The Beginner's Guide to Swing Trading Stocks | Travis Rose | Skillshare

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The Beginner's Guide to Swing Trading Stocks

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Taught by industry leaders & working professionals
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Watch this class and thousands more

Get unlimited access to every class
Taught by industry leaders & working professionals
Topics include illustration, design, photography, and more

Lessons in This Class

10 Lessons (60m)
    • 1. Introduction

      1:37
    • 2. Swing Trading vs. Day Trading

      4:48
    • 3. How Part-Time Trading Works

      4:05
    • 4. Trading The Trend

      4:34
    • 5. Finding The Best Stocks to Swing Trade

      11:43
    • 6. Analyzing Your Stocks

      7:53
    • 7. When to Enter Your Positions

      1:58
    • 8. When to Exit Your Positions

      3:39
    • 9. Live Examples & Analysis

      12:29
    • 10. Risk-Free Trading Practice

      6:58
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About This Class

The Beginner's Guide to Swing Trading Stocks Part-Time access also includes a free stock trading ebook download with in-depth trading strategies, education and tools!

This class is a step-by-step guide to finding, analyzing and executing the best swing trades in the stock market without having to stare at your computer screen for hours or constantly analyze and manage your positions.

You'll be learning from a self-taught, full-time stock trader on a mission to help other traders avoid the same mistakes that he made early on in his career.

If you're someone interested in getting started in the stock market, but do not have the time to focus on trading full-time... this class is perfect for you!

What You'll Learn:

  • Swing trading vs. day trading

  • Swing trading benefits

  • How part-time trading works

  • Trading the trend

  • Finding the best stocks to swing trade

  • Analyzing your stocks

  • When to enter your position

  • When to exit your position

  • + Live trading and analysis examples & more!

