Swing trading is perfect for those who have a full-time job, and for those who don't want to watch every tick of their investments. It's a great balance between "buy and hold" investing and day trading. Successful swing trading often yields better returns over a year than "buy and hold", and your money will be liquid. Swing trading (for most) is much less stressful than day trading, and involves much less micromanaging. There is also no minimum capital requirement for swing trading, as the pattern day trader rule is of no concern because you're not buying and selling your positions in the same day. Here are 5 steps to achieve success in swing trading.
It is crucial that you educate yourself thoroughly before putting your hard earned money on the line. Being a trader is no different than any other profession. Doctors and lawyers spend years getting trained and educated before they make a single dollar. Most successful traders spent months studying the market before they put any money on the line. You need to have an understanding of technical and fundamental analysis of stocks in order to trade them. Check out this free webinar if you're looking for a place to get started. Once you have a understanding of the basics of stock trading, you can figure out what style of trading is best for you.
Create A Trading Plan
You have to figure out what style of investing suits you and your lifestyle the best. As mentioned above, swing trading is very popular because of its potential to capture big % returns over a short time frame with a relatively small time commitment (compared to day trading). Decide whether you will focus on a certain industry, pattern/s, or if you will be continuously updating your watchlist with new potential plays.
Find The Right Trading Community
Now that you have defined your plan, you want to find a community of traders with similar goals and style to yourself. There is no reason to try to learn trading as a profession by yourself. Joining a community will exponentially reduce your learning curve, as you can learn from veteran traders and their mistakes instead of making them all yourself. Unfortunately in the stock education space there are numerous services that will try to scam you by posting fake trading results. Be sure to thoroughly research any trading educational service you're thinking about giving your money to.
Practice in A Simulator and Journal Your Trades
Now that you have the knowledge foundation, it is time to start actually trading. There is no reason to be trading with capital until you have proven to be profitable on a simulator. In order to find your edge, you should journal all of your trades. You want to keep track of all the setups you're taking in the simulator. You should focus on the setups that you have the most success and that give the best risk versus reward. Once you're profitable on the simulator for a few weeks you will want to switch to live capital. You don’t want to stay on the simulator too long.
Start Trading Live with Small Size
Now that you have defined your trading edge and achieved success on a simulator, it is time to start trading with real money. Trading with real money is completely different from the simulator because there is so many emotions thrown into the equation. Many people who find success in the simulator do not see the same results with real capital. There is no reason to be trading with large positions sizes until you have achieved a few months of consistency with live capital. Starting out, you should be very selective with the setups, and only focus on your niche plays that you have the most success in. Once you find some success, you want to slowly build on your repertoire of setups and gradually increase your positions sizes over time. In trading you're your own boss, so you get to decide when you are worthy for a raise.
If you're interested in learning more about swing trading, the head of our swing trading program, Paul Singh, is doing a free webinar this Thursday, November 16th. He will be giving you actionable trends for swing trading for the last couple months of 2017 to substantially grow your trading account. Reserve your spot here!