Consistently Profitable Swing Traders Have A System!
The operative words here are consistently and system.
Sure, in a raging bull market, anyone and his mother can make a quick buck investing in stocks. During the dot-com frenzy of the late 90s, for instance, it was literally the case that you could pin the stock page on the wall, throw a dart and buy whatever stock it landed on for profits the next day.
But such good times are few and far between. Besides, you never really know what tomorrow will bring. Beware the so-called expert who tells you otherwise. Only hindsight is 20/20.
No, to consistently reap profits year-in and year-out, the stock trader must deploy a system – a swing trading system proven to be profitable under a myriad of market conditions.
An hour's worth of web surfing should convince you that most professional traders agree on this point. Where they do not agree is exactly what should go into that system. While it is certainly true there are as many trading systems as there are traders, it is equally true that most trading sites today seem solely designed to convince you of the supriority of their systems. And then, of course, to expertly part you from your money once they have.
Swing Trade Systems is unlike these sites.
Not just because it has nothing to sell. But more importantly, because its goal is to assist you in developing your own swing trading system. You, after all, are the person ultimately responsible for your own success (or failure) as a trader. So you might as well be in on the ground floor and guide the development of your system every step of the way.
To that end, this site is organized around the key components of any successful swing trading system.
The Five Components
|1. Swing Trading Plans||➔ general plans of action answering why you trade, your attitude towards risk, etc.|
|2. Swing Trading Strategies||➔ specific sets of instructions specifying exactly how you will conduct your trades|
|3. Swing Trading Resources||➔ the material and non-material means by which you will execute your trades|
|4. Backtesting and Paper Trading||➔ records of how your system would have performed using a fake trading account|
|5. Live Swing Trading||➔ the central component towards which the other components all eventually lead|
Each component is important in its own right. Trading plans, for instance, give you insight into what type of trader you are or plan to be.
Trading strategies, adequately prepared, lead you step-by-step from stock selection to trade execution.
Trading resources, like online charting and screening services, give you access to data at a volume and speed unheard of just a few short years ago.
Backtesting and paper trading are two activities that give you confidence your system will be profitable when it comes time to stake real money.
And live trading provides valuable feedback, allowing you to adjust your trading system to ever changing market conditions.
However, it is when these components are assembled and begin to work together that their value is fully felt. Alone they have utility. But together they are greater than the sum of their parts and become a powerful force for the trader. Deploying such a system helps keep the odds in your favor. Stock trading is, after all, a game of mathematical probabilities. Trading without a system effectively amounts to leaving things to chance. Great care must therefore be taken that these components are solidly in place before a single live trade is ever made.
But if you have never put together a swing trading system before, or if you have only done so piecemeal, you are forewarned: properly developing these components takes time and effort. Actually, a lot of time and effort. This is primarily the reason why so few new traders develop their own trading system. They are so anxious to make that first trade, they begin to look for shortcuts and end up skipping the necessary preliminary work. They inevitably start trading using someone else's system. Or worse: they use no system at all.
The Costs of Adopting a Foreign Swing Trading System
Trading with a system foreign to you is more often than not a costly mistake. First of all, you only have someone else's word that their trading system will turn a profit. In the online world, this is always a gamble. There are plenty of shady characters out there who will sell you systems that look good on paper, but have never actually been put to the test. And even if the system is freely distributed by someone whose trading credentials are beyond reproach, it still may not be right for you. Everyone trades a little differently and each trading system should reflect that difference. At the end of the day, the only way to ensure a trading system will reflect your own personality and trading style is to develop it yourself.
A trading system should never be thought of as optional. It is vital to your success as a trader. The hours, days – even weeks – you will spend writing up and testing your own trading plan and strategy, using resources that you yourself select, is perhaps the best investment you will ever make. Not only will it force you to learn the theory of trading. It will also give you that winning confidence which can only come from first-hand experience. Off-the-shelf trading systems simply fall short here.
What This Site Provides You
If you are not yet convinced of the value in developing your own swing trading system, you are encouraged to continue exploring this site. As suggested by the menu at the top of every page and by the directional links at the bottom of most others, this site was originally designed to encourage the user to move sequentially: from Plan to Strategy, then through Resources and Testing, to arrive at Live Trading. You should treat each of these as a stage in the development of your own trading system. This might mean you keep the general format and structure you find here, and just adapt the specific content matter for your own purposes. (Rest assured, this site was largely written up with a particular trading system in mind, so all the examples are consistent with one another). Or else you can dump everything and come up with something completely original. This is your trading system, after all. Take the time to personalize it as much as possible.
On a final note, you will quickly see how these components are highly interconnected. This means that in practice, strictly adhering to the suggested sequence of the site menu is difficult, if not impossible. You will find, for instance, that in order to fill out certain sections of your trading plan, you will already need to know something about your trading strategy; and selecting which trading resources you will use will require knowing which would be good platforms for testing and live trading.
The best advice here is to stay flexible. As you study the material on these pages, follow the connecting threads according to where your educational needs and desires lie. Put pen to paper (or fingers to keyboard) and record your progress. Your trading system will soon begin to emerge organically and bring you that much closer to the way the professionals actually trade.
As already said above, developing your own swing trading system requires a lot of hard work. But it can and must be done. Anything short of this... well, you might as well grab a dart and leave things to chance.Overview of Swing Trading Plans »