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Transcripts

1. Introduction: Alright, thank you for checking out this class. Again, my name is Travis rows and full-time day trader and the stock market. And I'm going to be your instructor and I wanted to give a brief background on myself to just kind of explain to you why I am and how I got started as a teacher, actually teaching how to day trade, swing trade, and invest in longer-term. So as I already mentioned, I've been day trading, swing trading for a little bit over five years now. I started off trading stocks only part-time while I was going to school and working. And eventually that grew to me trading full-time, actually making a full-time income, doing so. Now when I got started as a trader, I really tried to learn everything on my own. And I really didn't follow anybody's advice or take anyone's classes or courses. And because of that, kind of led me to learn everything the hard way. So I wanted to make these classes help other new traders avoid the same mistakes that I made when I first started. And most importantly to do so at an affordable cost because they know a lot of courses can be very expensive. Some of them even costing $1000 or more, which is really what led me to learn all these things on my own, the hardware, because I really wasn't willing to or able to pay the expensive fees, learn from these so-called professional traders. So essentially that's what led me here today and that's why I started to create these classes. And so far I've helped quite a few traders improve their trading. And I hope that I can help you do the same. 2. Swing Trading vs. Day Trading: Alright, so let's go ahead and get started with some of the more basic stuff when we talk about swing trading, I want to first go over the difference between day trading, swing trading for those of you who may not already know. So when we talk about day trading, we're really just referring to the type of trading when you exit a position within the same day that you enter it. So pretty self-explanatory, right? When we talk about swing trading, we're talking about the type of trade where you're holding the stock. Anywhere from a few days all the way up to a few months. Generally speaking, this is going to be the type of trading that you're going to want to do. If you're somebody that already has a full-time job and maybe you don't have quite a bit of time to focus on getting in and out of trades more frequently like you would as a day trader. So especially if you're somebody that has let's say a job where you would be working at 09:30 AM Eastern Standard Time because this is when the stock market opens every day. And generally this is when we see most of the action in the market and this is where we see the best opportunities. So if you're busy within that time, you're going to be much better off just focusing on swing trading. And there's absolutely no problem with that because you can definitely make some great extra income as a swing trader with only part time put in. Now there are quite a few benefits that you may have already kind of figured out when we talk about swing trading as opposed to day trading. And the first is going to be that you don't need to stare at your computer screen all day when your swing trading. As a day trader, again, generally you're going to be focused on your positions much more and you're going to have to manage them and watch them more closely. Which can kinda cause you to be tied down to the computer for long periods of time. Which is really the opposite of what many people think of when they think about making extra money from the stock market. So that's of course a huge benefit to swing trading. Just being able to get in your position without having to manage it all day, every day. And then later on a few days or a few months later, getting out of the position hopefully with a profit. Now the next benefit to swing trading is that generally the positions you're going to be trading will have a little bit less risks than the ones you would as a day trader. And the reason for that is because when we're day trading, we want to look for stocks that have a lot of volatility, meaning that they go up and down much more quickly. And as swing traders, we want to look for more stable stocks with less volatility in width. That less volatility, of course comes less risk. Another benefit to swing trading is that you can start with as little or as much money as you'd like. So if you're brand new and you're not really confident in your skills or your education yet, then there was absolutely nothing wrong with starting with a very small amount of money. In fact, that's actually what I recommend because when you're starting off, it's better to of course, put less money at risk while you're still learning than it is to go in big with thousands and thousands of dollars. Because of course, those thousands and thousands of dollars are then going to be at risk for potential losses. So it's really recommended to start small until you gain confidence and you have a better understanding of how the market works. Fourth, a big benefit is that you can sway trade from anywhere in the world. So a pretty common misconception is that you need to be in the United States, the trade, the United States market. And that is of course not true. You can be anywhere in the world and trade in the United States market. What it really comes down to is what broker you're using to do your trading. So if you're somebody that doesn't live in the United States, you just have to make sure you open an account with an international broker. And another reason why this can be such a great benefit is because if you're somebody that does live in the United States and maybe you travel around the world quite a bit. You can still do your trading and still make some extra money while you're doing, you're traveling. Still without having to put in a ton of extra work, in a ton of extra time. And last, but of course not least, the big benefit that we all know of when we're talking about swing trading is that it's a very effective way to earn some extra income on the side of your main income. In of course, swing trading can actually surpass whenever your main income was before and become that main income source for you to do full time. These are going to be the main benefits to swing trading and the Neizha, why I really recommend new traders take this very seriously because it can be a very lucrative way to make some extra income with very little time spent. So stay tuned. We're going to talk about the ins and outs of swing trading. And you're going to learn just how you can actually find the best stocks, swing trade, and trade them profitably. 