The stock trader has nearly a perfect trading world. Thousands of stocks to choose from, the safety that an account can’t go below zero, provided that you don’t use margin, and warrants and ETFs also available. Every time frame from daytrading to investing makes sense, and behind a stock is a company with a story to tell.
Stocks themselves are essentially like options without a limiting duration. Every stock has the potential to multiply its value by a large factor, but conversely it can’t go below zero. It is this asymmetry that should be eyed by everyone.
In reality so many are fixated on either slow moving mature stocks or otherwise disappointing ones. Why?
Naturally stock traders should be fascinated at most by the steepest trends and try to enter them by all means. It looks logical, but it is also said much easier than accomplished. What typically happens is this: In the moment you finally managed to get on the trend without being stopped out immediately, the trend magically slows down, begins to flutter or reverses so that again almost nothing was gained.
This is of course a simplification and it regularly happens differently. But all too often major trends get missed completely.
The answer may be to use swing trading methods specifically adapted to running trends and to preselect and concentrate on stocks with current and inflammable potential that already have begun to show price strength.
Arguably swing trading in the trend yields better results, even if the primary goal is not to ride trends themselves. At least that is what I think about this system, which is usable for both, swing trading and trend investing.
You are a day trader? Try it nonetheless. Intraday movements are also better shaped and larger for stocks with long term potential. And who knows, perhaps you switch back to swing trading one day.