Swing Trading

Now, let’s see Wikipedia definition of swing trading, “Swing trading is a speculative trading strategy in financial markets where a tradable asset is held for between one and several days in an effort to profit from price changes or 'swings'. A swing trading position is typically held longer than a day trading position, but shorter than buy and hold investment strategies that can be held for months or years. Profits can be sought by either buying an asset or short selling. Momentum signals (e.g., 52-week high/low) have been shown to be used by financial analysts in their buy and sell recommendations that can be applied in swing trading.” And they continue, “Identifying when to enter and when to exit a trade is the primary challenge for all swing trading strategies. However, swing traders do not need perfect timing—to buy at the very bottom and sell at the very top of price oscillations—to make a profit. Small consistent earnings that involve strict money management rules can compound returns over time. It is generally understood that mathematical models and algorithms do not work for every instrument or market situation.”

Well it seems that I have been “swing trading” for a while now, because with short term and smaller profits is how I made my bread and butter. If I may give some advice is this, stocks don’t trade in a vacuum, well at least most of them, swing your trades trying to follow the general market and group, and maybe, just maybe you have a fighting chance.

Let’s take a look at my two last trades, which I made trying to swing with the group.

DTE is a utility with earnings expected to be announced before market hours on 24/10. Its yield is a respectable 3+%.

On Oct 18, even though it closed negative, DTE defined a very short term support at 110.5 after forming a new “higher low”, momentum was building.`

I put my buy order at 110.80, breaking a little resistance, at market close.

Next day my trade worked wonderfully, and I finish the day with a 1% profit, the stock weakened a little at days end but still I kept my trade.

And this is right now, my 110.5 stop loss is kind of far, but various things I don’t like.

45 degree uptrend line broke

0.618 retracement reached; don’t like it, profitable swings should hold way above this line.

Tomorrow is the last day before earnings, should I hold?, get out without a loss?, uhm, I’ll wait for today’s last trading hours maybe.

Shalom alle,