Securities trading is offered through Robinhood Financial LLC. Though not as fast-paced and taxing as day trading, swing trading can still be highly stressful. Swing traders can trade various financial instruments, including stocks, forex, and cryptocurrencies, as well as derivatives such as options, contracts for difference , and futures contracts. The service also includes the ability to access a library of over 7,000 videos and courses to train you on how to trade penny stocks and potentially replicate Tim’s success. Scanz is a powerful stock trading software platform and is one of the best options on this list. Consider starting a free trial to see how effective the service can be for capturing alpha in your portfolio.

As a result, they avoid the risk of gaps from news announcements coming in after hours and causing a big move against them. Meanwhile, swing traders have to be wary that a stock could open significantly different from how it closed the day before. Some traders swing trade by using the market-wide relative strength of the stocks they have selected to find market leaders and laggards and group them into “potential buy” and “potential sell shorts”.

Herd Behavior in the Stock Market

Finding the right swing trade opportunities can come down to choosing the right strategies. When you’re new to swing trading, they can assist in helping you to shorten your learning curve a bit. This scan looks for stocks that have dropped off their recent price advance, but remain relatively strong and within 5% of their 20-day high. You’ll want to keep an eye on other technical indicators and chart patterns to decide whether these stocks are likely to continue their previous upward trends. The first two rules look for stocks that have been trending strongly over a period of four weeks, with the trend increasing over the past two weeks. The second two rules then scan for stocks for which the daily candlestick is straddling the 20-day moving average, indicating a pullback from the trend that may just be getting started.

But most brokers won’t even let a 4th-day trade execute — and you could be stuck holding the bag. In the same way, you select stocks that have a valid sell short setup from the “potential sell short” group. The stocks that don’t yet have a valid sell short setup could be placed in the “watch list for sell short” and regularly monitored until a valid sell short setup forms in any of them. Visit our article on ‘what is swing trading’ to learn more about the theories that drives swing trading to be one of the most popular trading strategies. Here’s what the screen setup looks like in ThinkOrSwim’s Stock Hacker. Notice that I omitted the XLK relative strength screen because it’s too difficult to setup. The screen fetches a small list of stocks, making it easy to gauge it’s relative strength against XLK manually.

Spotting a Trend Break

With SwingTrader, you get swing trade ideas handpicked by our experts plus full trading plans. Join today and get everything you need to speed up your trading—and your profits. A wide spread between the bid, the ask and commissions can eat too large a portion of your How to Find Stocks to Swing Trade profits. Swing traders can struggle with this too, but the effect is amplified for the day trader. Day traders can find themselves doing all the work, and the market makers and brokers reap the benefits. Day traders are in and out of trades within minutes or hours.

The risk of trading in securities markets can be substantial. You should carefully consider if engaging in such activity is suitable for your own financial situation.

Why Learning How to Find Stocks for Swing Trading is So Important

The three most important points on the chart used in this example include the trade entry point , exit level and stop loss . Any swing trading system should include these three key elements. The range of results in these three studies exemplify the challenge of determining a definitive success rate for day traders. At a minimum, these studies indicate at least 50% of aspiring day traders will not be profitable. This reiterates that consistently making money trading stocks is not easy.

• All expressions of opinion are subject to change without notice in reaction to shifting market conditions.
• Not having a steady paycheck makes a day trader’s income reliant on trading success.
• All are subsidiaries of Robinhood Markets, Inc. (‘Robinhood’).
• When the market indices are falling, sit out or consider shorting the weak stocks.
• Notice that I omitted the XLK relative strength screen because it’s too difficult to setup.
• Here you can find our archive with all our swing trading articles.

Any testimonials contained in this communication may not be representative of the experience of other eToro customers and such testimonials are not guarantees of future performance or success. Salesforce Inc provides enterprise cloud computing solutions. The company offers customer relationship management technology that brings companies and customers together. Its Customer 360 platform helps the group to deliver a single source of truth, connecting customer https://www.bigshotrading.info/ data across systems, apps, and devices to help companies sell, service, market, and conduct commerce. The construction stock has a market cap of $87 billion and an EPS of $7.45. Caterpillar has high liquidity and trades more than 2.1 million shares per day and generated revenue $53 billion in 2019. For correlated stocks, whatever affects one stock also affects the other, and when you lose money in one, it’s almost certain the other would be a loser too.