1. What is Swing Trading? The exact definition varies depending on the source, but swing trading is a short-term trading strategy that involves capturing momentum in a stock’s price within about 1-10 days. As opposed to day trading, which involves entering and exiting a position within the same day, sometimes even the same hour, swing trading allows for more flexible entries/exits. On the other end of the spectrum, there are long-term buy-and-hold strategies that focus on the fundamental and intrinsic value of stocks. Unlike swing trading, the primary focus of long-term strategies is not technical patterns and price trends. Here is the Swing Trading Definition from Investopedia.
2. Does Swing Trading Work For People With Full-Time Jobs? Since swing trading involves trying to capture 5-20%+ moves within a span of 1-10 days, you don’t necessarily need to be at your computer monitoring your trades every minute. This is ideal for those seeking to pursue a trading strategy part-time and also be able to achieve much higher returns than the classic buy-and-hold strategy. Most people pursuing long-term strategies would be thrilled with a 10% return on their investment every year, while swing trading attempts to capture similar returns on every single trade. In addition, most brokerages offer mobile applications to allow for buying and selling on the go. You also have the ability to set conditional orders for your trades, which means you can automatically schedule the sale of your shares if the price drops to a certain level or increases to a certain level, whichever happens first.
3. How Much Money Do I Need to Get Started? This is a hard question to answer, but in my opinion, the minimum is $500-1,000 (preferably closer to the $1,000 mark). There are a few reasons why a larger starting portfolio is ideal. First, you have more leverage. For example, if you catch a 10% win on a $10,000 trade, you gain $1,000. If you catch a 10% win on a $1,000 trade, you only gain $100. Your money can do more work for you if you have more of it. Second, you have to be very selective with the trades you make because with a smaller portfolio, you don’t have as much freedom to diversify. Everything you have will be going toward one or two trades at a time. Third, broker commission fees have more of an impact on smaller portfolios. Usually, it’s a fixed cost per trade (around $5-10). So whether you make a trade worth $1,000 or $100,000, the commission is still $5-10. Obviously, this will eat into the profits of a $1,000 trade more than a $100,000 trade. Luckily, you can now avoid trading commissions altogether with a leading edge brokerage firm, Robinhood. They don’t have any commission fees or minimum deposits, allowing beginners to move comfortably into the stock trading scene at their own pace.
4. Is Volatility a Good Thing or Bad Thing? Volatility is exactly what makes swing trading such a desirable strategy. If it weren’t for volatility, then 5-20%+ gains within 1-10 days wouldn’t be possible. The goal is to catch those drastic price movements quickly and get out of the trade before the trend reverses. To find stocks with high volatility, you’re usually looking at small caps within a price range of $1-10. These small caps are inherently risky since they are typically not proven companies, but this is the chance you have to take for such attractive returns. As is the case with any investment you ever make, you must consider if the risk is worth the reward. You never want to make trades outside of your optimal Risk/Reward Ratio. If you are able to use volatility to your advantage and manage risk properly with your swing trades, then you can be highly successful.
5. What Broker Do You Recommend? There are 2 brokers I recommend: TradeKing & Robinhood. TradeKing is a discount broker ($4.95 per stock trade) with an inviting mix of pleasant customer service and high-caliber tools. They offer an amazing value compared to many other brokers that charge around $10 per trade. As for Robinhood, they are a relatively new broker offering $0 commissions. The only downside is the lack of tools within their mobile-based trading platform. But overall, you simply can’t beat free trading. Their top priority is to give everyone access to the stock market by eliminating both commissions and minimum deposits. In my opinion, their service will only continue to improve over time and their approach could quite possibly be the future business model of all brokerages.
7. Does Your #1 Newsletter Recommendation, Jason Bond Picks, Offer a Free Trial? Jason Bond does not offer a free trial of his service and there is good reason for it. Simply put, teaching people how to trade stocks is a serious responsibility, so Jason Bond needs to focus all of his attention on his active, paying clients. It just wouldn’t be fair to offer his service to some individuals for free when he has dedicated clients paying good money for his daily watch lists, video lessons, real-time text/email alerts, chat room, and expert mentorship. In the long-run, his service would suffer if he was constantly focusing on all the questions and emails that come along with newcomers testing his service, and unfortunately wouldn’t have enough time for his loyal client base. What you need to understand is that you get what you pay for with Jason Bond Picks. It’s an educational opportunity worth it’s weight in gold if you apply yourself. In the end, Jason Bond doesn’t have time to be distracted from producing the absolute best service he can for his devoted paying clients.