You can learn how to buy stocks that are moving upward and start timing your sales to get out before they drop back down in price.
If you are new to swing trading, the best way you can help yourself learn quickly is by picking the right stocks to buy in the first place. Find stocks that are relatively calm. Don't look for huge moves. You should look for stocks that are trending slightly up or down without much drama. You are trying to make a living instead of making a killing.
You can draw an approximate line across these low points. That is the lower trend line. Every time the stock hits that line, it goes back up. What makes this stock especially good to start with is that the bottom trend line is already drawn for you. This is the bottom trend line for this particular stock at this time. Similarly, you can draw a trend line across the highs the stock hits. When Facebook reaches that upper trend line, it tends to drop back down to its bottom trend line.
Note that these trend lines are approximate. You have to get the knack for knowing when the stock price is about to turn, rather than count on a strict adherence to the trend lines you have drawn. In the case of Facebook, it had a recent breakout that went above the upper trend line. Ignore that surge and draw your upper trend line using the other peaks in the chart. Approximately 17 million shares are bought and sold daily, so it is easy for you to find buyers and sellers.
The upper trend line is also a bit ragged, so this stock will be a good one to learn the feel for when the stock is going to rise and fall. Still, the stock is trending regularly enough that you can count on it to continue its pattern for a while and learn to time your buy and sell points regularly. Draw a line across the highs to determine the approximate value at which you should sell. Note that the longer trend line, the more likely it is that the line is accurate.
The stock of Apple Inc. The stock is trending upward, but it has formed new trend lines since mid-November This is a good lesson in trend lines: The stock has dropped below its day moving average. It has recovered from that drop. It may be forming a new bottom trend line. This is a good stock for learning how to trade the news. Watch for those announcements and see how the stock responds.
This will add an extra element to your swing trading. To start swing trading, make it easier for yourself by choosing companies that consistently show an established pattern. Begin making your predictions about the peaks and valleys, and you will start to get into the swing for swing trading.
Dictionary Term Of The Day. A conflict of interest inherent in any relationship where one party is expected to Broker Reviews Find the best broker for your trading or investing needs See Reviews.
Sophisticated content for financial advisors around investment strategies, industry trends, and advisor education. A celebration of the most influential advisors and their contributions to critical conversations on finance.
Become a day trader. The Bottom Line To start swing trading, make it easier for yourself by choosing companies that consistently show an established pattern. No thanks, I prefer not making money. Get Free Newsletters Newsletters.More...