Swing Trade Signals
Use these tradings signals to consider potential Swing trades either at the next open or same day. The signals are indicators of probable moves within the current or next trading day.
Swing trades are designed to last typically from 2 to 20 trading days. Unlike Buy and Hold strategies; you only keep your money working when there is price movement. Consider selling some or all of your position once you make 3% or more. Always keep a Sell Stop order to protect your initial capital. Remember that market conditions such as price GAPs and flash crash events can make it more challenging to execute this strategy.
Risk Management Orders
When long on a stock set a Buy Stop-limit DAY order to buy at a higher price than the current or last close price. This insures you buy when the movement is in your favor. Do not wait for a ‘better’ or lower price if your intention is to treat the trade as a ‘swing’ trade.Buying at a lower price is more consistent with an investment or speculative thesis.
If your stock is bought at the stop-limit price immediately set a stop-loss order (also known as a market-stop order). You may use the suggested Stocksaurus stop-loss price which usually ranges between 1.5 and 2% of the purchase price and is determined, in part, by near term price variance. This will reduce the likelihood of significant losses due to unexpected events with the company, stock or market. However; stop-loss orders will not protect you from gaps in price since the stock may never trade at the specified stop-loss stop price or above the stop-loss limit price. Your 'Sell Stop-Limit' is composed of two prices; the 'Stop' Price and the 'Limit' price. The Sell' 'Stop' price is the price at which your order becomes a market order and the 'Sell Limit' price is the minimum price you want to sell at. Although you may set these two prices to be equal; it may be prudent to move the 'Sell Limit' price just below the 'Sell' Stop' price so that the sell order has some trading range wiggle room above the 'Sell Limit' price to execute after the 'Sell Stop' price is reached.
If your stock reaches the ‘break-even’ price raise your stop-loss order to equal your purchase price. You should not dwell about the lost commission cost as this is the cost of doing business. Your commissions should be less than .5% of your trading amount. For example a $10 commission on a $10,000 trade is 0.1%.
Move your stop-loss up as you see fit but in swing trading you should protect gains in excess of 3% by selling from 50% to 100% of your position. Do not wait for Stocksaurus to suggest when to sell your stock alone; you should use a stop-loss to protect your original capital and gains in excess of 3%.
A Market Order is an order to buy or sell a security at the best price in the current market. Market orders are generally good for the day only and are used when you would like an immediate execution. One important thing to remember is that the last-traded price is not necessarily the price at which the market order will be executed. In fast moving and volatile markets, the price at which you actually execute (or fill) the trade can deviate from the last-traded price. The price will remain the same only when the bid and ask prices are exactly at the last-traded price.
AVOID USING A MARKET ORDER TO BUY. YOU HAVE LESS CONTROL OF YOUR PURCHASE PRICE WITH A MARKET ORDER. For example: A next day market order could purchase your stock after a gap in price.
A Buy Limit Order states the maximum price at which you want to buy (usually at or below current market prices). When you select Limit Order, you must also specify a Limit Price. Orders placed too far from the current market price may not be executed.
A Sell Limit Order states the minimum price at which you want to sell (usually at or above current market prices). When you select Limit Order, you must also specify a Limit Price. Orders placed too far from the current market price may not be executed.
A Stop Order is an order to buy or sell a stock when the stock reaches a specified price, which is known as a stop price. When the specified price is reached, the stop order becomes a market order. You can issue a Stop Order to to buy or sell a security once the offer or bid reaches a predetermined price, usually called the 'Stop Price'. Sell Stop Orders are triggered by the bid, Buy Stop Orders are triggered by the offer. Stop Orders are entered below the current price if you are selling and above the current price if you are buying. For example, if you owned a stock currently trading at $35 a share that you fear might drop in price, you could issue a Stop Order to sell if the price dropped to $30 a share.Note:
Once the Stop Price is reached, your order becomes a Market Order. If the price dropped very quickly, and other orders had been placed before yours, the stock could actually end up selling for less than $30. You can give a Stop Order as a Day Order or as a good-till-canceled (GTC) Order.Stop orders are different from limit orders in that a buy stop order is placed above the current market price, and a buy limit order is placed below the current market price. A sell stop order is placed below the current market price, and a sell limit order is placed above the current market price.
A Stop-Limit Order is used when buying stock in response to a buy signal. The suggested Stop-Limit buy price will be in the anticipated direction of price movement. When entering a Stop-Limit Order, both a Limit Price and Stop Price need to be entered. Although they do not have to be the same price set both to equal the suggested Stocksaurus Buy Stop-Limit price.
A Sell Stop Order is used by investors and traders long a stock to protect an existing profit or avoid further losses if the stock price drops. A stop order to sell must be placed below the current market price.
A Buy Stop Order is used by investors and traders to short a stock to protect a profit or limit a loss if the stock price increases. Remember, a stop order to buy must be entered at a price above the current market price and a sell stop order must be entered at a price below the current market price.
Notes:Buy Limit, Sell Stop and Sell Stop-Limit orders are orders entered below the current market. Sell Stop and Sell Stop-Limit Orders are typically used to limit a loss or to protect a profit on a long position.
Sell Limit, Buy Stop-Limit and Buy Stop orders are orders entered above the current market. Buy Stop-Limit and Buy Stop Orders are typically used to limit the loss or to protect a profit on a short position.
Always use a Stop-Limit Order on Entry. This will prevent a purchase should the price gap away from the open price before your order is executed.Always use a Stop-Market Order on Exit. This is also known as a Stop-Loss order. You may also use a Trailing Stop order if it is available to you.