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Hello All,
Some of you asked for more information on Swing Trading.
My method for Swing Trading is:
1. I want minimal daily interaction (I have a day job), controlled
risk to prevent wiping out my equity and stated realistic profit
objectives. I always place my orders in the mornings, before the
market opens.
2. I start by finding a set of stocks using Friday EOD prices that
meet my price action criteria.
3. I narrow down the set of stocks using my insight into potential
market conditions the following week. I may decide to only buy long
or only sell short, etc.
4. On Monday morning I buy or sell short my selected stocks.
5. On Tuesday morning I add a protective stop for each actual buy (or
sell) based on my risk limits.
6. Beginning Wednesday morning, I review the price action from the
previous day. If the position has moved in my favor, my risk will
have decreased and I can adjust my protective stop to begin locking
in a profit but still not exceeding my risk limit. If necessary I may
initiate a partial sell (or buy if short).
7. Regardless of price action, I do not hold positions past Friday.
Typically, unless stopped out, I close a position when it reaches my
reach my profit objective. My goal is to minimize risk thereby
limiting my losses so if 50% of my trades are losers, my equity curve
trend is still up.
8. After I close a position, I do a post mortem analysis, thereby
continually fine tuning my system.
I find it is very important to always know my risk, have a stated
profit objective, and always, always use protective stops.
I stumbled upon an excellent software application that really helps
me control risk and know how my system is doing at all times. It's
named STOPS and can be found at www.numasoft.com
Thanks,
Steve
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