your guide to - investor's business daily...many traders employ either fundamental analysis or...
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YOUR GUIDE TO
This guide can help you get up and running with SwingTrader
in a few short minutes. Print it out or bookmark it, and call our
Customer Success Team at 800-831-2525 if you have questions
about your account.
Here’s how swing trading compares to two other popular trading strategies.
01 The Basics of Swing Trading
Swing trading is a stock trading strategy that takes advantage
of short-term price swings to generate profits. The idea is that smaller
gains, reinvested and compounded over time, can add up to big profits.
Q u i c k P r o f i t sL e s s s t r e s s L e s s a c t i v e ,
s l o w e r p r o f i t s .
Day trading relies on stocks being bought and sold within the same day, sometimes within hours or minutes. It’s very fast-paced and requires constant attention during market hours.
Swing trading is the sweet spot between position and day trading. It relies on quick trades (most fall within a 5 to 10-day timeframe) and smaller profit targets, compounded over and over.
Position traders hold stocks for weeks, months or years. The daily hands-on time commitment is low, but it can take a long time until you realize profits.
D ay T r a d i n g
S W I N G T r a d i n g
P o s i t i o n T r a d i n g
U lt r a - f a s t, l o t s o f e f f o r t
Hold stocks for a shorter period of time
Take smaller profits
Cut losses quicker
To enable alerts on your desktop
computer: Click “Allow” and you’ll receive
instant noti�cations.
02 The Keys to Swing Trading Success
Every morning, log on to swingtrader.investors.com to check the Market Action (found in the top-right corner of the SwingTrader homepage).
If the arrow is pointing sideways or down, this is a more risky time to trade, and you should approach trades cautiously.
Finally, pay attention to SwingTrader
alerts and be ready to take action
when you receive an alert.
When it says “Market in Uptrend”
and the arrow is pointing up, that
indicates it’s the most favorable
time to swing trade and generate
big profits.
Create a daily routine - the most important key to success with SwingTrader
After reviewing the Market Action, take a few minutes to look at the stocks on the Current Trades list at the bottom of the SwingTrader homepage.
Check out the charts, the buy zones, the profit goals and the stop losses.
SwingTrader typically locks in profits at 5-10% so you won’t
risk giving back your gains if you hold on too long and the
stock later reverses, which is called “roundtripping the trade.”
Swing trading success is all about having a plan before you
go into every trade. You want to know the exact price to pay
for the stock, the price to sell it for a profit or the time to
cut your losses and move on to another trade. SwingTrader
gives you all three in the Trade Setup area.
SwingTrader cuts losses quickly at 2-3% so you can move on and find
another stock that’s going up instead of down. Not every trade will work,
but holding on to a falling stock too long and trying to “hope” it back up
can make losses worse and hurt a portfolio.
02 The Keys to Swing Trading Success
If you buy and sell SwingTrader stocks as close to the optimal times that our
team recommends, you’ll have the best chance to maximize your profits and
minimize any drawdowns.
Plan your trade, trade your plan
Find the free SwingTrader
app in the App Store or
Google Play.
Since swing trading relies on speed and timing, we’ve created a free
SwingTrader app as a companion to the desktop experience. With the
app, you can receive instant trade alerts when a stock is added to
SwingTrader or when a stock reaches a buy/sell point.
02 The Keys to Swing Trading Success
Download the free mobile app
03 The System and the Strategy Behind SwingTrader
SwingTrader generates market-beating returns in part because it’s based
on the time-tested CAN SLIM® Investing System. This system was created
by legendary investor William O’Neil based on decades of research into
one question: What makes a winning stock?
O’Neil found that the best stocks throughout history shared seven
characteristics; these characteristics are each represented by one
letter in the acronym “CAN SLIM.” The system is designed for mainly
position trading, but by adapting its rules for a swing trading
environment, SwingTrader has a unique and powerful advantage that
no other swing trading product offers.
Many traders employ either fundamental analysis or technical analysis to guide their buy and
sell decisions. SwingTrader combines both: fundamental analysis to identify the stocks, and
technical analysis to determine when to enter and exit the trades.
relies on examining
stock charts for clues
about when to buy and
sell a stock.looks at the
underlying
attributes of the
companies behind
the stocks.
F u n d a m e n ta l
A n a lys i s
Technical
Analysis
SWINGTRADER
SWINGTRADER
Thu 10:31 AM
Thu 10:24 AM
We’ve got about a 2.5% profit in ITBand we’ll take 1/3 profit here at 57.48.
