Swing Trading Priority

Hi MC,

If I understand correctly, almost all your trades are swing trades. Only the ones that continue to run turn into a position trade. Does this mean you will usually take the partials (i.e, 1/3 at 10% gain, 1/3 at 15%, etc.) and your position trade will be 1/3 of the initial size? Assuming if the name keeps running, then all new adds will be for position trading because you're building a cushion already?

Thanks

JY

JY

Thank you for your question!

Yes! Most of my trades end up being swing trades. That is if I am not stopped out on a losing trade right away (it happens to everyone). Every time I buy a stock I am thinking this may be the grand slam that I am looking for. But, in reality, most stocks that break out of a base rise 20%-30% and former another base. This means we must take some profits as base building can take weeks and often times months.

Therefore, my basic strategy is to take  a 1/3 partial at 10% and another 1/3 partial at a 20% gain. We need to lock in some profits and not give them back.  However, there are times when a stock just keeps running so fast that we can just let them run. This has happened to me quite a bit this year, and the portfolio starts to become a little lopsided when stocks like SMCI run more than 10% in less than a month. That is a nice problem to have.

In this current market we want to allow the stocks to run a bit more as this rally is producing quite a few monster stocks that are providing us with big gains.

I hope this answers your question. If you have a specific stock in mind then please feel free to ask another question.

Regards,

Marty