We picked the stock CDNS to analyze its daily chart for 1 year time frame using our short-term uptrend line swing trading strategy.
Swing trading stock chart analysis
Analyze your stock chart by tracing the uptrend lines connecting the lows on the chart to determine if the stork is moving upward.
A stock is moving upward if the current lows are higher than the previous lows. That will give an oblique uptrend look to the line you trace below the lows.
Short trend line Swing Trading Strategy
The short trend line swing trading strategy allows you to swing trade often to practice your swing trading strategy through the year to see how it aligns with your risk tolerance, your personality type and whether it could help you reach your financial goals over time.
With the short trend line swing trading strategy, you could follow the stock on a shorter uptrend line and swing trade it even after it strays away from its main trend line. The downside is after you purchase a stock while it is way up, it could pull back multiple days to its main trend line. You might have to hold the stock in your portfolio for a while until it goes back up for you to sell for a profit. For that reason, it is good to pick stocks you are confident about and could invest in the long term, to build your swing trading watchlist.
To select stocks to swing trade the next day, analyze the chart of these stocks.
Time frame for swing trading: 1-year daily chart for stocks you swing traded more than once or maximum daily chart for stocks you never traded before.
Swing trading stock watchlist: large capitalization companies’ stocks that went public before 2008 and have upward overall trend to their maximum monthly stock charts.
Stock to pick for swing trading today: Up-trending stocks that pulled back the day before to a trend line you predetermined to trade on or the stock pull back to multiple times in the short term past.
Swing trading strategy: Buy up-trending stocks at the 1st green price bar that followed the previous day pull red bar.
Swing trading purchase order: Set a limit price to buy some shares of the stock at the price it is currently selling.
How much to spend per swing trade: allocate $300 per swing trade or up to 5% of your swing trading account value which is higher.
When to exit swing trading: Sell a swing trading stock when your minimum profit target is reached or exceeded.
Swing trading sale order: Set a limit price to sell your stock at the price it is selling at the time of the sale order request.
What time of the day to swing trade: If you have a full-time job, pick a time of the day to swing trade stocks. You can place your swing trades early in the morning before the market opens. At which case you picked stocks to swing trade after you see the 1st green price bar the day before on their up-trending daily chart.
You can swing trade around your lunchtime around noon when the stock market is open and halfway through the day. This allows plenty of time for the stocks to display whether their price will go up that day for you to buy the ones you picked or not. When trading around noon, you could purchase stocks that started to go up have their 1st green bar day after a pull red bar to their trend line the day before.
Conclusion: Swing trading chart analysis for beginners-Swing trading strategy
This video explains how we analyze a stock using our short-term uptrend line swing trading strategy.
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