Section
Swing Trading
Positions held from a few days to a few weeks, which means every one of them sits through closed markets, overnight news and the cost of whatever money is borrowed to hold it.
A swing trade lives through nights and weekends that a day trade never sees. The stop protects you while the market is open. While it is closed, only the size of the position does, because a stock can open well past any stop after an earnings report or a weekend headline.
Plan the target with the same care as the stop, since the distance between the two decides whether the trade is worth taking at all. The position size calculator prices both, along with the gap you would take if the stock opened past your stop.
Columns
All columns →Ledger
Holding Swing Trades on Margin: The Interest Is Small, the Gap Is NotOn a margin swing trade the interest is a rounding error; size the position for the overnight gap, because no stop will.
Versus
When the Market Goes Sideways, Swing the Range or Stand AsideIn a sideways market, trade the range with range rules if you take profits fast; otherwise cut size or wait.
Answers
Concepts
- Reward-to-risk ratio
The potential gain on a trade from entry to target divided by the potential loss from entry to stop, used to judge whether a setup pays enough for the risk it carries.
Quizzes
- Choose Your Entry: A Quiz on Planning Entries, Stops and Targets
Whether you can compare trade plans by reward-to-risk, place a stop where the idea fails, size from ATR and check a target against resistance.
- Green Light or Walk Away? A Trade Setup Quiz
Whether you can check a swing setup's trend, location, reward-to-risk, event risk and size before you take it, and pass when one check fails.
- Sit Tight, Cut It or Add More? A Position Management Quiz
Whether you can manage an open swing trade by the numbers: when to add, trim, trail, exit on time or news, and when to leave it alone.