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Simple Swing Trading Strategy

This is my Favorite Swing Trading Strategy, its easy to find lots of promising stocks and has a very high winning percentage.

1) Go to: http://www.finviz.com/ ,then on the top menu bar click screener.

(Note, click on any of the charts to see it full size)

Simple Swing Trading Strategy

2) Now we setup our screen with the following parameters:

  • Average Daily Volume Over 100K
  • Signal: Unusual Volume
  • Price Over $1
  • TA (Technical Analysis)

Simple Swing Trading Strategy - FINVIZ Screen Setup

3) Scroll through the results. We are looking for stocks that have formed a base over a period of at least a few months.

4) Here is a good example of what we are looking for as a candidate for the strategy:

Simple Swing Trading Strategy - FRO

and another good example:

 

Simple Swing Trading Strategy - ONTY

 

5) If you haven’t already create an account at www.freestockcharts.com create a portfolio called “Unusual Volume”

Note: I have created several videos on how to setup Freestockcharts.com, click here for my YouTube Videos.

 

FreeStockCharts - Setup Portfolio

6) Then setup the 20 Day Moving Average so you can use the Simple Swing Trading Strategy.

 

FreeStockCharts - Setup 20 MA

FreeStockCharts - Price History

FreeStockCharts - Change to 20 MA

7) Now that you have FreeStockCharts.com setup and some promising stocks added you will need to monitor them everyday looking for the setup.

Here is what we are looking for:
  • Prices broke out of a few months long base on HIGH volume.
  • Prices then consolidate or correct in price to the 20 period moving average.

I am using stockcharts.com to show the setup. Its easier to see how it works.

8) Here is a great example of a setup that you are looking for to use the Simple Swing Trading Strategy, notice the rapid price increase out of a base on MUCH higher than average volume.:

 

Simple Swing Trading Strategy -CEMP - Setup

9) Here is the buy, once you enter the position, set your stop loss just below the entry bar (shown next chart down):

Simple Swing Trading Strategy -EMP - Buy

10) Now we are looking for a minimum gain of 20%, if and when we get a 20% gain we exit half our position:

 

Simple Swing Trading Strategy -CEMP - Exit Half

 

11) Now that we closed half our position, we want to move or stop up and protect our profits:

 

Simple Swing Trading Strategy -CEMP - Move Stop

 

12) In this example we got lucky and got another big rally to close out the position for a huge 60% gain:

 

Simple Swing Trading Strategy- CEMP - Close Out

Of course it doesn’t work out this perfect. BUT enough of them do to offset the losses that you will inevitably have.

As long as you follow the Simple Swing Trading Strategy you will make money! You must be disciplined and use stops to get you out of trades that don’t work out.

See my post on another great swing trading strategy.

This is one of the strategies that all successful stock picking services use like Jason Bond and Microcap Millionaires. I would recommend using a swing trading service at least until you can pick stocks reliably on your own.

Here are the two stock picking services I use for almost all of my trades: Microcap Millionaires and Jason Bond Picks

You can read my reviews here: Microcap Millionaires Review and Jason Bond Picks Review

If Penny Stocks are your thing, then you should definitely check out Microcap Millionaires.

Read my review of Microcap Millionaires

You can read all my reviews on stock picking services here:

Stock Service Reviews

If you are looking to open a brokerage account or looking for a better one, I wrote some reviews of brokers I have used and currently using.

OptionsHouse Review (Currently Using)

Scottrade Review  (Used when I first started)


If you have any questions feel free to contact me.

– Robert Walsh