3. How Part-Time Trading Works: Now before diving into the good stuff, I want to go a little bit more into detail about how swing trading part-time actually works. Already mentioned, of course, that you don't need to actually analyzed in manager positions 24-7 as a swing trader. But I think it's important that you understand and realize how you can actually just buy into these positions and then let them do their thing over time without having to do much else after getting into the position. So of course, like any other trading or investing, whether you open your position is to buy order short-sell, which allows us to profit from stocks. Actually moving down in a way that you exit your position is that if you bought before, you would then sell those shares or if you short sold to open your position, you would then later on cover to exit that position. So the way we're actually going to find the best stocks swing trade is by using various different scanners and screeners to find the potential swaying opportunities. So don't let this scare you away. I note may sound a little bit complex, but scanners and screeners can be very simple. And I'm going to show you exactly how you can set up these scanners are a 100% for a to find you the best stocks swing trade. And it's really only going to take you a few minutes to do so. From there, the next thing we wanna do is create a trade plan. So that way we know exactly how much we stand to lose if they trade happens to move against us. And that's gonna take a lot of the fear and the anxiety out of our trading. So we have a trade plan and we're not worried about taking a huge loss. From there. We're going to figure out the best price to enter the stock because once you find something that looks good on the scanner or on your screener, it's important to actually wait still for the best price because you don't want to just buy in at a random Price and hope that the trade moves in your favor. We want to be very calculated and we want to have a trade plan, getting in and out of the trades at the very best prices. And from there we're going to sit back and simply wait for our trade to exit for us, whether it be at a profit or a loss. Now the way that we do this is with two main things. We're going to be using market alerts in pre placed orders to save us time and to avoid from having closely watched a market at all times. So if you're using a broker like E-Trade or TD Ameritrade. Pretty much any broker really is going to offer the ability to place market alerts. No market alert basically is gonna let you set a price for a stock. And once the stock hits that price, you're going to be notified on your phone or on your desktop or wherever you choose to set your market alerts for. So by having these market alerts, you're gonna be able to know when the price of your stock that you're in is at a certain price without having to actually watch it every second of every day. Then we're also going to have pre placed orders that we set right after getting into the trade. That's going to allow us to exit the trade at both at profit or a loss whenever the stock gets to a certain price. Again, without us having to manage the position constantly. In just to give you an idea of how that works. Basically, there are different order types that you can use when getting in or out of a trade. The very common one is going to be what is known as a good for day order. And that simply means that the order is good for the entire day. So once the market closes, that order is automatically going to be cancelled if it wasn't filled. But there is another order type that we're going to be talking about a lot, which is the good canceled order. And that's an order that simply means that it's going to be open until that orders filled, meaning until the price of your stock gets the price that you have put within the order, or until we cancel it manually on our own. By using these orders, we can set our order prices to sell our positions right after we enter the positions. And we can simply sit back and wait for the price of the stock. Two gets you are orders and fill us to exit a position. 4. Trading The Trend: All right, so I wanted to start this class off with a very important topic, which is trading the trend of the stock followed the trend. The trend is your friend. That's a quote from Jesse Livermore who isn't multi-billion dollar, self-made trader and investor in yes. And said multibillion dollar with a B. So I don't know about you, but if somebody that has made billions of dollars from simply following the trend of stock, it's telling me that I should also follow the trend. I'm probably going to follow the trend of the stock. And to actually follow the trend, it's very important that we understand the two types of trends in how we can actually spot them and use them for our own trading. So with that being said, I want to talk a little bit about an up trend, which of course is pretty self-explanatory. An up trend is a stock with an upward moving trend. And that trend is going to be created by two things. We're going to see both higher highs and higher lows. So what I mean by that is if we look down at the bottom here, I'm, I have this little diagram put together showing us higher highs and higher lows. We know that dogs don't just go straight up. They have peaks and they have dips over time. And the peaks of course, are going to be the highs, whereas the dips are gonna be the lows. So when an up trend, we see that each high is going to be slightly above the previous hire, and each dip is gonna be slightly above the previous tip. Those two things alone or actually what creates an up trend. In over here on the right side of the page, you can see that we have a real example of this in a real chart. And we have the symbol SPY up trending and we're connecting the dips or the lows of that stock with what is known as a trend line. And we're gonna talk more about trend lines in the future of this class. But I just wanted to show you that to kinda give you an idea of what you do once you actually spot the trend in what an up trend actually looks like on your chart. Okay, so on the other side of the spectrum, we of course are then going to have what is known as a downtrend. A downtrend is going to be a downward moving trend. And this is created by both lower highs and lower lows. So just like with an up trend where it's making both higher highs and higher lows. Downturn is then going to be making lower lows in lower highs. So again, we know stocks don't just go straight up and straight down. They have peaks and they have dibs and peaks and dips and peaks and dips, so on and so forth. And those peaks and dips are going to be making up the highs and the lows of the stock. And that's gonna show us whether or not the stock is in a downtrend. And in this case, because each of these highs is slightly below the previous i, and each of these lobes is slightly below the previous low. We do have a stock that is in a downtrend. And again, here's another real example with the chart CTR V. And one thing that you may have noticed is that in this example, we drew the trend line for this downtrend above the chart. Whereas with the previous example we true the trend line below the chart or this up trending stock. So that's just something you should keep in mind when you're doing your technical analysis and when you're drawing any kind of trend lines, is that in a downtrend, we put the tremor and above the chart as a level of resistance in an up trend would do the opposite by putting the trend line below the chart as a trend line out support. And again, don't worry if you're a little bit confused on that. We are going to be talking more about it in the future of this class. So just to kind of reiterate what we already talked about here, it's very important to again, trade the trend. Do not try to fight the trend. So if we have a stock that is in a downtrend, it's very important that instead of buying into the stalk, maybe you just avoid the stock entirely. Or maybe you look to open a short position instead. Because as we know, we profit from short positions when the stock goes down. So if a stock is down trending, the way that we would go with the trend and trade with the trend is by opening a short position. In on the opposite side of the spectrum. It's very important that we do not try to short sell. A stock isn't an up trend. Because when we buy a stock, we want the stock to go higher for us to make a profit. It of course, is only going to make sense for us to buy stocks that are up trending in, avoid short selling them, which would be fighting the trend of the stock. 