These 23 rules are essential to understanding how to swing trade stocks using the methodology in the Part Time | Swing Trade Report. �Read the rules, memorize them and apply them.1. �Always have a plan going into the trade. �Know your entry level, stop and target.2. �Keep losses small and wins big. �We embrace small losses. �A small loss or big gain means you are doing it right. �Winning traders do not have small wins and big losses.3. �Your reward to risk ratio, determined by your target and stop, should be no less than 2:14. �Know the simple formula to calculate reward to risk ratio: �(Target-Entry)/(Entry-Stop)5. �When deciding on position size, focus on the amount risked rather than the percentage of your account. �The amount risked is the potential loss (Entry price-Stop price)*shares. �The amount risked should not be more than 2 percent of your account, preferably .5-1 percent.6. �Your target and stops should be determined by support and resistance levels, along with your risk ratio.7. �Stick with your target and stop once in a trade. �Do not micro-manage your positions. �Set it and forget it.8. �Set hard stops if you can�t watch the stock during the day.9. �We are traders, not stock pickers. �Focus on risk and trade management, along with the setup.10. �Pay attention to the overall market when trading individual stocks. �This will help you determine the overall bias of your portfolio.11. �Keep it simple. �Use no more than 2 indicators on a chart. �Indicators only reflect what we see in price and volume.12. �Bullish stocks should have a good volume pattern showing accumulation. �This means volume on up days should outpace volume on down days. �Bearish stocks should have a negative volume pattern showing distribution. �This means volume on down days should outpace volume on up days.13. �The four keys to a setup are price pattern, volume pattern, support levels and resistance levels.14. �Use RSI to look for divergences at major pivot points and highs/lows. �Use stochastic as an overbought/oversold indicator.15. �Moving averages provide strong support and resistance, and help identify trends16. �Small account holders, don�t worry about how �expensive� a stock is or how many shares you can buy. �A volatile $300 stock that moves 10 percent is better than a �$3 stock that moves 5 percent, regardless of your position size. �Focus on percentage gains, not point gains.17. �Many factors go into my making a trade. �If �I don�t trade a focus list stock that hits it�s buy point , that does not mean it�s not a valid setup. �It could be that I am over invested, have too many longs in a bearish market, or just taking a nap. �Ultimately you are responsible for your trades. �Do not rely on me.18. �Breakout pullbacks should be orderly with small price moves on the pullback and on low volume.19. �When I call something a �speculative trade�, it is just that, a toss up �gamble�. �Trade it smart with good risk management, but know that anything can happen. �If you can�t handle it, don�t trade it.20. �Have your focus list ready to start the trading day. �Write down your entry,stop and target levels. �A great free tool to keep a small watchlist is Finviz.21. �Every pattern is a breakout/breakdown, bottoming/topping or countertrend �reversion to the mean� setup. �It doesn�t matter if it�s called a flag, pennant, rubberband or W bottom. Know the underlying action, not the terminology.22. �Understand that these patterns we trade are based human nature, fear and greed. �We track and follow the big money. �Never lose sight of what these patterns represent.23. �Keep a trade journal and study your trades at least once every quarter.
23 Laws of Part Time Trading | Swing Trading The Market Speculator Way
Paul
Singh
•
February 4, 2021
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