Swing trading consists of holding a position for anywhere from several days to several weeks. A concrete method which enables the trader to usually capture anywhere from 3 points and up involves the reading of the volume tape which is one of the most important calculations when determining entry into a stock.
It is always best to pick a stock with good fundamentals and watch how it moves. The stocks with five point interval scales on the side of the price scale on the chart make outstanding candidates when looking for entry. These are usually the strongest technically as well because the market makers don't try to gun the stop orders as much as with a lower priced stock. It should also follow a line on support as well.
When a good stock is chosen measure the bottom from the sideways action to the peak of a previous swing high to get an idea of the points you can capture and stay on the low end of your estimate. It is always better to secure a solid gain than to try and sell at the peak. You will also get a better fill on the way up when the institutions are driving the price up. Now study the sideways action and how the previous volume looked before the last peak developed. You will see a pattern when the institutional buying dried up and only small investors were trading. This is what I call the dead zone and is your prime opportunity for entry.
Make sure to enter a stop order after entering your position, at most 10% of your entry price, and use a trailing stop if desired.
After entering a position sell as soon as your target price is reached and it usually happens fast when the institutions start buying. A position will normally be held from as little as two days to a maximum of a month. Good luck and happy trading.
It is always best to pick a stock with good fundamentals and watch how it moves. The stocks with five point interval scales on the side of the price scale on the chart make outstanding candidates when looking for entry. These are usually the strongest technically as well because the market makers don't try to gun the stop orders as much as with a lower priced stock. It should also follow a line on support as well.
When a good stock is chosen measure the bottom from the sideways action to the peak of a previous swing high to get an idea of the points you can capture and stay on the low end of your estimate. It is always better to secure a solid gain than to try and sell at the peak. You will also get a better fill on the way up when the institutions are driving the price up. Now study the sideways action and how the previous volume looked before the last peak developed. You will see a pattern when the institutional buying dried up and only small investors were trading. This is what I call the dead zone and is your prime opportunity for entry.
Make sure to enter a stop order after entering your position, at most 10% of your entry price, and use a trailing stop if desired.
After entering a position sell as soon as your target price is reached and it usually happens fast when the institutions start buying. A position will normally be held from as little as two days to a maximum of a month. Good luck and happy trading.
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