HOW
TO MASTER SWING TRADING & INVESTING JOURNEY
If you want to trade but can’t stare at a screen all day, Swing
Trading is your best friend. It’s the "middle ground"
between fast-paced day trading and slow long-term investing. It’s a mix
of T20 and one day and sometimes gives you a feeling of 5 day test match. Mastering
Swing Trading and building a successful investment journey requires some of the
qualities which every Traders and Investors must possess. I have 7 years of
experience in Swing Trading and my approach is simple and easy to learn and
apply. The basic qualities according to my limited knowledge are right entry , right
exit, position sizing , emotional control , backtested strategy, picking the
right share after analysing both Fundamental and Technical analysis and a lot
of patience. One should never time the markets as it can lead to blunder. Now
the question arrives how many or which strategy to follow. Backtesting the
strategy from shorter to longer time frames help and validate the strategy. Few
strategies should be backtested and followed religiously for maximum output.
Trading plan should be simple and specific.TV news or stock tips should be
avoided. Companies with good track record and posting best yearly and quarterly
net profits should be chosen. Cash Flow and institutional investors information
must be checked on quarterly basis.
Apart from having all the above skills or qualities in Swing
Trading. You must also have a handsome amount of capital to increase your
portfolio size as in cash trading no margins are there and taking loan from
friends and relatives is not a good idea. So the ideal way is to increase your
capital by salary, freelancing or business and trade with that extra money. By
extra money I mean you don’t need that money for minimum 3 yrs as markets can
move sideways also for a long time. It can also happen you invested in a share
and that does not move for 1 or 2 years so we have to be ready for that. If you
aim to find multibaggers and handsome returns on your share invested you must
have a strong heart to bear the drawdowns, sideways market, extreme pessimistic
environment and a lot of patience.
So to master Swing Trading with clarity and confidence all
the above mentioned points should be followed. It is the least stressful trading
and also gives you a lot of time to do some other venture. It is also suitable
for salaried folks as research can be done after market hours and you don’t
have to stick to the screen all day. Also this segment have lower transaction
costs and the number of trades are less compared to intraday and F&O. Lastly
you have to be in the market and not blow up your capital to reap full benefits
of the market. Remember Swing Trading is a marathon, not a sprint.
PS : More detailed blogs will be uploaded on Swing Trading regarding strategies and mindset. Check our website DHANVIMARSH for more blogs on Finance and broad market commentary.
Prepared By
Milind Dixit
Kanpur
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contact@dhanvimarsh.in
dhanvimarsh@gmail.com