Swing Trading: Strategy Guide for Beginners 2024
This video is created with the sole purpose of turning you into a profitable stock trader. You will be a swing trader, not a day trader. You will hold your positions for a few days or weeks to exploit short- to medium-term price movements and I will give you all the technical abilities to exit the market with a handsome amount of money every trade.
#swingtrading #tradingstrategy #stockmarket
This is not financial advice. This is an open discussion for educational purposes only. Do your own research before making an investment decision.
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Artwork: Canva
Voiceover: ElevenLabs
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Transcripts:
We will learn only one trading strategy. We will apply that strategy only to a handful of carefully selected mid-cap or large-cap stocks. To find suitable entry and exit points, we will rely on some indicators. We will make a watchlist of stocks that are excellent for this strategy. And, finally, we expect no less than 5X returns from our trades.
If you are new to trading and swing trading, this information will help. Swing trades last from days to weeks. Traders use higher time frames to enter their chosen market. The market structure becomes clearer when you use a higher time frame. Small corrections do not crowd before you, pushing you to act impatiently. With swing trades, you act when you need to, not before that. This also means that you will face relatively higher stop loss. Don’t worry, the stop loss will be directly connected to your profit target. According to my experience and that of those engaged in swing trading, swing trading brings you more money than day trading. You may be an exceptional day trader, but that is an exceptional case.
How to choose the right stocks for swing trading
We will choose only stocks with over 2 billion dollars in market cap for swing trading. There will be plenty of them, but we will choose only the least volatile. The float of a stock is a contributing factor to volatility. While we choose low-float stocks for day trading, we don’t like low-float stocks for swing trading. Low-float stocks may hit our stop loss before we have become profitable, thus taking us out of the market.
When I say low-float stocks, I mean stocks with under 20 million shares available for trading. Floats do not indicate outstanding stocks. They are two different numbers. You can find out the float and market cap of a stock by going to the Statistics button of stock on Yahoo Finance.
Another element of the modern-day market environment that contributes to volatility is speculation. We want to trade stocks that go up because of their underlying solidity as a company and not because of speculation by some self-serving individuals or groups. Speculation can shake a company’s foundation and financial future. We don’t want to be a part of that uncertainty.
We want stocks that move in clear trends. They move in a smooth direction even when they decline in value. Since they are big and stand on solid ground, speculators generally avoid them, letting the market decide their stock price.
The stocks we choose for swing trading also trade in high volume every trading session. Having liquidity in the market helps when you want to enter or exit the market. Your orders must be filled to take a position or to take you out of your position. You will buy stocks via limit orders, not market orders. You need lots of shares trading in the market if you want your limit orders to be filled quickly.
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