5. Finding The Best Stocks to Swing Trade: All right, so now that we know little bit about trading the trend of the stock, I think it's very important for us to talk about how we can actually find the best stocks to trade on a daily basis. And more importantly, how we can do it in a very quick, in timely manner. Because this is again, something that we're trying to do as part-time traders. So realistically finding the best stocks that trade can kind of be half the battle when it comes to trading. Because if you're trading the best stocks that meet your specific criteria, then it's gonna make finding your entry and exit prices much easier. And it's going to make the overall trade and probably much more likely to be profitable. So first and foremost, to start scanning and looking for are stocks that meet our criteria. We have to go to a website called fin biz.com. Now this is a 100% free website. And it's going to allow us to narrow down the market to really just the stocks that meet specific criteria. Now once you're on phi1 BUS, you're gonna wanna go to screener at the top. And we're gonna go ahead and select the tab all. Okay, so now these are all the different things that we can select as our criteria to scan for our specific stocks. Now going back to the slide show, when we're looking for a stock that is potentially up trending. And that is very likely to be a good opportunity to buy is we want that sought to already be performing well. So we wanted to already be up at least 10% for the past month. And really that's just going to tell us that the stock again is performing well. And that it's already potentially in a strong trend that we can buy into and profit from the momentum. So we're gonna go over to performance over here. And we're going to select months plus 10%. And that's going to narrow the stock's down, are ready from it was over 7,600 and now it's only 630. So when you're screening, all you're really doing is narrowing down the market to the stocks that meet your criteria. And that are going to have a higher chance of doing what you're expecting them to do. The next criteria I like to put in is to look for stocks over $10 per share. Now I have preference in parentheses here because if you're somebody who likes to try at higher price or a lower price stocks, you can change that to a different price. For me when I'm swing trading in more specifically when I'm buying, I like to buy into higher price stocks. Because generally speaking, they're going to be representing a more reputable and more well-known company. So I'm gonna go to price and I'm going to select over $10 per share. And that takes our screen results from 603 down to 347. The next thing I want to plug in is the average volume, at least 100 thousand shares. Now the average volume is basically just how many shares on average, the stock trades on a given day. We want that to be at least 100 thousand shares. Because if you're trading a stock with less volume, less than a 100 thousand shares, many times it can be difficult for us to buy and sell at prices that we want to buy and sell. Because there is just such low volume and asked me know if you're buying, there needs to be somebody on the other side to sell to you. And we are selling. There needs to be somebody on the other side to buy. So I'm gonna go again to average volume in select over 100 thousand shares. And then we also want the current volume, which is just the volume for today, to be at least 100 thousand shares as well. Just to show and stocks with screening for are on target or even over what their average daily volume is. So I'm gonna go to current volume and select over 100 thousand shares. As you can see, we're already down to 123 total stocks. And that's just going to get smaller and smaller. And these are a list again of potential stalks that may end up making great opportunities to swing trade. The next thing we want to look for is that the RSI, which is the relative strength index, is not over bought. So we want it to be less than 60. The RSI is just going to tell us when a stock is over oversold and when stocks are over bought, all that means is that they are likely to pull back in the near future. And when they're oversold, that means that they're likely to bounce or head back up in the near future. So because we're looking for stocks that are probably up training and that we may end up buying into. We want to make sure that they're not over bought and that they're gonna continue their move upward when we buy into them. So I'm gonna go to RSI. It's elect not over bought, less than 60. The next thing we want to look for is institutes ownership of at least 20%. This just means that there are institutions interested in stocks that we're looking for, which is going to be another reason for us to want to buy into them because these are multi-billion dollar investment firms. And if they're putting the money into these stocks, then chances are they're gonna make better opportunities for us to get into these stocks as well. I'm just a little side note, as you can see, there are quite a few ads that are popping up because I didn't mentioned this is a 100% free to use. But they do actually have a premium subscription as well. If you're interested in using this without any of the ads. This is such a quick thing and we're really only on here for about ten minutes or so to screening briefly for their stocks were looking for. I'd just like to use the free screener, but I just figured I'd mentioned that because I know the ads can be a little bit annoying when you are using it. And last but not least, the last criteria we're going to put in is for United States companies. So we're gonna go to country intellect USA. Now we narrowed the list down from over 7 thousand different stocks to just eight potential traits. Here what we wanna do is we want to make sure that the stocks were looking to trade or actually in a nice upturned already. So the way we can do that very quickly is by hovering over the price on the right side of the stock. And it's gonna give you a quick look at the daily chart of that stock. And you can see very easily whether or not the stock is in a solid up trend or it gets an a downtrend or just trading sideways. So because we are looking to buy these stocks, we want them to, of course, being an up trend. So right off the bat we can see the first one, AD VM is in a pretty solid up trend. Agn is really not spin trading pretty much sideways. Clf isn't a nice trend. En ph is in a nice lectern as well. Fs, y is a little bit up trending over the past month or so, but not as strong as the other ones have been. So we'd probably avoid that one. The same thing with IM and you. Ses is in a nice upturn. In WW is in a pretty solid up trend as well. So what I'd like to do when I'm looking for the best stocks that trade is I'll go through these and don't just look for the ones that aren't solid up trend. And then I'll put those into my notes. So that way we just narrowed our list of eight stocks really down to just four or five that are going to be the best opportunities for us to swing trade. And from there we'll move on to doing some more analysis, which we're gonna talk about in the next section of this class. Alright, so now that we've covered the stocks that are likely to be up trending and that are probably going to make good opportunities to buy into. I also want to show you the other side of the spectrum and show you how you can screen for stocks that are down trending. And that are probably going to be very good opportunities to short sell. Alright, so for a lot of these, all we really have to do is kind of switch. And the criteria. For example, when we're looking for up turning stocks, we're looking for the performance for the last month to be at least 10%. However, when we are looking for down trading stocks, we just want that to be at least minus 10%. So I'm going to change that to month minus 10%. When I'm looking for down trading stocks that I'd like to short sell. I personally prefer them to be below $20 per share. Just going back to what I mentioned earlier, generally higher price stocks are going to be representing more reputable, well-known companies. So when I'm looking