Intermediate: Learn a Swing Trading Strategy
In this section, you will learn my complete swing trading strategy - from beginning to end! First, read this page to get an overview of how the strategy works:
What criteria do you use to buy a stock? I thought you would never ask! We buy stocks after a wave of selling has occurred. This makes sense right? If you buy a stock and then all of a sudden it starts to fall you will be trapped with a loss. Ouch! So, we wait for the stock to fall first. This is called "buying pull backs". And we buy these pull backs in the Traders Action Zone (TAZ for short).
Buying and selling stocks is a dangerous game unless you have a specific entry and exit strategy. On the following pages, I will tell you how to get into a stock with the least possible risk to your trading capital. Then, once you have bought a stock, you will need a way to get out and take your profits - the exit strategy.
Oh, yeah. You'll also learn how to use trailing stop loss orders - and why you may not want to use them at all!
- Learn the entry strategy.
- Learn the exit strategy.
- See how to use trailing stop loss orders.
- See why you may not want to use actual stop loss orders.
So by now you have learned how to buy stocks. But, when? When is it a good time to buy stocks?
When the market is soaring and everyone is talking about how great the stock market is doing? When a CNBC analyst tells you it is a good time to buy? No and absolutely not! You buy stocks when the market tells you to...
Many times you will hear traders talk about gaps (sometimes called "windows") on a stock chart. Check out the next page for a short primer on trading gaps.
How do you tell if a stock is strong or weak? You can compare the stock to the market itself:
Now comes the most important part of trading: managing your money. It's not the sexiest part of trading but it is the one thing that will keep you in the game long enough to get over the learning curve. And hopefully, by following these money management rules, you will avoid losing everything in your trading account (and maybe even make a little money!).
- Learn the basics of money management for stock traders.
- Here is a sneaky little money management trick.
That's about it for our swing trading strategy. What? Does is seem too complicated? Information overload? Hmmmm... Maybe a checklist would help?
You are now finished with the swing trading strategy section. When you are ready, head on over to the advanced articles section. Don't worry. It's not too complicated.