How to use momentum to find swing trades

Swing trading s a style of trading in which speculators profit by capturing part of a explosive move with low risk. It is active trading style that looks for several hundred trades a year.

There are many different ways to swing trade that I know of , but I focus on primarily swing trading stocks with established momentum.

When a stock has momentum it exhibits certain tendencies and if you study those tendencies you can profit from them.

ATHM is recent example of swing trade on a stock that had just started a momentum phase as defined by my momentum indicator Stockbee Trend Intensity.

Everyday I scan for stocks with Stockbee Trend Intensity above 1.05. ATHM showed up in these scans for first time on September 26th. On September 30th , it showed up in my Anticipation Scan as it had consolidated for 7 days after establishing momentum. On October 3rd it had a breakout and as I had it in my watch list I saw it early.

In these kind of swing trades the stop I use is low of the entry day which was 24.37. The stock had follow through next day and was up 6.93%. I closed part of the position to lock in quick profits. Third day it was up more till 10:30 AM before fading the gains. But by then I had exited the trade at 27.87. I always like selling in to strength. the stock did move a bit more after that before fading the gains. But by then the trade was over for me.

If you see this stock, it made 16% move in 3 days before fading yesterday. That is the kind of momentum burst which show up regularly on momentum stocks.

The key to trading these kind of move is to understand the nature of these moves. These moves are just 3 to 5 days move. So I am looking for exit on 3rd day if trade has already made 8 to 20% by then. Exiting in to strength is best in these kind of trades.

How can you find these kind of trades?

The entire process to identify and trade these kind of moves has been detailed on this blog multiple times. If you study the posts highlighted in the sidebar you will see detailed guidelines to scan for these setups.

If you are serious making money swing trading, invest in a software, setup scans, find stocks with momentum , develop process to trade them. If you can do that you do not need stock picks from others.

Best site to learn to trade

If you are serious about your trading and want to build an enduring edge, the Stockbee Member site might help you.

Members tell me they have tried a lot of things before coming to my site, and it has offered them the most extensive and detailed methods to swing and position trade. Members range from very experienced traders to novices.

No advertising, no hard marketing, no promotions, no free offers, no affiliate marketing, no incentive to other bloggers to promote the site, no constant tweets self-promoting the site, and no tall claims. Every member comes through word-of-mouth recommendations from existing members.

As a member, you will learn the basics of swing trading, momentum investing, growth investing, and risk management. You will learn about Stockbee Momentum Burst breakouts, Stockbee Trend Intensity Breakouts, Stockbee Episodic Pivots Breakouts, Stockbee Lemonade Strategy for 401k, and many other member-shared methods.

You will learn how to set up your own scans, how to select the right kind of stocks, how to set up stops, when to enter, when to exit, how much to risk, how to track your trades, and all other details about trading.

You will learn about developing your own methods and not relying on others for trade ideas. Develop your own edge. Once you develop your own method, you will have a lifelong profitable method.

The site gives you an opportunity to interact with some of the most successful traders and learn from them about their trading methods. It is a vibrant community with members from different backgrounds and experiences willing to help each other. Members have shared their methods, scans, software, backtests, and market insights.

Every day, the emphasis is on continuous learning and upgrading of market knowledge and setup knowledge. The members range from hedge fund employees, financial advisers, active swing traders, investors, and new traders.

You will see that many trading bloggers have been using my market timing methods, scans, and chart templates. They have developed their own methods based on my methods.

Almost every member comes through a recommendation of some of the leading trading bloggers and trading sites. 80% or more members continue to be members for more than 3 years. Most tell me that they stay on because every day they learn so much from the members' site.

If you are looking to develop your own trading strategy, the membership site might be for you. You have to be willing to put in the effort to build your own method. There are no silver bullets offered on the members' site. Every method, every scan, every nuance is detailed, and all possible help is offered to design your own method.

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