This book is a simple, practical guide to swing trading. For years I have been < /p>
reading books and exploring web sites that are dedicated to swing trading. Yet, I
could not find any simple description of how to enter and exit a trade. So I
developed some basic rules that have been published on my web site
www.mrswing.com. I call these rules The Master Plan. Over the years, thousands
of investors have used my Master Plan to swing trade. It is my firm belief that a
swing trader must trade with discipline. While it is important to keep things
simple, the rules of the Master Plan might seem a little intimidating. The main
reason I wrote this book was to make swing trading more accessible to the
beginner. These rational behind swing trading and the entry and exit rules are
presented very clearly – both the beginner and the experienced swing trader will now
have a simple guide to follow.
To quote Albert Einstein: "Things should be made as simple as possible, but not
any simpler". This is the principle I followed while writing this book.The main objective of a swing trader is to profit from swings in price
movement over the course of several days. While we might trade every day, we are
not day traders. As swing traders, we have the patience to wait until our profit
goals have been reached. Fortunately, the wait is not too long. A typical trade is
only in play from a few days to a few weeks. When a trade is closed, the funds go
into the next trade.
Money management is very important in swing trading. I divide my trading
capital by 15. This is the amount that I put into each trade. As the total account
grows, the amount of each trade grows. If you can handle a larger number of
trades, you might increase the number of trades that are active to 20. Of course
you can also start with 2 or 3 trades at a time.
Each day I identify 20 to 25 candidates for swing trading. If I have 10 trades
active and enough additional investment capital for 5 more trades, I pick the best 10
from my list of 25, and place the orders. Only some of orders will get filled. I don’t
worry about running out of money – if there is no cash left in the account, additional
orders will simply not get filled. (Make sure that your own account works this way,
otherwise, your brokerage firm might fill the order and expect additional funds within
the next few days.)
You must make a personal decision as to whether you want to trade on margin
or not. If you are more conservative, you will only trade with the cash that you have
on hand. As I discuss later in the book, margin is necessary for selling stocks
short, so it is important to have your account approved for margin trading, even if
you don’t plan to trade on margin.
The stocks I identify as good swing trading opportunities are made available
each day through my MasterSwings service. Once a week, my picks are made
available on my website – www.mrswing.com – or by e-mail, through my free
MrSwing Lite service.
Swing trading should be both profitable and fun. Through the guidelines
outlined in this book, you can achieve both of these simple objectives.
Comments
Post a Comment