Using Swing Trade Notes

Shooter writes his weekly “Swing Trading Notes” as a primer for trades that he might act on this week. Alerts and updates are made in the RARE Investing group chat. Swing trades last from a few days to a few months. To participate, you must prepare with the “Swing Trading Notes” piece and follow along in chat.

He also puts together his “Primary Waves” pieces for position traders for positions that last from quarters to years. These pieces will help you build longer term positions and manage your asset allocation over time.

Please take the time to read his foundational pieces and other linked resources on how he trades:

Foundational Technical Analysis

Getting Started In Technical Analysis

Every investor should read Getting Started In Technical Analysis for a broad understanding of what is going on beneath the hood of the stock market engine. It will help you regardless of how long your preferred hold period is. This book helps you learn the language of the stock market.

Shooter’s Elliott Wave Quick Start

Elliott Wave & Harmonics Deep Dives

Beyond basic technical analysis tools, Shooter applies a rigorous AI assisted Elliott Wave and Harmonics analysis. These are 3 of the foundational pieces for learning to recognize what you see with Elliott Wave and Harmonics.

Wyckoff & Volume Weighted Analysis

I (Kirk) like volume weighted analysis most of all because it shows us where big money is moving into and out of stocks. That is a key to finding pivot points and avoiding the messes in the middle of the markets. I have also been using the Wyckoff method since the late 1990s which discusses the four basic types of periods with stocks:

Swing Trading Is A Job, Not An Add-on

Swing trading is a job. I already have two full-time jobs, luckily they are very related, so, I can do them both. I don’t swing trade much, maybe a dozen trades per year that are very specific to a catalyst at a company that’s coming up or a macro event. 

Virtually everything I do is a “position trade” that lasts from quarters to years. You can position trade and manage your own money with several hours per week of reading about your investments and fine tuning your GTC trade orders week to week. 

If you have a fulltime job, you should probably not swing trade. I almost never purely “swing trade the charts. It’s hard and not worth giving up time on my other jobs. And, I say that having had some success in my career doing it.”

Just consider who you are up against. It’s semi-retired professionals with the capital to stay home and trade their own book. It’s the hedge funds. It’s the quant shops. It’s the big investment banks. It’s the high frequency traders.

And, they all have awesome data, technology and experience. They are well capitalized sharks with super computers that swim in packs. Sure, you can be the pilot fish skimming their scraps, until of course, the sharks don’t see anything new to eat in front of them and turn around to see you. 

You will have to allocate time and study to become a winning swing trader. It is a lot like poker with all of the money made by 20% of the players, while 80% lose (breaking even is a loss because you could do something better with your time).

Who's the sucker?
Who’s the sucker? (Paul Newman)

For most of you, i.e. position traders, Getting Started In Technical Analysis and the quick start pieces for Shooter’s charts is enough. But, if you really want to swing trade, then Shooter is one of the best to follow, so long as you do the work. Don’t be the sucker at the table.

The Sting | Paul Newman Cons a Con Man in a High-Stakes Poker Game in 4K HDR

So, all those warnings out of the way. Remember this simple advice for swing trading.

  • Look for what could go wrong.
  • Enter small.
  • Enter slow.
  • Manage risk first.
  • Cut your losers fast.
  • Ride your winners.
  • Sometimes, pyramid your winners.
  • Take your profits in pieces.
  • Be humble because the market will humble you.

There is a ton more to learn about swing trading: oversold, overbought, reversals, trends, divergences, converging triangles, 3-drives and more.

If you want to be a great swing trader like Shooter, then be the lifelong learner that he is.

And, remember to follow Shooter on Twitter @swingtradenotes for added market thoughts.

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