The reason why you want to wait until the stock actually breaks the previous day’s high is because you want to buy a stock on the move. You don’t want to anticipate the breakout, if it does not breakout then it can either continue to trade sideways or breakdown, dead money. When you buy a breakout on a stock that has been consolidating for 10-15 days in a tight fashion it will be real easy to know when you are wrong.
$SDOW $SCLN $SPXU $BJRI $AAPL $TRIP $HA $GOGL $LTRPA $BABA $TWTR are the stocks I will be watching today for swing long trades.
- Its main goal is to get you in when stocks are moving and keep you out in choppy/sloppy markets, it is imperative that you allowed the market to get you in only when the stocks go through their previous day’s high.
- Your awareness of how the market is behaving is crucial, this will give you an idea of how hard to push the envelope. My best indicator for this is my rolling 5 day watch-list.
- Swing trading is a numbers game, you are going to be wrong half the time, risk management is above all, and many times you will have nothing to do because the market did not get you in. We are not looking for any action, we are looking for the right action.
- Don’t be penny wise, don’t try to anticipate a move just because the chart looks good. You can have a great looking tight set up with a stock coiling for 10 days but who is to say that it won’t coil for another 5 days. If you anticipate the range expansion you might buy something that is not ready to go and it will only frustrate you and lower your odds of a winning trade.
- For me this list is a one way list – long bias. I do not look at this list as a long or short list, long and short are two different games with different dynamics.
- You need to be extremely organized. Most if not all your work will be done pre-market and you will spend the day just executing or you can just automated it with buy orders after 9:45am.