This Swing Trading Checklist Will Teach You How to Use Our Trade Room Effectively
Learning how to swing trade stocks is an art form that takes a lot of practice to learn. There are several different types of swing trading strategies and that's why it's important to take your time and learn what your niche is. Learning stock trading and how to swing trade will entail a lot of studying technical analysis as well as fundamental analysis.
The goal of all traders is to trade successfully and grow your wealth. As a result, it's important to know different trading strategies and how to trade them successfully. One such strategy is known as swing trading. Read More
Everyone is familiar with day trading. You buy and sell a stock or stocks within one trading day. However, swing trading is when you buy and hold a stock overnight up to a couple of weeks. Which means you want to find stocks with high level of profitability.
Since you're holding for longer, you get to pick stocks that have a lot of room to move. This also means you need to have a solid grasp of support and resistance as well as patterns and candlesticks.
Those technicals are super important to swing trading. In fact, they're incredibly important to trading in general. While there's no magic formula into what a stock will do, technicals sure do help in picking a direction.
How many times have you heard "the trend is your friend" in trading? It's especially true when learning how to swing trade stocks.
Having a strong trend in place makes it much easier to trade because you have to trade a direction. Swing trading means you're holding more than a day.
Hence the need to have a strong trend in place. Direction matters. How many times as traders have we made a trade only to have direction change on us.
It happens to everyone. It's also not fun. When the market is choppy and directionless, swing trading is much harder to do.
As a result, you have to determine if you're just going to hold overnight or go long term. If you're swing trading options, direction really matters and so does time. Watch us do trading live on our streams each day.
We've determined that trend matters in swing trading. What can we use to help find direction? Learning how to swing trade stocks requires some time we need to use the tools at our disposal.
Candlesticks sell a story. Each candle is formed off the emotion of traders all over the world. Emotion moves markets and stocks.
As a result, you can use those emotions to your advantage. Which means you need to know what candlesticks look like and mean.
If you see indecision candles, then you know that you probably want to stay out of that trade until a direction is chosen. When you see bullish candles, you can look at taking a bullish trade.
If bearish candles are the majority, you can take the bearish bias. Candlesticks were developed as a to track emotion coupled with a securities price. When you're holding for a period of time, like in swing trading, it's helpful to know how others are feeling about a stock.
Candlesticks by themselves tell a story. However, group them together and you get patterns. Patterns can confirm direction when learning how to swing trade stocks.
There are two types of patterns; continuation and reversal. It's really important to know what what the different pattern types look like. That's going to shape your trades.
If you go long on a bearish reversal pattern, you're going to either take a look or have to hold much longer than you intended. That can tie up funds; especially if you're starting out small.
If you see a cup and handle pattern, you can trade the break out and make a nice trade. Which is the goal of every trader. That doesn't mean you're going to win on every trade however.
Patterns form within patterns causing breakdowns. Hence the necessity of knowing the small candlestick patterns as well as candlesticks themselves. Learn how to swing trade stocks in our trading rooms.
Support and resistance can arguably be the most important part of learning how to swing trade stocks. The real bodies and wicks of candlesticks form these levels.
So do patterns and moving averages. Support and resistance are levels every trader worth their salt pays attention to.
As a result, you need to map out resistance if you're going long and support if you're going short. These levels tend to be profit taking targets.
As a result, if you're long, you may want to take profits right under resistance or right at it. Waiting to see if it's going to break can be risky.
If other traders decide to take their profits, you may end up losing yours. If you take profits and then it breaks, you can always get back in an ride it to the next resistance level.
Many times, we get a little greedy and want to hold for when it breaks resistance and shoots up. However, many times we end up losing some if not all of our profits.
In swing trading, support and resistance can and should be used as profit taking levels and buy signals. You can also find if there's enough profit potential for you to place the trade.
Using technical indicators for trading can give confirmation on direction when looking to swing trade stocks. Moving average crossovers are big buy and sell signals. If price is overextended from moving averages, it's going to move back toward them. They provide equilibrium to stocks. Moving averages also act as support and resistance.
As a result, you can use technical analysis to confirm the strength of your trade. You can use RSI as overbought and oversold confirmation as well as strong trend confirmation. Try our community our 14 days free to learn how to swing trade stocks in our swing trade room. Read More
Make sure to read this swing trading checklist in full before trading with real money.
Each technical tool is designed to help you place the best possible trade. That doesn't mean however, that you'll be 100% percent accurate. Even the best traders fail 30-40% of the time.
How to swing trade stocks? Swing trading means you're holding for a period of time. As a result, if your trading account is under $25,000 you're limited to 3-4 day trades a week.
Many times, swing trading is used as a way to bypass this rule. If you buy and hold overnight to sell for a profit the next day, you're not docked a day trade.
Again, we can't stress enough how much direction matters. If you hold overnight and something makes it change direction, you can end up with a losing trade.
Cut your losses quickly. Many times we're tempted to hold until the stock recovers. You can do that. However, sometimes just cutting the loss quickly ends up being the best play.
Swing trading has different strategies you can use to be profitable. As a result, we've developed our swing trading course for you to use. Take our course and learn the best way to swing trade and how you can use this trading method to grow your wealth. We also have a swing trade room included in our trading service. We hope that you found this swing trading checklist helpful.
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