1. Account Setup
- Open a brokerage account (taxable and or Roth IRA).
- Link checking account to transfer funds.
- Start with any amount (e.g., $100/month).
- Roth IRA is tax-free; brokerage account requires estimated tax payments.
2. Stock Selection
- Use large-cap stocks (market cap ≥ $10B).
- Use Charles Schwab’s stock screener to filter by:
- Market cap
- Exchange (NYSE, NASDAQ)
- Price
- Export filtered list to spreadsheet.
- Eliminate international stocks and LLCs; keep corporations (e.g., Inc., Co., Corp).
- Use monthly charts to identify IPO year; prefer older companies.
3. Chart Analysis
- Use ThinkorSwim (free via Schwab) for charting.
- Analyze maximum monthly chart for long-term trend.
- Trace uptrend lines by connecting obvious lows.
- Trace support lines through valleys.
- Create a shortlist of stocks with strong charts.
4. Entry Strategy
- Use maximum daily chart for detailed analysis.
- Identify pullbacks to support lines.
- Look for confirmation via higher lows before buying.
- Use drawing tools to mark entry points and track trades.
- Color-code support lines to highlight entry targets.
5. Buying Stocks
- Place limit orders via Schwab (not ThinkorSwim).
- Ignore bid/ask; use current price during lunch hours.
- Buy one share to test strategy and preserve capital.
- Minimum target profit: $1 after fees.
6. Exit Strategy
- Three exit methods:
- Next High: Sell after reaching a new high.
- Time-Based: Estimate rise duration (e.g., 6–9 months) and sell after.
- Quantified Target: Use price ratio (e.g., 2× entry price) to set target.
7. Trade Management
- No stop-loss used.
- Hold through drawdowns if stock is strong.
- Track trades in spreadsheet.
- Flag underperforming stocks for removal at year-end.
- Replace flagged stocks with new ones from master list.
8. Tax Considerations
- Estimate and pay quarterly taxes for brokerage accounts.
- Use Schwab’s 1099 forms for tax filing.
- Prefer manual entry of each trade for accuracy.
- Group short-term trades if within same year.
- Separate short-term and long-term trades for tax reporting.
9. Strategy Scaling
- Scale by increasing share quantity, not changing strategy.
- Build familiarity with stock patterns over time.
- Use Roth IRA for testing; brokerage account for scaling.
10. Final Notes
- Start small, grow gradually.
- Use dividend-paying stocks for passive income.
- Swing trading is a path to financial independence.
How to start swing trading-Long up trend line swing trading strategy
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