for down trading stocks, I actually prefer the companies to be less reputable in less financially stable, which would of course equate to having a lower price stock. So I'm gonna select below or under $20 per share average volume. We still want it to be at least 100 thousand shares, as well as the current volume. Now for the RSI, we want it to be not oversold, meaning that it's over 40. For our institutional ownership, we want this to be below 20 in this case instead of above 20. Again, because if we're short selling, it's better for us that little or no institutions are actually buying into the stock itself. Because if they are buying into that stock, that shows that they believe in the company. And if they have billions and billions of dollars and they believe in the company, that's probably not something that you want to fight against by short selling stock. And we're going to keep the country at the United States of America. So now you can see we have just three stocks that may end up being good opportunities to short sell. And we're gonna do the exact same thing we did with the up trading stocks. And we're just going to hover over price and look to see if these stocks are in a downtrend or not. And really all three of them seem to be in a downtrend, meaning that all three of these could be good potential candidates to short-sell. And again, the next step would be to keep track of which stocks are in a downtrend in we'll use them to analyze in the next section of the class, which is analyzing your stocks. 6. Analyzing Your Stocks: Alright, so now that we know how to narrow down the list of thousands and thousands of shares that we could potentially be trading down to just a few potential candidates to take a swing trade position. In. The next step is going to be to analyze these socks to find the very best, and to avoid trading ones that are going to be more likely for us to take a loss on. So the first step in analyzing our stocks is going to be to actually look into the SEC filings of the company itself. Now when you go into the SEC filings, you're going to see tons of different things that you can be looking for. And then you can scan through to get a good idea of what the company is doing and how they're doing in terms of their financials, such as their revenue, their earnings per share, their total number of outstanding shares, and so on and so forth. But what I mostly want to focus on as a swing trader is going to be to look for red flags. And the key red flag that we want to look for is potential dilution. So for those of you who don't know about dilution, I'm not gonna go into full detail here in this class, but I do want to mention and give you a brief understanding of what it is. Solution is essentially something that probably 99 times out of a 100 is going to cause the stock price to go down. And essentially many times what we see as a type of dilution is where the company, we'll just make up their own shares out of thin air to sell into the market. So because we know that the market is supply and demand, the company that's creating all these extra shares is going to then be able to sell them into the market, creating a much larger supply. Then there is a demand for and that's going to generally cause the stock price to go down. So that's why we always wanna make sure we look for any kind of dilution before we get into a potential swing trade. So what I recommend doing to look for any dilution is to go to bam SEC.com. And then we're going to look under the section that's called Perspective says in registrations. Now it may sound a little bit complex, but we're gonna be looking for the file types that are titled as 4000 for B5 and S3. These are gonna be key file types that we see when we're looking for dilution. So we have been SEC pulled up here. I'm gonna go ahead and search a penny stock or a small cap stocks. And we're going to start to look for some 4.2.4 B5 or any S3 firings. So this is actually because company, instead of S3, they have F3. But S3 and F3 are both the exact same things. And that's a type of file that's going to allow the company to dilute shares in the future. So when you see S3 or F3, just know that that company is potentially planning on doing some kind of dilution in the near future. Which again, can be a big red flag if you're planning on buying into that company. And then 4.2.4 B5 are a type of filing that the company puts out when they actually are doing dilution currently. So if they have a primary offering or a secondary offering, that's the type of filing that they're going to release to the public, letting the public know that they are diluting shares. So really those are the two things that we want to look for when we're searching through bam scc.com, just look for any kind of dilution to know whether or not the company is diluting. And in this case, the company does have delusion because we see here there are four to four B5 filings and there are several F3 violence as well. So if I were to see this after going through and screening for a list of stocks, even if it meets all the criteria on my screener, on phi1 biz.com. If I come here and I see that there's dilution. Dilution is going to outweigh those things that we have put into the screener. And at the end of the day, this is probably going to be a stock that we want to avoid taking a trade in. So going back over here to presentation. As already mentioned again, dilution is a big red flag. So if you do see that the company is diluting your planning on buying, that's going to be best to just avoid buying stock. However, you do see that there is dilution and maybe it's a stock that you're planning on short-selling because it's already in a downtrend, then dilution can actually work in your favor in that case. Because as we know, we profit from our short positions as the stock price goes down. And we know also that dilution generally causes stocks go down further. We can then use that dilution in our favor to profit from the stock moving down. The very next thing we wanna do after going through the SEC filings and briefly looking for any kind of dilution is to actually check the company for any upcoming catalysts that we know of. So a catalyst is simply something such as earnings reports, trial results, or any kind of major presentation that the company has planned. And really a catalyst is any kind of news or press release that can have a significant impact on the stock's price. So unfortunately many times catalysts are unpredictable and we don't know when they're coming. They can be, you know, what's the market is already closed or they can be midday even. But luckily for us, many times, major catalysts again, such as earnings reports or trial results, are planned in advance and we actually are able to see when they're going to release those earnings reports or those results in order for us to prepare how they may potentially affect the stock's price. So really my recommendation is to avoid holding through any known catalyst because realistically they're very unpredictable. And again, they can have a very major impact on the stock's price. So for example, if we know that the company is planning on releasing their earnings report on February tenth, 2019. And let's say the current date is January 27th, 2019. We know that we have a few weeks to potentially swing trade that stock. But at the end of the day, we just wanna make sure that we exit that position before February tenth. Because even if the company has had a strong earnings report in the past, their future earnings and how the company performed in the last quarter or in the last year. Our realistically still very unpredictable. And there's no way for us to tell whether or not they're going to be positive. And by then holding through these earnings, it's actually gonna make our trading become much more gambling than