reward to risk, and have noted that in alerts.  I am not concerned with win rate and work at keeping losses small.  If you want high probability positions *do not* enter when I take a half position or label something speculative.  

This is how I trade, looking for limited account risk, high reward to risk ratios, small losses and big gains.  If you keep losses small during slumps, you will be successful in the long run.  Think big picture.  

The Trade Results Journal/Spreadsheet is up to date.

The Focus List

Finviz link to easily follow the entire focus list.

Let’s take a look at the failed breakout in BIDU to illustrate what happened to many momo stocks today.  The stock gapped up while already at overbought levels and closed back within the trading range.  While it was up for the day, it is no longer a breakout.

This type of move should start a pullback to a good entry level.

NFLX is another good example.  Remember the fact that they closed up slightly is not what is important–it is that they closed off the highs and back within trading ranges.

INSY has pulled back to support and offers good reward to risk.  Entry around $33.50 with stop at $32 and target at $37 gives 2.5:1 reward to risk.

PNRA is a breakout-pullback setup.  Entry in the $148.75-149.50 range, with stop around $147 and target at $154 offers 2+:1 reward to risk.

BITA requires pullback to the $84-85 range, but is volatile enough to do that in a day or two and still be a good setup.

Short Setups:

My focus now is shorting SPY via SPXU

Market Leaders

Every market leader closed off highs and most were near lows of the day.  A few were flat out ugly failed breakouts–NFLX, FB, TSLA.  Let’s see if we get some good pullback entries.

Please read the post 23 Laws of the Part Time Swing Trading the Market Speculator Way and How to Anayze Your Swing Trade Results  It is important to know these rules if you trade off the Report.

New subscribers and trial members please leave me any feedback/comments in the comments, via email (singhjd1@aol.com) or twitter (twitter.com/PaulJSingh).

The post Market Speculator Part-Time | Swing Trade Report appeared first on Bulls on Wall Street.