What’s your Swing Trading Game Plan?

I’ve been learning a lot lately about patience when it comes to swing trading. This also can apply to day trading. I’ve taken so many losses its not even funny. Why? Because I got scared out and didn’t have a game plan. Most of the time it happened early on when I first started trading. You can’t expect to buy at stock at any price and assume it will only go up right after you buy it. Unless you are momentum trading and buy it just at the right time you’re most likely going to go through some ups and downs. Here’s some things to help keep you from taking a loss and getting scared out too soon.

1. Have a Game Plan! Your game plan should consist of a few things. If you’re looking at a stock, and for this example I’ll use one I bought recently Royal Energy, ROYL. This stock was actually sent to me on one of Jason Bond’s watch lists (More info on his service Here). Now he can take a lot of the guess work out for you and I like it because it saves me a boat load of time. In his watch list he stated that ROYL is oversold after a recent run-up and it looks to be consolidating around 3.00-3.10. He also mentioned he would use 2.92 as the base of support. There lies the most important part of your strategy! Where is the base of support? This is extremely important to protecting your profits but also gives the stock time to figure out what direction it wants to do. I bought ROYL at 3.08 because I decided the potential was greater for a bounce than going lower. Now if I set a stop loss at 3.07, I’d be out and never made anything. Using your base of support at 2.92, which I did, the stock actually dipped over the next week and traded between 2.90 and 2.99. I held but I knew if it dropped below the 2.90’s I would sell, because it will drop lower to its next level of support and we lost the momentum from the bounce. It never dropped below 2.90 and I knew the probability of it going up was getting higher. About a week after I bought it, the stock started to turn back up and is now trading in the 3.20-3.25 range and last closed at 3.15. Thankfully I had a plan set up and stuck with it because now I’m looking at getting a nice pay out in the 5-10% range.

chart.ashxClick to enlarge.


2. Know how to read charts. With your game plan you need to understand how to read charts and there are tons of resources for that. The best one is Steve Nison’s candlestick course. This is probably the best course you can take and can download his dvd’s online. This is every traders must do! Looking at the chart above, you can see now on the last candle bar that its a very bullish candle on the daily. That puts me in a great position for the next day the markets open.

Now that you have your game plan and understanding of charts, the confidence and patience will come along by itself! If I didn’t do those things I would of either sold too soon in the 2.90’s and taken a loss or sold at the 3.20’s and left money on the table. We will see what happens on the next day of trading but you have to remember its all about the odd’s, I feel the probability of this stock going higher on monday is higher than it going lower so thats why I held. We will see what happens!


Comments (2)

  1. Steve June 14, 2014
  2. Joe April 2, 2015