Starting a full position in CRWDAdding CRWD at 143.76 as it getsabove the Sept. 23 high. We’ll use a
For a video tour of the SwingTrader interface, go to
investors.com/swingtutorial
ENTRY POINT: Buy a stock when it’s in
the IBD® Buy Zone. If you enable desktop
notifications or download the mobile app, you’ll get
a Buy Alert when the stock reaches a price in the
IBD Buy Zone. Execute the trade with your broker
of choice.BUYING TIP FROM OUR EXPERTS Sometimes a stock
will jump in price quickly—or almost instantly—after a
SwingTrader Buy Alert is sent. If you receive an alert but the
stock is out of the IBD Buy Zone by the time you’re ready to
trade, don’t chase it. Wait to see if it comes back into the Buy
Zone, or move on to the next trade.
04 HOW TO USE SWINGTRADER
04 HOW TO USE SWINGTRADER
SELLING TIP FROM OUR EXPERTS Based on your risk
tolerance and trading style, you may not want to set a
hard stop-loss order with your broker based on the
SwingTrader Stop Loss. This is because our team will
sometimes wait until the end of the trading day before
issuing a Sell Alert to see if the stock rebounds above its
Stop Loss price. If you’re able to be flexible and wait for a Sell Alert
instead of setting a “hard stop,” you can avoid prematurely selling a stock
before it has a chance to rebound higher.
EXIT POINT: Sell a stock when it reaches
either the stop loss price or the profit goal price.
Keep in mind that we’ll send you alerts when
either of those prices are reached, but we may also
send an alert and advise you to sell a stock and take
partial profits along the way. This can vary
based on market conditions.
IBD Buy Zone
Profit Goal
Stop L os s
Buying the right amount of shares is almost as important as the
stock you’re buying. Too many, and you’re taking on more risk.
Too few, and you’re not generating the type of profits that grow
a portfolio rapidly.
How many shares should you buy?
For example, you receive a SwingTrader Buy Alert for a full position of
XYZ. Your swing trading portfolio is worth $100,000, and XYZ is currently
trading at $30.
If you wanted to make the trade, you would buy 300 shares of XYZ at
$30 to create a full position worth 9% of your overall portfolio ($9,000).
Now say you receive a Profit Goal alert the next day because the trade is
succeeding. The alert says to take 1/3 profit on the position – so you
would sell 100 shares, or 1/3 of your 300 shares.
04 HOW TO USE SWINGTRADER
Each full position on SwingTrader
represents 9%-12.5% of a total portfolio
Post-Analysis05
Open a daily stock chart for a past trade and mark the day and price
where you initially bought the stock, making note of how many shares
you purchased at that price. (Printing out the charts is very useful for
this, which you can do at investors.com or your charting platform of
choice, like MarketSmith).
Next, mark the point(s) where you sold the stock, either for a profit or
a loss. If you bought and sold several times (e.g. you take partial profits
on Tuesday, then sold the rest on Thursday) before closing the position,
note those days and prices as well.
Now, compare your chart to the SwingTrader chart for the trade, which
you can find by clicking on Past Trades in the navigation bar at the top
of the SwingTrader homepage.
Here’s how it works:
Post-analysis is the process of examining your past trades after they
have been closed to determine what you did right, where you may have
made mistakes, and what you can do to improve in the future.
Think of it like an athlete watching replays after
the game to gauge performance and correct mistakes:
they’re trying to improve for the next game by
watching the last one.
05 Post-Analysis
Did you buy close to the price
listed on SwingTrader? If you
bought above the buy zone, that
can decrease your overall profit on
a trade or increase losses if a trade
goes against you.
Did you hold the stock after the
sell price(s) listed on SwingTrader?
Holding onto a winning stock for too
long in the hopes that it continues to
climb can cause you to give back a lot
of the profits. The idea for
SwingTrader is to enter a trade,
make a quick profit and cash
in your winnings.
Of course, not every trade will succeed, even if you pay the optimal
price and sell at the right time. But by keeping your losses small and
reinvesting your gains, you can keep your portfolio growing.
ask yourself
As a SwingTrader member, you’re invited to join our monthly virtual
meetup, Scorecard! It’s a great opportunity to hear from the experts
behind SwingTrader and ask them questions. During these virtual
meetups, our experts will conduct post-analysis of SwingTrader
stocks from the past month and discuss big picture market trends.
Watch the experts conduct post-analysis every month and pick up some
tips on doing your own! At SwingTrader, we’re dedicated to helping you
improve your trading—and your bottom line.
We’ll post details of upcoming Scorecard meetups
(as well as a recording of last month’s meetup) in
the message bar at the top of the
SwingTrader homepage.
On behalf of everyone at Investor’s Business Daily®, thanks for being
a member!
-The SwingTrader Team
© 2020 Investor’s Business Daily, Inc. Investor’s Business Daily, IBD and CAN SLIM and corresponding logos are registered trademarks owned by Investor’s Business Daily, Inc.
05 Post-Analysis
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