A Day in The Life of a Swing Trader

Swing Trading is Not for Kids!

 

Swing traders rely on the short-term price and pattern trends of stocks. They are not concerned with the literal value of the stocks. Generally they want to conclude trading and make a gain within a few days of the initial transaction, but sometimes swing trading can be something done in high frequency trading as well.  Here we will focus on swing trading that lasts at least one day.

Swing traders always need to find new ideas and set ups that are promising, and trading at home allows them to analyze patterns and trends more quickly than if they were on the stock market floor.

 

A Typical Day in Swing Trading

Prior to the Bell

Smart swing traders begin their work day before the stock market opens. They do this to investigate potential trades and get a good feel for how the market will go that day. The best ways to do this is to watch a national news channel with heavy financial information. They also keep looking for trends and check on their current transactions’ status.

Navigating Potential Transactions

Opportunities for swing traders can often be found by using reliable stock news websites and alerts. Companies that have been taken over or bought out as well as those who are making public offerings for the first time can often be easy targets for investors.
Other opportunities for swing traders are bankruptcies, restructurings and mergers. In addition, finding companies who are nearing their support or resistance levels are good targets.

Creating a Watch List

A watch list is a swing trader’s way of keeping the stocks they want to watch well organized. They should use a spreadsheet, white board or ledger to record changes during the day. It’s a good way to spot trends and changes in the market.
 Checking the Status of Current Trades

A change in the market overnight can have a huge effect on current trades. The swing trader wants to look at it closely to determine which (if any) of their trades have been affected. Depending on the outcome, they will use strategies and watch closely during the day to ensure they make the right move.

Trading Hours

This is a highly volatile time for a swing trader. They have to be prepared to respond to the market at a moment’s notice while quickly analyzing trends and the position of their trades. One way to effectively navigate the day is by knowing the support and resistance levels of their stocks. Once a trade has been made, a swing trader’s strategy is to start looking for an exit. Adjustments and concessions may have to be made throughout the trading day. A trader should not make an adjustment that will put him in a more perilous position.

Sometimes however, a swing trader will simply put an electronic stop out for a fixed strategy and either go golfing, or work another job somewhere. Some feel this works better because it completely removes you from the emotional aspects of the trading day.

After-Hours

When trading closes for the day, a swing trader has to make a record of everything they have done that day. Looking at trending information and doing a quick overview of their gains and losses during the day will help them evaluate their performance. By developing a strategy like this, they will be able to see their patterns and improve.

Other Day Trading Strategies

Swing trading professionals know what the indicators are for making each trade. Often, if they see a stock gap more than a certain percentage, they will not touch it. Lower gaps mean less risk and there are strategies to figure out exactly how much should be invested.

Exit Strategies

Swing traders always monitor the state of the market. If things start to look more volatile than normal, they will stop trading for the day. Traders will also use stop-loss measures to ensure they will not lose more than intended in a day. This way, they know exactly when to stop even if that point comes at ten in the morning.

It is important to have multiple exit strategies based on the percentage they gain or lose so mistakes are minimized. The better your swinging day trading strategies are, the bigger your overall profit long term

One Response to “A Day in The Life of a Swing Trader”

  1. High Frequency Trading Tips: EMN - Eastman Chemical Co. Says:

    […] either. After all, that’s what stop losses are for, and of course anyone who has lived a day in the life of a swing trader knows that a lot of shorts can make for a really good […]

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