Topic
Swing trading
Trades held for days to weeks: which stocks lead, which pullbacks are worth buying, and how to test a swing method before it touches real money.
A swing trade is short enough that one bad week decides it and long enough to sit through weekends, earnings dates and sector moves. The stock you pick matters, and so does the group it belongs to.
Relative strength, sector rotation and volume behavior on pullbacks come first; testing a method on data it has never seen comes last, because a rule that only worked on the years used to build it has not been tested at all.
Viewpoints
All viewpoints →-
House rules
A Pullback on Low Volume Is the Only Kind Worth BuyingBuy a post-breakout pullback only when volume runs below its average; heavy volume on the way down is selling, and the stop goes under the breakout.
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The case
Out-of-Sample Testing Is the Only Part of a Backtest That CountsJudge a trading method only on data held back from tuning; the in-sample result mostly measures how well you fitted the past.
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The case
Swing Trade the Leading Stock in the Leading SectorFor trades held days to weeks, pick the strongest stock in the strongest group; the laggard's discount is usually information, and the tailwind matters most.
Walkthroughs
All walkthroughs →Dictionary
Full dictionary →- Distribution day
A trading session in which a major stock index closes lower on higher volume than the session before, read by traders as a sign of institutional selling.
- Relative strength line
A line on a price chart made by dividing a stock's price by an index level each day, so its slope shows whether the stock is doing better or worse than the index.
Courses, practice and tools
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Free course · Intermediate
Musical Chairs for Sectors: Following Market LeadershipSwing traders and active investors who pick individual stocks and want to choose which part of the market to hunt in first.
Lessons with a quiz at the end of each
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Game · Intermediate
Grade the Decision: A Stock Trading Practice GameWhether you can choose an entry, a stop and a share count that fit a swing setup and a written risk rule, and judge a trade apart from its result.