There are several different swing trade strategies that you can use if you're looking to learn swing trading. The video below will give you a high level overview of swing trading and teach you the right and wrong ways of how to swing trade.
In this swing trading strategies that work post you’re going to learn how to swing trade stocks using some simple swing trading methods, advanced techniques on how to find entries and exits, as well as find out the most effective swing trading indicators to use on your charting platform.
We’re going to give you the overall big picture with how to swing trade stocks. If you’re looking to go more in depth, then make sure that you take our free swing trading course.
Learning how to swing trade stocks takes time and is an art form in and of itself. It takes a lot of practice to learn and perfect. There are several different swing trading strategies to choose from, and you’re going to want to find the right strategy for you.
As always, the best way to learn how to swing trade stocks safely is to trade in your paper trading account, and treat the money as real money. If you can’t make money in the simulation, how can you expect to make real money?
Riding the 9 ema on a trending stock is one of the more popular swing trading strategies. When following this 9/20 ema strategy, it’s important to find stocks that are in an overall uptrend, with strong momentum, and then use the 9 ema to ride the stock up. Use the inverse strategy if you’re playing a stock that is bearish and wish to short it. (Ride the 9 EMA down)
Watch for a candlestick close above the 9 exponential moving average on the daily chart. Then buy on the first intraday candle that breaks the high of that previous daily candle using the base of that previous candle as a stop.
You could use a 1 minute or 5-minute chart time frame to find an entry. Ideally, you’d want to try and get your entry on the 1 minute to get your best fill, but some traders like to use the 5 min.
Once you get your entry you ideally want to see that 9 ema start to push upwards and separate from the 20 ema. The daily candlesticks also need to move up with your 9 ema. Sometimes the 9 ema will trade sideways before it starts pointing upwards. But, the 9 ema needs to push in an upwards direction for a potential continuation.
Always wait for confirmation. Realize, that buying closer to the 9 ema is less risky than buying further away from the 9 ema. We want to get the best entry possible!
A close below the 9 ema on the daily chart would be a potential sign of weakness and time to either take your profits or cut your losses. Also, be aware of your stop from the low of that previous candle to determine if you’re going to stay in the trade.
Many of times a stock will doji below the 9 and then will bounce causing a fake out. This will cause you to stop out prematurely. Just be aware and follow the technicals to determine your exit strategies.
Another popular swing trading strategy is to watch for a 9/20 ema crossover on a daily chart. Many of times a stocks moving average lines will be in a downtrend or tied up in a consolidation phase. What you’re watching for is the 9 ema to cross the 20 ema and a candlestick to close above the 9 ema on the daily chart.
Your entry would be the next candle to break the high of that previous candle on the daily chart using the 1 minute or 5 minute chart as your entry. When trading this 9/20 ema crossover strategy it’s very important to be aware of the other moving averages such as the 50 or 200 SMA. If they are above your position then they are potential resistance areas. Also, don’t forget to draw your diagonal trend lines to find support and resistance levels on your charts!
We’d recommend having the 50 simple moving average and 200 simple moving average lines on your daily charts. These are the most popular sma lines that traders pay attention to. Some traders also like to have the 100 sma as well.
Moving average lines play the role of showing key support and resistance areas. The more room that the stock has to run, the better.
If you get in on a 9/20 crossover then ideally, you’d like to have some room for the stock to run before it hits those overhead moving average lines. The closer the price gets to those moving average lines the more likely traders will look to take their profits.
If you’re looking for how to swing trade stocks and set up your swing trading indicators effectively then make sure to take our free swing trading course at the bottom of this post.
It’s extremely important to learn the art of how to draw support and resistance levels. Learning how to chart a stock and find critical support and resistance levels will be an important process when using swing trading strategies that work.
Check out our recommended stock market books post and purchase some books on candlestick charting and trading psychology if you need more help.
Options are also very popular swing trading strategies. Trading put and call options can save you a lot of capital when entering a potential swing trade. Options trading can be a complicated swing trading technique to learn, but the overall concept is the same.
Options trading strategies work the same way as we discussed above. Follow the technical analysis of the 9 ema. Look for trending stocks and ones with potential 9/20 ema crossovers.
Make sure to take our options trading course if you’d like to learn more about options.
It’s important to always make sure that you take your profits along the way. Never get too greedy. Remember, no one can predict what a stock is going to do.
All it takes is one trader somewhere in the world to change the direction of a stock. A big seller when everyone is buying or a big buyer when everyone is selling. Be patient, chart your stock and wait for your entry!!
There are always stocks with great entries out there to swing trade several times per week, so don’t get FOMO. Fear of Missing Out! This is why most traders fail.
They let their emotions get in the way of their trading. This is why it’s important to always define your potential entry and exit strategies before entering into any trade.
Always have at least a 2:1 profit/loss ratio to ensure that your potential gains outweigh your losses. Cut your losses quickly if a trade goes against you.
The best traders in the world fail on trades close to 40% of the time. However, they’ve become masters at cutting their losses quickly. They realize that the market and their trade could turn against them at any moment.
That’s why they predefined their risk management strategies. This allows them to separate their emotions when trading. This takes time to develop and practice.
Proper technical analysis techniques will be critical when determining whether to enter a swing trade.
The Ichimoku Cloud is a very popular indicator that traders use with swing trading strategies. It gives you a great overall big picture when looking for support and resistance areas. Dip buying is a very popular swing trading strategy that you should look into if you’re looking to learn how to find good swing trade entries that minimize your risk.
HOW TO BUY PUT OPTIONS – A BEGINNERS GUIDE TO PUT OPTIONS
HOW TO BUY CALL OPTIONS – BEGINNERS GUIDE TO CALL OPTIONS
SELL A PUT – WHAT DOES SELLING A PUT MEAN FOR OPTIONS TRADING?
BACKTESTING TRADING STRATEGIES
HOW TO MAKE MONEY IN THE STOCK MARKET FOR BEGINNERS
SELL A CALL – HOW DOES SELLING CALL OPTIONS BENEFIT YOU?
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