Swing Trading 101

Swing Trading is a great way to gain exposure to stocks but with less risk than day trading and great for beginners who can’t day trade because of the PDT rule. I will go into more detail below on this style of trading and check out the rest of my site for more tips and tricks about my journey into swing trading full time.

Definition of ‘Swing Trading’ from investopedia.com

A style of trading that attempts to capture gains in a stock within one to four days. Swing traders use technical analysis to look for stocks with short-term price momentum. These traders aren’t interested in the fundamental or intrinsic value of stocks, but rather in their price trends and patterns.

I became interested in swing trading when I first found out about the pattern day trader rule PDT,

Definition of ‘Pattern Day Trader’ also from investopedia.com

An SEC designation for traders who trade the same security four or more times per day (buys and sells) over a five-day period, and for whom same-day trades make up at least 6% of their activity for that period.

How do you avoid the PDT rule??? Have 25k in your account at all times. I spent years reading books about how to trade stocks and always thought I came to a dead end when I read that silly rule. Here’s the good news, you can still trade stocks! That’s where swing trading comes in, holding stocks for more than a day, if possible and gives your account time to settle funds from previous trades. I bring this up because I get a lot of questions from beginners who don’t have 25k but still want to trade. I have spent time under the PDT rule and as long as you spend wisely you will have access to a portion of your cash most of the time. Enough about that, there will be plenty of blogs on that coming soon.

Under 25k and looking to build your account as quickly as possible? Check out a service I use called Penny Pro

I’m writing this section as if you have no idea about swing trading. As a swing trader you aren’t looking to hold a stock long term so a lot of fundamentals that come from picking stocks for a retirement portfolio are different. Usually you want to invest in a company that has lots of cash, little debt, a good history, dividends, recent news, rumors, etc. With swing trading, you might buy a company with many different qualities or maybe just one of the ones I listed. The goal of a swing trader is to find stocks that have the greatest potential of going up in price with the least amount of risk. So we spend time filtering stocks with different criteria’s to find companies we might want to invest in. There are many stock scanners out there to use, I currently use Finviz.com which has amazing charts and filters to find almost any setup. Everyone has different styles and search criteria. I filter my stocks with criteria that I obtained from Jason Bond Picks, a stock service that I use. More on that here. Jason has a proven system to find stocks with his filters and I won’t share them because I don’t think he’d like me giving that away for free.

Where should you start? Keep it simple and start smart. Don’t just jump in and follow people before you know how to READ CHARTS! This is the most important thing every trader should know. Every trader should take a course from Steve Nison on candle charting. His courses are available online and can be found at www.CandleCharts.com.

Blog Post: My 8 Simple Steps to be a Stock Trader

So yeah, that’s swing trading. Pretty simple right? Visit and follow my blog to get all my stock trading tips!

My Computer and Screen set up that I use for Trading

Comments (2)

  1. Bailey October 13, 2016
    • Kevin October 18, 2016

Leave a Reply