it has actual trading. So we want to try to take that unknown aspect out of the trading in, simply lock in our profits or get out of the trade in general. Before we have to deal with that on predictability. And last but not least, before we're gonna get into our positions, we still have a little bit of technical analysis that we're going to want to do to make sure we find the best entry price for our positions. So it's very important to wait until you've done all the previous mentioned steps, which are of course, screening for the best stalks on phi1 viz. Checking the charts to see if the stock is noon or down trending, checking for any dilution in the SEC filings, which again can be found on Bam SEC.com. And then of course, looking for any upcoming catalysts that we know of. Then once you do all that again, we're going to do some basic technical analysis to find the best price to buy or to short sell that stock. Because we don't want to simply just buy-in at any price. Once we've done all these previous things, we still want to have the best price that we possibly can for our position. And that's exactly where we're going to get into in the next section of this class. So make sure you stay tuned and let's go ahead and get started with that. 7. When to Enter Your Positions: All right, so at this point you should be just about ready to actually buy into or short into your positions. The next step is going to be to use some very basic technical analysis to get the best prices for our position. Because even if the stock meets all of our criteria on the find_by scanner, even if they have no dilution, there's no upcoming analyst electric effect that stock price. And even if they're trending perfectly in the direction that we want them to be. Still very important that we get stuck at the best price that we possibly can to avoid taking any unnecessary losses. So to do some basic technical analysis, we're going to use three main things. We're gonna use sport resistance in ten months. Now a trend line is going to be drawn either over the pivot eyes or under the pivot loaves to show the prevailing direction of price. As I mentioned earlier in the class, stock that is up training is going to have a trend line drawn below the pivot lows. In a stock that is downtrend, it's going to have a trend line drawn above pivot eyes. Now when your trend line is below the lows and an up trend, that's going to be a level of support. And it's going to be where you're going to look to buy your shares. In a downtrend, your trend line drawn over the pivot highs is going to be a level of resistance. It is going to be what you want to use to find your entry when you're short selling. Now I know it may sound too good to be true in two simple, but believe it or not, when you've done all your previous analysis and research, a stock that is up and running is likely to bounce back up off of its trend lines support. In a stock that is down trending is likely to bounce off of bits, overhead trim non-resistance, and come back down. So we can use these very simple trend lines to actually make the best entries for our overall traits. 8. When to Exit Your Positions: Now once you have an entry price in mind, the next step is knowing when you're going to like the cut your losses and when you're going to likely lock in your profits once you actually get into a position. So to know these two points again, you're going to use some basic technical analysis, but you're going to want to have a full trade plan before you even enter into the tree. That trade plan is going to consist of two main points. Again, it's going to be a reward in your risk price, which is where you're gonna take profits if the trade happens to move in your favor. And we're going to cut losses if the trader moves against you. Define these two levels. We are going to be using our trend line resistance in trend lines support levels. So if we're looking at a stock that is up trending like the one in need sample below. This is of course, a stock that we're going to be interested in buying. One very important thing about support and resistance is that stocks breaking below support are likely to continue down until they form a new level of support. Meanwhile, stocks breaking above resistance are likely to continue upward. And so they form a new level of resistance. So if you're buying a stock at support and it happens to break below that level, or it's very important that you cut losses quickly to avoid holding all the way down and still the stock finds new support. Because we don't know necessarily That's going to be formed at any could be a much larger loss than we expect to take on the trait. So in this example, we're going to use our trend line support. Again, that's an opportunity to buy. And then we're either going to cut losses just below that support level or just below the nearest level of resistance. Whichever one happens first is Where are we going to get out of? The most important part of this is that you're going to have these two fluxes in mind before you even get into the train. And by doing that, it takes a lot of the unknown out of your trading. So you don't necessarily know, of course, whether or not it's going to be a profit. But you do know exactly how much you stand to make and how much you stand to lose, regardless of which direction the trade happens to MOOC entity. Stay tuned for the next section when I show you how to set up your trading account and set up your trading platform. I'm going to show you how you can use a specific order type to show you how you can have two orders ready to exit at the exact same time, whether it be a profit or a loss in whichever one hits first and the other one is going to automatically be cancelled. So make sure to stay tuned and go through that section of the class as well. Now again, on the opposite side of the spectrum. If we are looking to short sell a stock instead of by, we're going to be using our trend line resistance to get our entry price. And as I mentioned, stocks breaking a resistance are likely to continue higher until new resistance is formed. So since in a short position we lose money as a stock goes higher, we wanna make sure to cut losses quickly. If the stock happens to break above resistance after we get into our short position, if the trade, however, does move in our favor, we would want to take our profits in cover position at the nearest level of support. And again, you can actually use a specific type of order to have both of these exit orders placed at the exact same time. In whichever one hits first will actually cancel the other one out. By having this, you simply wait for your exit to hit. And you don't have to constantly manager position. You just have to worry about getting in and you're having your exit prices in mind before you get into the trigger. 