Saturday, May 27, 2006

The Daily Routine of a Swing Trader

Swing trading combines fundamental and technical analysis in order to catch momentous price movements while avoiding idle times. The benefits of this type of trading are a more efficient use of capital and higher returns, and the drawbacks are higher commissions and more volatility. Swing trading can be difficult for the average retail trader. The professional traders have more experience, more leverage, more information and lower commissions; however, they are limited by the instruments they are allowed to trade, the risk they are capable of taking on and their large amount of capital. (Large institutions trade in sizes too big to move in and out of stocks quickly.) Knowledgeable retail traders can take advantage of these things in order to profit consistently in the marketplace. In this article, we lay out what a good daily trading routine and strategy looks like, and show you how you can be similarly successful in your trading activities.

Pre-Market
The retail swing trader will often begin his or her day at 6am (EST), well before the opening bell. The time before open is crucial for getting an overall feel for the day's market, finding potential trades, creating a daily watch list and, finally, checking up on existing positions.

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