Profitable Swing Traders Have A System!
The operative words here are consistently
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
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
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 5 key components of
any successful swing trading system.
Here you will learn about:
Trading Plans – general plans of action answering
everything from why you want to be a trader to your general
attitude towards risk
Trading Strategies – specific sets of
instructions specifying exactly how you will conduct your
Trading Resources – the material and
non-material means by which you will execute your trades
and Paper Trading – records of how your system
would have performed historically and currently, using a
fake trading account
Swing Trading – the central component of a trading
system towards which the other four components all
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
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 –
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
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
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.
of Swing Trading Plans ⇨