9. Live Examples & Analysis: All right, so now that we've covered all the basics of swing trading, we talked about how you can find, analyze, trade the best stocks to swim trader. I wanted to just give a few examples here and go through all the steps together at once. Just to give you a better understanding of how you can get started with your own swing trading. So I'm going to be looking for up trending stocks. Then I'm gonna potentially keep buying into it. So first and foremost, we want the monthly percentage to be at least 10%. We want the price to be over $10 per share. We want the average volume in the current volume to be at least 100 thousand shares. The RSI should be below 60, meaning it's not over bought. And we want the institutional ownership to be over 20%. Once we have all that, we can come down to our screen results. And I just want to look for some socks that are in a nice solid up trend and see which ones I want to move forward width. So for me I really like the AP trend, Iran EN ph. It's been a very smooth, solid upfront. So I think this is the one I'm gonna go ahead and move forward to the next step width into start analyzing and potentially. So the next step is going to be to look into the SEC filings. So we wanna go to BAM SEC.com and look to see if there's any delusion that we should be worried about. If there is because this is a stock that we're looking to buy, any dilution is gonna be a big red flag. And we're probably just going to want to avoid it entirely if there is any dilution. So I'm going to be an SEC.com. I'm going to type in the symbol, which was EN ph. And we want to look under perspective in registrations. So right off the bat I can see that there is a few S 3s which our shelf registrations, meaning that the company is able to dilute shares in the near future if they plan on doing so or if they need to do so. And we also have some 4.2.4 B3 filings which show that there is actually some dilution, which is kind of surprising to me because there is again, a very nice solid upfront in stock. But again, because there is solution a lot of time solution can heavily outweigh the charts and patterns. So if they decide that they want to start selling these shares and diluting, that upturned can reverse to downtrend. So I'm actually gonna go ahead and avoid EN ph and just go ahead down the list in, check out some other stocks. So I'm gonna go next to CLF, which isn't a nice option as well. You can see a lot of higher highs and lows. And I'm now going to surge CLF dam as a c.com. And you can see that there is 1424, b3, But this is from about a year and a half ago. So for me that is a long enough time for dilution to have been done and to stop effecting the stock price. So if I see that its well over a year ago, more often than not, as long as it meets all. The criteria that I'm looking for, I would probably go ahead and move forward with our analysis in potentially take the trader. So now the next step is going to be we want to look for any upcoming earnings or trial results or major presentations and so on and so forth that may affect the stock price significantly. So one way that I like to do that is to go to Yahoo Finance. And we're just going to search in the symbol CLF. And we're just going to scroll down to the news and press releases at the bottom of the page and look for any announcements of upcoming earnings or any upcoming presentations or trial results or any major catalysts that again, may affect the stock price significantly. So they recently put out an earnings conference fall transcript, which is actually a great sign because that tells us that they recently announced their earnings. So we don't have to worry about that upcoming in the near future. And just briefly scrolling through, I don't see them announcing any major upcoming catalysts. So for me I would go ahead and move on again to the next step of our analysis, which is going to be to use some basic technical analysis and actually look at the charts and see where we would want to buy and where we want to sell this particular stock. So if you don't have a brokerage account already, I just want to go ahead and show you how you can do this without having a platform setup. So you can just go to stock charts.com. This is free to use by the way, and you would just simply type in soccer you looking for CLS. And you can get some nice high quality charts that you can actually draw trend lines and everything else on as well. So for my range, because we can see that the trend started right at the beginning of June. I'm gonna change this from filled the chart to just three months and then a min hit update. So that way we can focus a little bit more on just the UPC training part of the chart. In the next step we want to do is click on annotate. And I just wanted to draw this trend line that I've see by connecting the lows. So that is the trend line support that we would use to potentially buy into this stock. Now I also see a pretty clear line of resistance above. Oedipus is trading in nice channel. So what I would do if I was going to buy this stock is I would use the overhead resistance as well as a level 2l into. So for me I would probably looked at by right into 1075 area because that's right about where this trend lines ports at. And I would look to sell up near 1150 or even $12 per share. The stock was going to break below this trend lines support, then I would cut losses quickly, probably about $10.50 per share. So in this case, because I'd be buying at $10.75 in risking down to 1050, my risk can be twenty-five cents per share. And because my profit target would be all the way up at $11.50, which is $0.75 above my 1075 entry. That would be a very nice three-to-one reward to risk. Because my reward would be $0.75 and my risk would be just twenty-five cents. So that would be a good trade plan going into this and now would be how I would use some very basic technical analysis to find where I would want to buy and where I would like me want to sell. Whether their trade moves in my favor or if it works against me. Alright, now going back to thin BUS, just wanna do the exact same thing. But show you stocks that are down trending. And how are we potentially analyzed net to open a short sale position? Or if we have our list, we only have five stocks that popped up for our downtrend in criteria. Next, we just want to look for a nice solid downtrend on the daily chart and see which one we want to move forward with when doing our analysis. So I like to downtrend, see here with M BIO a few months back in May and see that the stock will go all the way up in the $6 or even $7 area. And now it's trading right at about $3.20 in still looks to be down trending nicely. So what I would do next is I would go over to ban SEC.com, look for any dilution in because we are looking at downtrend socks that we want to short sell. Again, it's actually going to be a great benefit if we do see some dilution. So seeing these 4.2.4 B5 filings, as well as these S3 filings in this case is going to be great. And we see plenty of those. So from there I will just go ahead and go to Yahoo Finance again. Just to make sure there's not any upcoming catalysts that we want to be aware of. All right. So now that we know that there's no major earnings reports or trial results or anything that's going to have a major impact on the stock's price being released in the near future. The next step is going to go back to our stock charts over here, search the stock we're looking for, and do some technical analysis. So I'm gonna click back on annotate here. In realistically I see two main overhead trend line resistance levels that I would probably be using. The first is going to be up here connecting these two highs. As you can see, it hits right there, in right there. And that's a little bit higher up in this one is going to be shorter term in more steep of a downtrend. So personally, I like to use the main overall trend, which is generally the longer trend line. So I would probably be using this one up here. It's actually look for my short sale entry. And I would look to short rate around $3.60 to $3.70. And then my area that I've been looking to cover my position at a profit would probably down into this here because you can see that this is starting to form some support. Reading the low $3 area from about 310 to 320. So again, I'd be shorting at about $3.70. Ideally, if it does bounce back up to that price, my stop-loss would be about $0.20 per share. Meaning that if the stock price gone up to $3.90 are probably just cut losses in wafer. A better entry to short. And my profit target would be down at about $3 in $0.20. So I would be risking $0.20 per share to make $0.50 per share. Which again would be another great reward to risk ratio. And this would be another great potential trade opportunity. Alright, so I hope those examples helped and showed you how quickly you can do some very basic analysis and find these potential socks, the trade. If you feel you're ready to actually get started with your own trading. In the next section is going to show you exactly how you can get started opening your trading account and setting up the platform itself. So make sure you stay tuned for that. And I'll see you in the next lesson. 