What Is Swing Trading?

Swing Trading is a trading style used to capture gains in a stock over a period of a few days or weeks.

Swing Traders take advantage of the price action due to:

Pros

Cons

Things to know

Learn about all the Swing Trading Vocabulary here.

Swing Trading Strategies

Setup 1: Stocks Making New Highs

Stocks making new 52-Week Highs are likely to keep going up.

The built-in scan Price: Near 52Week Highs helps you discover these stocks.

Setup 2: Gap Breakout on Heavy Volume

Stocks that breakout on heavy volume are strong candidates for swing trades. These breakouts may be due to:

The built-in scan Price: Gappers 4% and above today uncovers these stocks.

Setup 3: High Relative Strength of the Stock versus the Overall Market

Relative Strength Trading is our go-to setup. Track the Relative Strength versus the overall market or sector and trade only the strongest stocks.

The built-in scan Relative Strength: Buy strong stocks to find these stocks.

Setup 4: Pullback Setup in the Strong Trending Stocks

Stocks that have trended for a while tend to pull back and resume their trend.

Setup 5: Top Industries and Top Sectors

Monitoring sector and industry momentum uncovers leaders in the market.

Everyday, you can monitor the Market Vitals page to find the best performing sectors and industries.

How Do I Find the Best Stocks for Swing Trading?

The key to finding the best stocks to trade is to understand both the Price Action Metrics and the Key Stock Fundamental Metrics.

Price Action Metrics

Understanding the Price Action metrics is not about a deep dive into the technical indicators. It is about understanding the only thing that matters: price.

Below are the key price-related metrics that we monitor:

Fundamental Metrics

The company fundamentals need to be analyzed over multiple quarters to find strong stocks.

Growth Metrics

Profitability Metrics

You can use a combination of these metrics to filter the best stocks that match your trading ideas and style.

Trading Plan

A Trading Plan is an essential ingredient to trading success.

The components of a Trading plan are:

Methodology

The methodology is everything that goes into your process of finding stocks to trade.

Risk Management

"The key to long-term survival and prosperity has a lot to do with the money management techniques incorporated into the technical system." - Ed Seykota

Risk Management is the key to long-term survival in the swing trading game.

Define your Stop- Loss BEFORE you enter a trade. Every StockMine Rating comes with a Stop Loss recommendation.

Conclusion

Swing Trading is an excellent alternative to Day Trading stocks and builds your account slowly. Developing an edge is crucial for swing trading success!