Swing Trading For Dummies, 2ed

Omar Bassal, CFA

ISBN: 9788126526345

376 pages

INR 699

Description

Swing trading is named after the strategy of taking advantage of brief price swings in strongly trending stocks and riding the momentum in the trends' direction--buying if the trend is up or selling short if the trend is down. Swing Trading For Dummies, 2nd Edition provides readers with expert advice and information on how to increase their profits and limit their risks by using this popular trading method

Introduction

About This Book  

Foolish Assumptions  

Icons Used in This Book  

Where to Go from Here  

 

Part 1: Getting into the Swing of Things

Chapter 1: Swing Trading from A to Z

  • Understanding What Swing Trading is (and Isn't)
  • The differences between swing trading and buy-and-hold investing
  • The differences between swing trading and day trading
  • What Swing Trading is to You: Determining Your Time Commitment
  • Swing trading as your primary source of income
  • Swing trading to supplement income or improve investment returns
  • Swing trading just for fun
  • Sneaking a Peek at the Swing Trader's Strategic Plan
  • The "what": Determining which securities you'll trade  
  • More "what": Trading stocks consistent with your values
  • The "where": Deciding where you'll trade
  • The "when" and the "how": Choosing your trading style and strategy
  • Building Your Swing Trading Prowess

 

Chapter 2: Understanding the Swing Trader's Two Main Strategies

  • Strategy and Style: The Swing Trader's Bio
  • Two forms of analysis, head to head
  • Scope approach: Top down or bottom up?
  • Styles of trading: Discretionary versus Quantitative
  • Wrapping Your Mind around Technical Theory
  • Understanding how and why technical analysis works
  • Sizing up the technical advantages and disadvantages
  • The two main approaches of technical analysis
  • Appreciating the Value of the Big Picture: Fundamental Theory
  • Understanding how and why fundamental analysis works
  • Surveying the fundamental advantages and disadvantages
  • Looking at catalysts and the great growth/value divide

 

Chapter 3: Focusing on the Small Stuff: The Administrative Tasks

  • Hooking Up with a Broker
  • Choosing a broker
  • Opening an account
  • Selecting Service Providers
  • Providers to do business with
  • Providers to avoid
  • Starting a Trading Journal
  • Creating a Winning Mindset

 

Part 2: Timing is Everything: Technical Analysis

Chapter 4: Charting the Market

  • Nailing Down the Concepts: The Roles of Price and Volume in Charting
  • Having Fun with Pictures: The Four Main Chart Types
  • Charts in Action: A Pictorial View of the Security Cycle of Life
  • The waiting game: Accumulation
  • The big bang: Expansion
  • The aftermath: Distribution
  • The downfall: Contraction
  • Assessing Trading-Crowd Psychology: Popular Patterns for All Chart Types
  • The Darvas box: Accumulation in action
  • Head and shoulders: The top-off
  • The cup and handle: Your signal to stick around for coffee
  • Triangles: A fiscal tug of war
  • Gaps: Your swing trading crystal ball
  • Letting Special Candlestick Patterns Reveal Trend Changes
  • Hammer time!
  • The hanging man
  • Double vision: Bullish and bearish engulfing patterns
  • The triple threat: Morning and evening stars
  • Measuring the Strength of Trends with Trendlines
  • Uptrend lines: Support for the stubborn bulls
  • Downtrend lines: Falling resistance
  • Horizontal lines: Typical support and resistance

 

Chapter 5: Asking Technical Indicators for Directions

  • All You Need to Know about Analyzing Indicators
  • You must apply the right type of indicator
  • Not all price swings are meaningful
  • Prices don't reflect volume, so you need to account for it
  • An indicator's accuracy isn't the best measure of its value
  • Two to three indicators are enough
  • Inputs should always fit your time horizon
  • Divergences are the strongest signals in technical analysis
  • Determining Whether a Security is Trending
  • Recognizing Major Trending Indicators
  • The compass of indicators: Directional Movement Index (DMI)
  • A mean, lean revelation machine: Moving averages
  • A meeting of the means: MACD
  • Spotting Major Non-Trending Indicators
  • Stochastics: A study of change over time
  • Relative Strength Index (RSI): A comparison of apples and oranges
  • Combining Technical Indicators with Chart Patterns
  • Using Technical Indicators to Determine Whether to Be In or Out of the Market

 

Chapter 6: Trend Following or Trading Ranges

  • Trading Trends versus Trading Ranges: A Quick Rundown
  • Trend Trading
  • Finding a strong trend
  • Knowing when to enter a trend
  • Managing risk by determining your pain threshold 19
  • Trading Ranges: Perhaps Stasis is Bliss?
  • Finding a security in a wide trading range
  • Entering on a range and setting your exit level
  • Comparing Markets to One Another: Intermarket Analysis
  • Passing the buck: The U.S dollar
  • Tracking commodities
  • Watching how bond price and stock price movements correlate
  • Putting Securities in a Market Head-to-Head: Relative Strength Analysis
  • Treating the world as your oyster: The global scope
  • Holding industry groups to the market standard

 

