Making swing trading easier on us!
One thing that changed my swing trading dramatically....i define swing trading as stuff i plan to hold for a few weeks and maybe months...(yes it can be days if something moves real fast, but mentally prepared for longer hold times when im swing trading...)
was when I literally Stopped trying to buy stocks that are going down...thinking that the stock is going to REVERSE a down trend and suddenly go back up....
when you completely overhaul your mind from buying something you like or the old investment psychology...to literally viewing it as im trading a piece of paper that has momentum...and my goal is to simply put probabilities in my favor...
ie find stuff im right on more than wrong...then dissect a firm risk management process....
well when you simply scan for stocks working....sounds simple and it becomes easier when you get comfortable with the process...but literally is the stock going up? ie how much near term resistance does it have? well a stock to me with a lot of digestion overhead, i just move to the next chart or stock....and only scan for stocks showing Relative strenghth...
ive found that strong stocks...stay strong...and you put odds in your favor of staying with that batch of opportunities...rather than trying to be smarter than the market ie when a stock is down and out, well theres a lot smarter people than I that know the WHY its down a lot and not in favor...so ill go with conenseus, and avoid em....i dont try to pick bottoms with SWING trading momentum trading...
i try to find Strong stocks, showing relative strength, making new highs (doesnt have to be all time highs or multi year highs, but its usually recent highs....then i find those stocks that have easy to spot TA bull patterns...a simple flag, a base, a consolidation a clean TA pattern that i can then get a EW count on....believe me there are thousands of stocks...so when when doesnt fit your eye...who cares? move to the next one...there are always profit potentials abound..
and we as traders only have limited capital to put into our various strategy buckets...so why waste putting the capital in stuff that isnt working or has lower odds? well a lot of us (i speak from experience) do it for pride...to prove we are smarter than the market or whatever....
but at end of the month and quarter and year....do your accounts care if the $ profits where made from Hard prideful setups ie you beating the market...or you just going with the flow and accruing profits easier and smoother...
NO! your accounts don't care! so make it easier on yourself and buy stocks going up...and sell/short stocks going down...i know that sounds simple...but there is absolute BRILLIANCE in that sentence...i fought it for too many years...and im telling you dont do it the way i did...trading is hard enough...so put the odds in your favor to make it a little easier on yourself....
