Upside Reversals based on daily data. Top 10 Stocks - the best of the best based on charts, financials and valuation. Set an entry for the trade somewhere near the lower end of the daily trading range, or wait for a one or two day pull back before entering. However, in flat or downtrending markets, we shift our focus more to trading ETFs because they can provide us with a low correlation to the direction of the broad market currency, commodity, fixed income, and international ETFs. Obviously, knowing when to sell is at least equally as important.
How to Swing Trade ETFs
The video is best viewed in full-screen HD mode click bottom right of video player window:. As technical momentum traders, we do not believe in the Wall Street mantra of "buy low and sell high. Stocks and ETFs in strong uptrends that have outperformed the market over a 6 to 12 month period have a high probability of continuing their bullish trends for the next few months.
As Sir Isaac Newton once proclaimed, "an object in motion stays in motion until a greater force acts against it. Similarly, stocks trading at or near their week highs have the least amount of overhead resistance to work through, and can therefore stay in uptrends longer than anyone expects.
Ideally, the best swing trading candidates will be trading at week highs and fresh all-time highs, as they have no overhead supply resistance to work through. One common and deadly mistake new swing traders make is "bargain hunting," which is going after stocks and ETFs that have fallen out of favor in the market and are usually trading at or near their week lows.
The faulty thought process is to "simply" buy the lows, wait a while, and sell higher. However, this is a flawed plan for traders because market trends frequently last much longer than anyone expects, and it is human nature is to underestimate how long a trend can last. Therefore, it makes no sense to buy a downtrending stock or sell short an uptrending stock. This enables us to achieve strong gains in healthy, uptrending markets, while seeking to avoid losses or profit from short selling and trading inverse ETFs in flat to downtrending markets.
In bullish, uptrending markets, our main focus is on trading small to mid-cap growth stocks because they have the best capability to outperform the gains of the broad market. However, in flat or downtrending markets, we shift our focus more to trading ETFs because they can provide us with a low correlation to the direction of the broad market currency, commodity, fixed income, and international ETFs.
Knowing the right time to buy stocks and ETFs is only one part of the equation to becoming a successful swing trader. Obviously, knowing when to sell is at least equally as important. Generally, the main goal of our exit strategy is to sell winning trades into strength when they have achieved a reward-risk ratio of at least 2 to 1. That means the trade has gained at least double our initial capital risk.
However, when the trade doesn't go as expected, we calmly exit into weakness because not all trade setups work and we always employ firm risk control. With each and every trade setup, having a protective stop is the last line of defense that cannot be argued with! Our exact, preset stop prices are provided with every ETF and stock pick entered in our Wagner Daily swing trading newsletter,.
Here are the top 5 "golden rules" we teach subscribers when it comes to money and risk management for trading:. Our subscribing members are a diverse group of market participants, including semi-retirees looking to preserve and build their wealth, part-time traders seeking to supplement the income of their day jobs, and even professional financial advisors looking for solid technical guidance. Because our swing trade service is fully designed as an "end-of-day" trading system, even part-time investors and traders with daytime jobs may completely follow our strategy and swing trade picks by simply setting their buy and sell stop orders with their online brokers before going to work.
Because our strategy for trading stocks and ETFs is based on technical analysis and price momentum, common techniques known to work all over the world, our stock trading strategy works equally well for any market in the world, providing members who subscribe to our trading system with unlimited opportunities for profiting in various global stock markets. Start my risk-free access now. We never share your personal data with third parties and promise not to spam you.
If you are serious about becoming a consistently profitable trader, you need a trading system that works. To learn how to trade stocks based our proven swing trading techniques with an year track record of success, sign up today for your day risk-free access to The Wagner Daily or dramatically shorten your learning curve with the best swing trading video course around.
Therefore, swing trading is mainly used by at-home and day traders. Large institutions trade in sizes too big to move in and out of stocks quickly. The individual trader is able to exploit such short-term stock movements without having to compete with the major traders. If you're interested in swing trading, you should be intimately familiar with technical analysis. Investopedia's Technical Analysis Course provides a comprehensive overview of the subject with over five hours of on-demand video, exercises, and interactive content cover both basic and advanced techniques.
Swing trading involves holding a position either long or short at least overnight and or up to several weeks. The goal is to capture a larger price move than is possible on an intra-day basis.
Swing trading assumes a larger price range and price move and therefore requires careful position sizing to minimize downside risk. Swing trading can involve a mix of fundamental and technical analysis. Swing trades usually rely on larger time frame charts including the minute, minute, daily and weekly charts. Swing trades tend to require more holding time to generate the anticipated price move.
The distinction between swing trading and day trading is the holding position time. Swing trading involves at least an overnight hold, whereas day trading closes out positions before the market close. Day trading positions are segmented to a single day only. Swing trading involves holding for several days to weeks.
By holding overnight, the swing trader incurs the unpredictability of overnight risk resulting in gaps up or down against the position. By undertaking the overnight risk, swing trades are usually done with a smaller position size compared to day trading, which utilizes larger position sizes usually involving leverage through day trading margin.
Swing trading on margin can be extra risky in the event a margin call triggers. A swing trader tends to look for multi-day chart patterns. Some of the more common patterns involve moving average crossovers, cup-and-handle patterns, head and shoulders patterns , flags, and triangles.