Live Swing Trading Walk-through
This page outlines a typical day in the life of a swing trader. The trading plan and strategy that illustrates this site is used to detail the example. You should be able to visualize what your own trading day will look like by the time you begin live trading.
8:30 – 9:30
- begin trading day by booting up computers
- check email
- open four documents:
- trading plan
- trading strategy
- watch list
- trading log and calculator
- visit CNBC.com for pre-market index futures (Dow, S&P, NASDAQ) data, overseas market data, and business/financial news headline
- visit Nasdaq.com for pre-market quotes on my open positions
- review open positions and today's list of potential trades
9:30 – 4:00
- watch market open for open positions and for stocks on today's list of potential trades
- strike stocks off today's list of potential trades as soon as they fail to meet the entry conditions as specified in the trading strategy
e.g., if today is 02-11-16, APC would be struck off immediately because it opened at a price below the previous day's low. It may be a potential trade for the next trading session, but not today. (Incidentally, this is the third time in a row APC was rejected as a potential trade: on the 9th, its closing price was lower than EMA(8) and its closing price was lower than its opening price and its low was lower than the previous day's low – all reasons to reject it; on the 10th, its closing price was lower than EMA(8) and its low was lower than the previous day's low).
e.g., if today is 01-27-16, KMI would not be rejected immediately as it opened above the previous day's low. But over the course of the trading session it went lower than the previous day's low and its close was below its open.
e.g., if today is 12-14-15, SPG would be rejected because it did not close above EMA(8)
- monitor open positions: adjust stops and log newly closed out positions as necessary
e.g., if today is 01-04-16, ANTM and ADM would be stopped out at 137.19 and 35.88, respectively. The sold dates and prices are recorded in the trading log and calculator.
e.g., if today is 12-14-15, VRX and ANTM would be open positions. Only minor stop adjustments using the most current ATR data would be needed today. (For VRX, the first major stop adjustment occurs in the following trading session where it gaps up significantly at the open. By the end of the day, the initial/adjusted 0.5ATR stop at ~90.72 would be replaced by a stop at 100.37, calculated by subtracting 1.6ATR from that session's high of 113.00. For ANTM, the first major stop adjustment occurs three trading sessions later, where the initial/adjusted 0.5ATR stop is replaced with a 1.6ATR stop at 134.78).
- open a new position on any remaining stocks on the potential trades list
e.g., if today is 12-14-15, DUK remains on the list. At 3:30, all entry conditions are satisfied and look to remain that way for the remainder of the trading session. TradeKing's order entry screen is pulled up and 29 shares are bought at market price. Once the order is submitted, the filled price (along with stock symbol, purchase date, quantity, commission, sector and exchange) are recorded in the trading log and calculator. As well, the current ATR is input in the appropriate column to calculate the initial stop. [UPDATE: TradeKing is now Ally.com]
A sell stop order is then input into TradeKing's order entry screen:
TradeKing Order Entry Screen – Sell Stop Order
This new position is then documented graphically in my TradingView account:
TradingView Chart (Annotated)
The 'long position' utility (item 2) is used to capture the market buy and sell stop orders. (note: If the initial 0.5ATR stop is later replaced with a 1.6ATR manual trailing stop, the 'price range' utility is used. This is also located in the dropdown menu of item 2).
The zoom in/out buttons (items 5, 6) are used to assist in the exact positioning of these utilities on the chart.
A PNG image of the chart is then taken and filed away using the camera utility (item 7). (note: An image is also taken when open positions are closed out).
- as time permits between open order maintenance and new order execution:
- seek out new swing trading opportunities
- research new swing trading strategies
- visit trading/investment educational sites
4:00 – 5:00
5:00 – 7:00
- visit Nasdaq.com for after hours quotes on my open positions
- update watch list:
- ensure the desired indicators have been selected (item 3) and are active on the chart (note: ATR is found here as well)
- copy and paste the stock symbols from row 'Stage 3' into TradingView's 'Watchlist – Add Symbol' window' (item 4); (note: as TradingView limits the number in their watchlist – it is well over 100 – this may have to be done in sections)
- use the up/down arrow keys on the computer and examine each stock chart in turn. If three consecutive candles are found to have three consecutive lower lows, it may be the beginning of a swing point low. Place that stock on the list of potential trades for the next trading session provided it does not violate any entry conditions. Otherwise, keep the stock in Stage 3 until it violates entry conditions in such a way that it becomes untradable in the near term. In which case sort it into one of the other three rows as appropriate; if it does not belong in any of them, place it back into the stock universe population without annotations.
- e.g., if today is 02-19-16, EXPE would not go on the list because prices have already retraced more than 50% of the downward trend (note: this can be easily measured using the fibonacci retracement utility found in the dropdown menu just below item 1)
- e.g., by 02-09-16, KSU has retraced more than 50% without having three consecutive lower lows
- copy and paste the stock symbols from row 'Stage 1 & 2' into TradingView. Once the upward price movement appears to be reversing (ie, it is no longer making higher highs and/or has now made a lower low), move that stock into row 'Stage 3.' Otherwise, keep it in its current place until it violates entry conditions in a way that makes it untradable in the near term. If so, re-sort it into another row, or back into the stock universe population, as appropriate.
- copy and paste the stock symbols from row 'Preliminary stage' into TradingView. Once prices break the trend line, move that stock downward into row 'Stage 1 & 2)
- copy and paste the stock symbols from row 'Possibles' into TradingView. Once a 21 day downward trend has established itself, move that stock into the row 'Preliminary stage.' (note: The candlestick count can be quickly established using the 'date range' utility. This can be found in the dropdown menu of item 2).
- in all cases, if a new lowest low is established, the trend line will most likely need to be redrawn. Trend lines are drawn as per pages 71-3 of Sperandeo's classic book.
- (note: Once every 2-4 weeks, the entire stock universe is copy and pasted into TradingView. Only charts without annotations need be reviewed. If one is found to have a series of at least five candles of lower lows, a trend line is drawn and it is placed into the 'Possibles' row for observation. This work is usually preformed on the weekend or on a trading holiday).
- close the four open documents:
- trading plan
- trading strategy
- watch list
- trading log and calculator
- backup data
- shut down computers
7:00 – 7:15
- end trading day by watching business/financial news headlines on TV-cable channels CNBC, FBN, Bloomberg and CNBC World