10. Risk-Free Trading Practice: Alright, now at this point you should have a good understanding of the trading or invest in style and strategy that you plan on using When you start trading or investing with your real money, any a real live account. But before putting your hard-earned money at risk, most people would of course, want to practice in some way, shape, or form. And a very common way to do that with the stock market is by doing what is known as paper trading. Paper trading is essentially just trading with fake or virtual money in order to practice and test different strategies without of course, putting any of your own money at risk yet. So I just wanted to briefly make this video to show you how you can start paper trading for 100% free. And the way to do that is by going onto thinkorswim, which is the platform that comes with your brokerage account with TD Ameritrade. And it's actually a 100% free to use. And once you open an account with them, you don't even need to fund your account yet in order to use the platform in order to actually start paper trading. So once you click on the application, which is going to look like this down here, this is the box that's going to pop up. And in order to log in to actually start trading live with real money, you would want to have this selected on the left side here for live trading. And then simply put in your username and password and go ahead and login. But for this example, I just wanted to show you how you can briefly start paper trading. So you wanna make sure that this is selected over on the right side for paper money. And then from there again, you're just going to want to log into the account and it's going to pull up the platform to start paper trading. Alright, so once you're logged in, the application is going to pull up your workspace. And if it's your first time going onto the application, here's me look a little bit different than mine does at the moment. And the reason for that is because mine is already set up in I've already used this platform on multiple different occasions. So if it's your first time, I recommend going back to the section of the class that is titled setting up your trading platform. And it's going to show you how to set up and use all the different tools and features within the thinkorswim platform itself. But if we go ahead and look at the top up here, you can actually see what our buying power, and that's the amount of money that they give you, which is of course fake money to actually start practicing your trading are the best thing. So if we wanted to go over and look at stock CTRL, you can see right here we have deep five-day, five-minute chart. And then down here I'm gonna go ahead and select you one day, one minute, just for a shorter timeframe. In order to trade this, we're going to use the active trader over here. And we would simply treat this the same way that we would if there was with real money. And that's actually a very important aspect of paper trading. Because when you're trading with fake money or virtual money, you're not going to be nearly as emotionally involved as you would be when you're trading with real live money. So in order to get the most out of your paper trading, It's very important that you think of the paper money as real money and treat it the same way that you would if you were trading with a live account. Okay. But in order to buy this, what we would do is we could of course just buy at the market and that's gonna get us into the stock immediately at the current market prices. However, if we wanted to use a limit order, we would simply make sure we have the amount of shares that we wanted to buy selected. Let's say we wanted to change this to 5,700. And then all you do is simply go down here to the act of Trader box and hover over the price that you want to buy out. And then once you find it, you would just click on it and go ahead and click on the confirmation box. So if we were looking at this. And we see that there is kind of a level of support that's forming in the 295 to $3 level. And let's say we wanted to use that as our opportunity to buy into the stock. We could go ahead and place an order to buy, maybe at $3.02. We would just hover over Rio to click on that. Here's the order confirmation that's going to pop up. And from there, all you do is click send. The order looks to be exactly how you want to be. And then once that order is sent, it's going to treat it exactly as it would if it was a real position. You're going to be able to buy into the sock. And then once you have your position filled, you can then sell out of the stock or place your order to sell the right side of the active trader. And let's say we wanted to sell. If you're at 310, you would just click on 310, send that order and wait for your position to get filled so you could walk in your profits. Alright, so on the other side of the spectrum then, as we know, you can of course, short-sell also, which is a way to profit from the stock going down into short cell, you have to of course, sell shares first before even owning them. And the way that we do that is by borrowing shares from our broker. So if we place that order to sell first before we even have a physician, we can then later on buy back those shares, ideally at a lower price and profit. The difference between where we sold short and where we bought the cover multiplied by the amount of shares that we traded. So if we were looking at this chart and we see that right here in the 325 to 330 area, there is a little bit of resistance forming. We could use that as an opportunity to short sell if the stock did spike up into that resistance. So let's say we wanted to sell at $3.24. We would just click there on the right side, of course. And then go ahead and again, quick sand once the order confirmation pops up. And as you can see in this example, this talk is actually not available to be sold short. And that does happen every once in a while with penny stocks, especially because you do have to borrow them from your broker. And they're not always going to be available to be sold short. However, one thing I do want to point out though, is regardless of if you're buying or selling, if you're somebody who wants to get in and out immediately and you're trying to trade very quickly. Then you may want to have this box select here, and this is the auto sandbox. So if we have that selected once we place an order to buy, sell, short sell, or even cover, it's going to immediately place that order rather than having that confirmation box pop up. So right now you can see we still have our order set for 5 thousand shares to be sold at $3.10. And now would close out our position that we bought earlier in this example. And if we went ahead and click the exon that to cancel that order. And using the auto send option, if we clicked back on 310, you can see that that order immediately pops back up without the confirmation box popping up as well. Okay, so I hope this helped you to understand how you can actually practice your trading or investing before putting any money at risk. It's definitely something that I recommend doing for a little while before you dive into the market. And if you're somebody that's brand new to trading or investing, it can be a great way to get a feel for the market and how stocks fluctuate. And of course, using the thinkorswim platform here with TD Ameritrade is again a 100% free, so I do recommend using them to actually start doing so.