Quote from lindq:
As a swing trader who also buys pullbacks, I've found that it's important to focus on fundamentals, as well as technical levels that define the pullback. Every stock I trade goes through a monthly selection process that includes factors such as current and projected EPS, PE, PS, VOL and capitalization. If you are going to trade long for a multiday hold, it is very helpful to know that other professional investors are also going to be in there buying when things get soft. I also punch my returns by often taking on more shares if there is further weakness, provided there is no negative news or reports out on the stock.
The key to this operation is defining the levels that help you get into a stock that is ready to rally, without grabbing for a knife that may continue falling. If you find those, and if you understand the importance of a qualified watch list, then you can make a very good living as a swing trader in nearly any market environment.
How do you find these trades? Start by reading the charts. Look for those conditions that set up a pullback and a following rally. Look for buyers rushing for the doors. Panic bars are easy to see. Keep your indicators very simple. Then backtest, backtest, backtest to find what works, when it works, and why it works. There is good logic to these trades, and it starts with the charts.
Recent Swing Pullbacks:
CCU - 9/29
COH - 9/30
FAST - 9/30
ETM - 9/29
TSC0 - 10/1