Part 3: Running the Numbers: Fundamental Analysis

Chapter 7: Understanding a Company, Inside and Out

  • Getting Your Hands on a Company's Financial Statements
  • What to look for
  • When to look
  • Where to look
  • Assessing a Company's Financial Statements
  • Balance sheet
  • Income statement
  • Cash flow statement
  • Analyzing More Than Just Numbers: Qualitative Data
  • Valuing a Company Based on Data You've Gathered
  • Understanding the two main methods of valuation
  • Implementing the swing trader's preferred model

 

Chapter 8: Finding Companies Based on Their Fundamentals

  • Seeing the Forest for the Trees: The Top-Down Approach
  • Understanding the basics of the top-down approach
  • Sizing up the market and examining the technical picture
  • Assessing industry potential
  • Starting from the Grassroots Level: The Bottom-Up Approach
  • Using screens to filter information
  • Assessing your screening results
  • Deciding Which Approach to Use

 

Chapter 9: Assessing a Company's Stock: Six Tried-and-True Steps

  • The Six Step Dance: Analyzing a Company
  • Step 1: Taking a Company's Industry into Account
  • Scoping out markets you're familiar with
  • Identifying what type of sector a company is in
  • Step 2: Determining a Company's Financial Stability
  • Current ratio
  • Debt to shareholders' equity ratio
  • Interest coverage ratio
  • Step 3: Looking Back at Historical Earnings and Sales Growth
  • Step 4: Understanding Earnings and Sales Expectations
  • Step 5: Checking Out the Competition
  • Step 6: Estimating a Company's Value
  • Gauging shares' relative cheapness or expensiveness
  • Figuring out whether the comparative share-price difference is justified

 

Part 4: Planning the Trade and Trading the Plan

Chapter 10: Fail Fast: Managing Risk

  • Risk Measurement and Management in a Nutshell
  • First Things First: Measuring the Riskiness of Stocks before You Buy
  • Looking at liquidity: Trade frequency
  • Sizing up the company: The smaller, the riskier
  • Assessing the beta: One security compared to the market
  • Avoiding low-priced shares: As simple as it sounds
  • Limiting Losses at the Individual Stock Level
  • Figuring out how much you're willing to lose
  • Setting your position size
  • Building a Portfolio with Minimal Risk
  • Limit all position losses to 7 percent
  • Diversify your allocations
  • Planning Your Exit Strategies
  • Exiting for profitable trades
  • Exiting based on the passage of time
  • Exiting based on a stop-loss level

 

Chapter 11: Knowing Your Entry and Exit Strategies

  • Understanding Market Mechanics
  • Surveying the Major Order Types
  • Living life in the fast lane: Market orders
  • Knowing your boundaries: Limit orders
  • Calling a halt: Stop orders
  • Mixing the best of both worlds: Stop limit orders
  • New order types: Algorithmic orders
  • Placing Orders as a Part-Time Swing Trader
  • Entering the fray
  • Exiting to cut your losses (or make a profit)
  • Placing Orders if Swing Trading's Your Full-Time Gig
  • Considering the best order types for you
  • Taking advantage of intraday charting to time your entries and exits
  • Investigating who's behind the bidding: Nasdaq Level II quotes

 

Chapter 12: Walking through a Trade, Swing-Style

  • Step 1: Sizing Up the Market
  • Looking for short-term trends on the daily chart
  • Analyzing the weekly chart for longer-term trends
  • Step 2: Identifying the Top Industry Groups
  • Step 3: Selecting Promising Candidates
  • Screening securities
  • Ranking the filtered securities and assessing chart patterns
  • Step 4: Determining Position Size
  • Setting your stop-loss level
  • Limiting your losses to a certain percentage
  • Step 5: Executing Your Order
  • Step 6: Recording Your Trade
  • Step 7: Monitoring Your Shares' Motion and Exiting When the Time is Right
  • Step 8: Improving Your Swing Trading Skills

 

Chapter 13: Looking at the Scoreboard to Evaluate Your Performance

  • No Additions, No Withdrawals? No Problem!
  • Comparing Returns over Different Time Periods: Annualizing Returns
  • Accounting for Deposits and Withdrawals: The Time-Weighted Return Method
  • Breaking the time period into chunks
  • Calculating the return for each time period
  • Chain-linking time period returns to calculate a total return
  • Comparing Your Returns to an Appropriate Benchmark
  • Evaluating Your Trading Plan

 

Part 5: The Part of Tens

Chapter 14: Ten Simple Rules for Swing Trading

  • Trade Your Plan
  • Follow the Lead of the Overall Market and Industry Groups
  • Don't Let Emotions Control Your Trading
  • Diversify, but Not Too Much
  • Set Your Risk Level
  • Set a Profit Target or Technical Exit
  • Use Limit Orders
  • Use Stop-Loss Orders
  • Keep a Trading Journal
  • Have Fun

 

Chapter 15: Ten (Plus One) Deadly Mistakes of Swing Trading

  • Violating Your Trading Plan
  • Starting with Too Little Capital
  • Gambling on Earnings Dates
  • Speculating on Penny Stocks
  • Changing Your Trading Destination Midflight
  • Doubling Down
  • Keeping Open Positions While You Travel
  • Thinking You're Hot Stuff
  • Concentrating on a Single Sector
  • Trading Illiquid Securities
  • Overtrading Stocks

 

Appendix: Helpful Resources for Today's Swing Trader

Index

 

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