Today, we're going to talk about...
What did I say we're going to talk about today?
Swing trading stocks for
beginners.
That's what we're going to talk about today.
[MUSIC]
Swing trading stocks for beginners.
What exactly do you need to do?
Now first of all, there's a huge difference
between trading
and the "buy
and hold" approach.
When trading, you have a proven
system and when swing trading,
you're typically holding a stock
for 5 to 20 days so
you have a rather short term horizon.
Now on the other hand,
when you're following a "buy
and hold" approach,
you often hold a stock for a
month, years
or in the case of Warren
Buffett, maybe even for decades.
Not so with swing trading stocks.
Again, swing trading stocks,
a short term approach,
following a proven system.
But when I say "proven system",
what do I mean by this?
Well, there's 3 things
that you need to know.
First of all,
when swing trading stocks,
you need to know what stocks to trade.
Second, you need to know exactly
when to enter.
And third of all,
you need to know when to exit
and when exiting, there's always two ways.
It's either - if the trade goes against
you, exiting with a loss
and you want to keep your losses small.
And if the trade does move in the right direction,
it's exiting
with a profit.
So these are the 3 main things.
What stocks trade. When To enter.
When to exit.
So let's talk about what stocks
to trade.
Most people think when trading stocks
they should trade one of these 'mainstream'
stocks and what do I mean by this?
For example, Tesla or
Facebook.
Netflix. Twitter.
That's actually not very smart.
And I'm going to show you right now why
that is. So, let's take a look at,
for example, Tesla.
Look at this.
This stock is moving all
over the place. What do I mean by this?
I mean, it goes from 240
up to 360.
Down to 250 again,
up to 380.
I mean, it's crazy
and here's why. Tesla
and Elon Musk are in the news
all the time.
I mean, Elon Musk is tweeting stuff
like crazy.
You remember last year
in 2018,
he tweeted that he's taking this company
private.
"I'm done with this.
I'm taking it private." This is what he said.
He said I'm taking it private at a price of
360
and you see overnight,
Tesla jumped like crazy,
all the way up here.
Then the S.E.C. said,
"you can't do this"
and the S.E.C. started an investigation.
After a while, they settled
with him.
But when they started an investigation,
Tesla was plummeting.
Then they settled
and everything seemed to be good.
But then of course, Elon Musk tweets
"the S.E.C...
They are..." Whatever.
So, he was publicly bashing
them. And of course this is not
what the S.E.C. likes
and also not investors.
They're getting nervous by this
and Tesla made these lows.
Then they announced that there's production
difficulties.
So, there's something going on in
the news all the time
and this is why it is jumping
up and down like crazy.
Compare this to a stock that I personally like to
trade. Look at this: CRC,
nicely going up
and down
and up and down.
It has really,
really nice trends.
Now here's the deal.
As you can see, it's not going up from
the lower left to the upper right.
And it doesn't have to because as
a trader,
you can participate in these short
swings to the upside as
well as to the downside.
Yeah, that's true.
As a trader,
when you're swing trading stocks,
you can make money even if
the market
or the stock is falling.
So, the most important thing when selecting
the right stock for swing trading
is finding a stock that has nice
swings. Let me show you an example of 'not'
nice swings.
Here's another example: Twitter.
Mainstream, right?
I mean, look at this.
There's a gap here.
Then it's railing all the way up.
Then something happened
and BOOM, it is crashing down
and crashing down
and see, this is all over the place.
Here's another example of a stock that I like:
PEN.
I recently traded PEN
and as you can see,
this is where it's nicer.
Going up
and down, and up
and down, like waves in the ocean.
This is what you really want.
Now compare this to Tesla again.
Which is like all
over the place.
And then you have stocks like
W or PEN.
Those are the stocks
that I like to trade.
Swing trading stocks...
How do you do this?
Swing trading stocks for beginners.
First of all,
you have to make sure that you're selecting the
right stock.
And now you know, do not select
any mainstream stocks like
Facebook
or Twitter
or Tesla
or Apple.
It's all over the place.
You want to trade stocks that are a little bit under the radar
because for example: CRC,
I don't even know what they're doing.
Nobody probably knows what they're doing
and nobody knows who their CEO is.
So, whatever the CEO is tweeting,
it doesn't really matter.
The 3 things,
first of all, you need to know
watch to trade,
what stock to trade
and you want to trade stocks that are
nicely going up
and down, and up
and down. Secondly,
you want to know when exactly to enter
and I'm doing this based on indicators
and we're going to cover this in another video.
Step number 3,
you need to know when to exit.
You need to know when to exit
with a profit.
If the trade goes your way
and also when to exit
with a loss, if the trade goes
against you.
So, as you can see,
swing trading for beginners is
perfect
and it can be fairly simple.
Don't make it more complicated.
The beautiful thing is when you're using indicators,
you don't have to worry about all these fundamentals
and PE ratios
and EPS
and all this kind of stuff.
Keep it easy.
Keep it simple
and this is how you
can succeed
with stock trading.
As you know, we are doing bootcamps all over
the country.
If you would like to know where we are next,
go to bootcamp.rockwelltrading.com.
It's free.
And this is where we will talk about
exactly these 3 things so
what stocks to trade
and how to find the best stocks.
When exactly to enter.
And I'll also show you when to exit.
Hope this helps
and I'll see you soon.