Swing Trading Strategy
Rainmaker’s swing trading strategy :
Swing trade strategy for beginners and indecisive people:
This is how I exploded my fidelity account 3x between March and May with very little effort or time put in and pretty low stress. I mostly played the most oversold tickers available, but this works on normal markets too. Should be a good opportunity to redo in the coming weeks with round 2 of covid.
So the play is this: instead of buying and selling like you normally would, 100% of shares, buy shares and when the price rises, sell off your cost basis and hold the rest.
For instance – I buy 100 shares of Ford for $4, spend $400. The price rises to $5 I sell 80 shares for $400 and keep 20 for further growth. Then I buy $400 worth of CCL at $8. When it goes to $10 I sell 40 and keep 10. Use this strategy to accumulate a large mass of holdings and sell near the next market peak.
Why I like it: it removes some of the mental challenges associated with selling off holdings. You keep only the free shares and keep repeating with the same initial capital. Tight stop-loss (SL) keeps you from losing that capital. Once you have free shares, it’s easy to forget about them and wait 3 months which is hard when you want to trade a lot. It also lets you keep gaining on things that run further without feeling like you sold too early. It’s a great strategy for beginners or people who struggle with on the fly decision or proper planning for exits.