Edward Day - Swing Trading Strategies For Beginners: Learn Stocks and Options to Build Passive Income From Home

Swing Trading for Beginners: 3-Hour Crash Course

Learn Stocks and Options to Build Passive Income From Home

Edward Day

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Introduction

T here is a time to go long, a time to go short and a time to go fishing - Jesse Livermore

Have you ever tried to trade the markets before? If your answer is yes, then youre not alone. Pretty much everyone tries to make money trading at some point in their lives. Heres another question: Have you been successful at it?

The number of people that answer in the affirmative to this question are far fewer in number. In fact, according to research carried out by the news outlet DailyFX, almost 90% of traders end up losing their capital within a year of opening their accounts (Rodriguez, 2017).

Such numbers tend to intimidate beginners. More often than not, the average unsuccessful trader has tried implementing buy and hold strategies with varying degrees of success in the past. Buy and hold is an extremely long-term oriented strategy and theres no telling when your investments will pay off.

Trading, on the other hand, is a far more active pursuit. It involves working in the markets intimately, and tends to offer far more insights into human behavior. While buy and hold seeks to insulate the investor from human emotions, trading strategies, such as the ones youll be learning in this book, seek to take advantage of them.

Greed and fear are ever present in the markets, and Ill be teaching you how you can take advantage of these emotions by flipping them within your head. Before we get to all of that, there are many other things you need to learn. Most importantly, you need to understand that buy and hold investing calls for a very different approach than the one you will need when swing trading.

Short Versus Long Term

M y objective with this book is to help you understand the benefits of short term swing trading. It isnt to tell you that buy and hold investing is bad. In fact, as you read this book, youll figure out that many of the methods you use to screen long-term stock investment strategies can be used to identify short-term plays as well.

Correlated assets are a good example of this. Correlation refers to the relationship between two asset classes. For example, gold has always been viewed as a hedge or a safety net whenever the United States is in turmoil or if its suffering from a financial crisis.

By spotting movements in certain asset classes, you can take advantage of movements in other assets as well. This is just one method youll be learning in this book. I will be focusing on technical analysis as well, since trading without this is a bit like trying to win a 100 m race while hopping on one leg.

The most important part of your trading education is risk management. Far too many traders invest their time in learning how markets work from a technical perspective. However, learning your technical strategy is one thing, but learning to make it work for you over the long term as the market changes is entirely another.

This is what risk management boils down to. It helps you keep the money youve earned over the long run, and stops you from making silly mistakes that cause traders to lose money. Your mindset is a part of risk management and youll be learning all about this in the later chapters of this book.

Understanding your mindset involves figuring out how greed and fear dominate our minds when were trading in the market. The successful trader isnt someone who has overcome these emotions. Instead, theyre someone whos learned to think about the markets correctly. Learn how to think correctly, and youll find that you wont need to control your emotions or be fearful of your mind being clouded by them.

As a part of helping you fulfill your trading dreams, Ive also outlined a simple seven-step process that will help you understand all the steps involved in becoming a successful trader. Some of these steps will take time while you will breeze through others with ease.