Trading Overreactions to Bad News
As swing traders we’ve all had to deal with the dreaded analyst downgrade. It’s the most frustrating aspect of trading.
What usually happens is you enter a slam dunk setup, only to wake up the next morning with your stock gapping down because of an analyst down grade. Now your stock is gapping below your stop, and you have no idea what to do, so you exit your position. Two days later your stock not only bouncing back to your entry level, but has totally forgot about the basement dwelling analyst who tried to kick your stock to the curb!
While the downgrade itself is out of our control, how we react to the news can not only be controlled, but also used to our advantage.
In today’s video I show you exactly how I deal with analyst downgrades, both when I am in a stock and also when I am just looking for trade opportunities.
How the Swing Trade Report Helps:
I’ve designed my swing trade report to help those who are new to part-time trading avoid the hurdles that held me back for years. First is the education. As I mentioned above, it’s easy to collect “trading trivia” that feels valuable on the surface but is functionally useless. The strategies that I use and teach have zero fluff. If something isn’t useful in the real world of trading, I don’t include it. As someone engaged in part-time trading, you must focus your limited hours and mental bandwidth on what is most useful, and my report will help you do that.
One of the biggest mistakes I made as a new trader – and it’s one that almost all new traders make – was not managing my risk properly. It’s important to understand that the way a day trader and a swing trader manage risk aren’t identical. When you are part-time trading, you can’t sit and watch every tick of a stock. Some stocks that would be fine to day trade are simply too volatile to swing trade safely. I curate my watchlist with this in mind, leaving out the craziest momentum stocks, while keeping huge movers like $FCX (19% gain, 3-day hold), $UCO (27%, 2-week hold), and $NUGT (24% 2-week hold). When I alert a stock from my report, you run little risk of missing the entry and chasing, and you won’t have to be worrying that it will make a drastic move overnight.
The swing report will help you gain confidence as a trader. Rather than trying to piece together something that works from a random collection of books, forum posts and blogs, you’ll get one concise, cohesive report that gives you everything you need. No more jumping around from one system to the next. No more blindly following the latest social media buzz. You’ll earn your confidence as a part-time trader one successful swing trade at a time.