Wednesday, March 30, 2011

Swing Trading and Short-Term Trading

Are you left or right brained?

I get it. There are tons of different investing styles. We all use different ways to find the stock we want to trade in; However, once we have an idea, we should go into action.

If your a short-term trader or use swing trading techniques, what  is your action plan?

This is not just for the "left brain" inclined. I'm calling out to more than just the technical analysis, black box model, chartist or "quant" guys. Although, I do want to hear from you, too. What about the class of subjective probability traders? The active value investors that have good trading skills with their unique course of action. Or those that follow lists. Again, I could go on and on.

Once you have done your homework, and mustered your courage....

What metric do you use to enter and exit the market? What prompts you to take action? What will trigger your exit strategy? How much attention is required? What are your rules? What are your exceptions? How do you assess risk & reward? Calculate position size? Estimate liquidity and volume? What is the total drawdown percentage? How many transactions are active at one time? What trading platform do you use? What asset classes do you prefer?  Do you hedge your overall plan? How do you evaluate when a stock is not responding/trading to your plan? What is your time-frame and what do you use to monitor progress? How frequently?

I want to hear from everybody. Please share your rules and guidelines. Thanks!


  1. I'm both a buy-and-holder and a mid-short term trader. My sell rules are strict: only when another action is warranted, not based on share price. I do not like a position to be liquidated merely because the market has swooned 15%; if I have a position, it generally means that I intend to hold until a 5-10 bagger can be realized. I bought WSFL.PK 7 yrs ago and accumulated on way down; it is only now showing signs of life. Conversely, a contrarian view of silver gripped me recently, so I bought ZSL, held it from 26 to 27, lost my zeal to ride it down, and sold before it continued it's downward 2x-inverse-price-of-silver plunge. I do expect, however, silver to reverse it's suborbital rise soon, as investors reposition themselves for equity bull movements.

  2. :-) so... did my sale of ZSL violate my own sell rule to not sell based on price? No, because decision to sell was partially based on desire to move more into what has become a 3-bagger on its way to the 5-10 range, LSCG.OB.