In Swing Trading For Dummies, Omar Bassal introduces you to the strategies and techniques of the swing trader. Moreover, he cover topics given short shrift in some trading textbooks — topics that largely determine your swing trading success. For example, whereas many textbooks focus on chart patterns and technical indicators used in buying or shorting stocks, this book goes one step further to cover the importance of money management, journal keeping, and strategy planning. Although these subjects are less glamorous than looking at charts, they’re actually more important — because even exceedingly skilled chart readers will fail if they devise a flawed system, take unnecessary risks, and don’t learn from their mistakes.
This book has five main parts. You may not need to start at Part I and proceed from there. You may be better served beginning at Part II or Part III if you already know the basics of swing trading. For that reason, I explain the five parts as follows so you can determine which part or parts you need to focus on.
Part I: Getting into the Swing of Things: Swing trading can be a rewarding endeavor for those who have the time and interest in trading securities over the short term. But you need to pack your backpack before you set out on the journey. Part I helps you do just that. This part introduces you to swing trading and provides an overview of the investment landscape. You also discover the brokers that cater to swing trading and the two main trading strategies (fundamental analysis and technical analysis).
Part II: Determining Your Entry and Exit Points: Technical Analysis: Swing traders rely heavily on technical analysis: the art and science of trading securities based on chart patterns and technical indicators. But it’s easy to get lost in the world of technical analysis given how many different chart patterns and indicators exist. When should you use this indicator over that one? Part II explains the ins and outs of technical analysis for everyone from the neophyte to the market expert.
Part III: Digging Deeper into the Market: Fundamental analysis is given short shrift in most swing trading books, but I introduce you to the important fundamental measures you may be overlooking. Fundamental analysis doesn’t have to be a scary science that only institutions use to their advantage. You, too, can profit from simple fundamental ratios and measures. In this part, I cover the basics of financial statements and the criteria you can use to screen for under or overvalued stocks.
Part IV: Developing and Implementing Your Trading Plan: Your trading plan is your map in the swing trading world — or your GPS, if you prefer to have directions read to you. Your trading plan outlines what you trade, how often you trade, how many positions you own, and so on. In creating your plan, you must decide how much to risk on each position and when to exit (for a profit or a loss). You also need to know how to calculate your performance so you can tell whether you’re ahead or behind the overall market.
Part V: The Part of Tens: The Part of Tens includes “Ten Simple Rules for Swing Trading.” Stick to these rules and you’re unlikely to make any major mistakes that take you out of the game. But you need to know more than what to do; you must also know what to avoid at all costs. “Ten Deadly Sins of Swing Trading” covers ten “sins” that are sure to lead to subpar performance. Maybe not today or tomorrow, but eventually, these sins will catch up with you. And what would a book be without an appendix? In this book’s appendix, I recommend several valuable resources you should use to help you with your swing trading.
- Swing Trading from A to Z
- Understanding the Swing Trader’s Two Main Strategies
- Getting Started with Administrative Tasks
- Charting the Market
- Asking Technical Indicators for Directions
- Analyzing Charts to Trade Trends, Ranges, or Both
- Understanding a Company, Inside and Out
- Finding Companies Based on Their Fundamentals
- Six Tried-and-True Steps for Analyzing a Company’s Stock
- Strengthening Your Defense: Managing Risk
- Fine-Tuning Your Entries and Exits
- Walking through a Trade, Swing-Style
- Evaluating Your Performance
- Ten Simple Rules for Swing Trading
- Ten Deadly Sins of Swing Trading