Harry's Paradise

Swing trading

Swing trading is when an investor/trader is invested in a stock for not less than 1 day and not more than 15 days, and I am a swing trader. Few reasons why I got hooked to swing trading is because it works for me, as I am a part time trader it only requires not more than 30 minutes a day to run an explorer on a stock analysis software, analyse the stocks and make my pick, I do admit that its high risk but with good returns and risk management skills is a must.

I execute two trading setups of my own, I designed it after an awful lot of bad experiences and reading few good trading books from the finest stock traders. I would like to share one of those setups which is very simple but would not disclose the second one for now and will put it on when I find a better one and stop using it.

Setup 1 : PUS means Perk Up Stochastic

I name it this way because in this setup we use Stochastic in combination with a moving average to perk up the stochastic and make it more efficient.
I assume the reader is already aware of the two trading indicators called moving average and stochastic, if not please google it learn and then return to this article.

In order to use this setup all you need to do is add a stochastic indicator and a five day simple moving average and then follow the steps to enter and exit.
Entry :- Buy the stock when the moving average started to turn positive from negative and the stochastic has given a buy.
Sell :- Sell the stock when the moving average started to turn negative from positive and the stochastic has given a sell signal.
Stop Loss :- You don't need a stop loss as the exit signal is sufficient to avoid risk and heavy losses, but make sure you don't fall prey to greed or fear and stick to the entry and exit rules.

This is a sample of a live stock if traded using 'PUS' setup.



As you can see the markings in the stock chart above. the green arrow shows you an entry signal that has occurred and one would enter at Rs 155 in last week of June and exit at Rs 170 in the Last week of July. That would be a cool10% profit in 30 days.