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How To Prepare For Swing Trading

The first step to a profitable swing trading is the preparation. If one is to start 

a journey, one will prepare oneself. One will check the departure or arrival times, 

weather, connections and the cost.  The same is true when one wants to swing 

trade successfully. That preparation is the foundation of the trade, and one can 

not bypass that.

How to prepare for swing trading step one

The first of the swing trading preparation is to check the market environment.
One will begin checking if the market is volatile, erratic, bullish, bearish, trending 

or too risky. Like a captain of a ship, one wants to check whether it is safe to set 

sail or come back another day.
In this instance, one is checking the SP-500 (the market), and asking if the market 

is offering a reliable bullish or bearish trading opportunity. Sometimes, there is 

nothing on offer, so one will stay one. Ask if there is good chance that one can get 

something good out of the market or not. Though, many think that process is not 

essential, failing to do so can force one to sweat as soon as one place the trade.

How to prepare for swing trading step two

The next step is to check the sector in which one wants to trade. Quite often, a 

swing trader will be busy trading bearish trading set-ups in a bullish sector, and 

wonders why a trading method that was working wonders before is no more 

delivering the goods. One should ride the sector's sentiment instead of fighting it. 

If the sector is very bullish and is not yet overbought, or due for a correction, focus 

only on bullish swing trading opportunities. In those circumstances, it makes sense 

to stay away from bearish trading set-ups. A bullish sector is attracting money 

inflows, and one will be better off selling financial instruments that belong to a sector 

where there is an outflow of money. A sector where there is money outflow is usually 

the one where many financial instruments are overbought or surpass multiple times 

their true values.

How to prepare for swing trading step three

The third step consist of checking the sector's market leaders. Whatever you do, please 

do not bypass the step three.
In many instances, the market and sector can stay bullish but the market leaders can 

drag down the sector's components when they become bearish. In fact, a sector will 

not rise if the leaders are bearish and vice versa. They are the engines of the sector. Do 

not continue to place multiple bullish swing trades if you notice that the leaders are not 

offering any bullish trading opportunities. Moreover, those who are trading indices should 

always keep eyes on the leaders of the indexes at all times.

How to prepare for swing trading step four

It is almost impossible to catch home run stocks if one does not know how to analyze 

the trading volume.
One of the advantages of analyzing the trading volume is to spot the activities of the 

most influential market participants such as the hedge funds and investment banks. 

Usually, they are the first buyers or sellers. Their activities can cause a financial 

instrument to trend for weeks, months and years.
Those trending securities provide reliable source of profit for both the avid investors 

and swing traders.
Therefore, it is beneficial for a technical swing trader to analyze the trading volume 

during the swing trading preparation.

How to prepare for swing trading step five

It took me years to understand that a technical trader must combine the technical and 

fundamental analysis without disregarding the economy news. A swing trader will 

minimize the risk and reduce losses from the get go if he or she is doing the following 

before implementing any swing trading strategy.
1/ Check the economic news relating to the financial instrument.
2/ Also check the economic news relating to the peers of the financial instrument and 

market leaders.
3/ Perform Google acid test.
4/ Complete a viable fundamental analysis.

How to prepare for swing trading step six

At this stage, one wants to focus on the technical analysis of the financial instrument 

that one wants to trade. It is paramount that one does not just want to place a swing 

trade, but to find a real reliable swing trading set-up that offers a nice risk-reward ratio. 

Be a more composed
swing trader. Be ready to walk away from the set-up if it is more likely to cause losses 

than profit. Remember the last time, you enter a swing trade and wish you do not have 

anything to do with the ensuing stress or headache. It is not worthy.
One will be more forgiving to oneself if at least one had been more defensive or selective. 

Note that there is always a better swing trading signal right in the corner waiting for you.
Therefore, one wants to verify that one has truly found a high probability trading set-up 

that one understands or masters.

How to prepare for swing trading step seven

The seventh step for the swing trading preparation is to set a suitable time and date when 

one can safely enter the trade without too much hassle or volatility. This step is not set in 

a stone; so be flexible and only follow through it is helpful to your swing trade.
Personally, I do not like to enter a swing trade on Mondays or Fridays. I also avoid splashing 

swing trades in January, December, or first eight days of a month.

How to prepare for swing trading step eight

This is the last step for a swing trader that do not want to leave anything to chance.
One of the problems that many swing traders are facing is the inability to sell in the financial 

markets. Generally, most common traders are bullish market participants.
This is normal because the natural progression of the market is up. Financial markets go up 

more than they fall, but there are always financial instruments that are overbought or distress 

due to weak fundamentals.
Moreover, if the market is bearish, it is not reasonable for one to adopt a bullish swing trading 

strategy. For those reasons, it makes sense to get ready to sell or buy at any time. To do so, one 

must have two watch-lists.
One ought to prepare both bullish and bearish watch-lists. The bullish watch-list regroups bullish 

high probability financial instruments and the other is a compilation of bearish stocks, currencies, 

commodities and indices.

Quite often, a swing trader may be fixated in taking bullish swing trades, and end up losing just 

because he or she does not know how to sell. It will be better for that swing trader to avoid placing 

a bullish trade in those circumstances where the bearish traders become dominant in the financial 

markets. One ought to bear in mind that the financial markets' cycle is formed of trending and 

corrective phases. The market may stay bullish for years, but there will a harvest time when 

securities surpass more than five times their book values. Even during the trending phase there are 

minor corrections.
Without doubt bullish and bearish swing trading watch-lists will help a swing trader to get ready for 

both bullish and bearish trading opportunities that may arise.


A smart swing trader is the one that has a plan. As Mr Warren Buffet said, the first rule is not to lose, 

but the second rule is not to forget the first rule. Indeed, the preparation for swing trading will assist 

a swing trader to avoid or minimize swing trading losses.
For a beginner swing trader or those that are still trying to polish their swing trading, it is 

recommendable that one does not overwhelm oneself by trying to master those swing trading 

preparation steps in one day. One should try instead to master them one step at a time without taking 

too much on at the same time.
Make a decision to apply the swing trading preparation, but give yourself enough time to achieve that 


Preparation For Swing Trading Test

1/ How many steps are there for a thorough swing trading preparation?
2/ How much time should one give oneself for mastering the swing trading preparation if one is a beginner 

swing trader?
3/ Why will it be more detrimental to oneself to try to master the swing trading preparation too fast and 

too soon?
4/ What is a bullish swing trading watch-list?
5/ What is a bearish swing trading watch-list?
6/ What is the advantage of preparing both bullish and bearish watch-lists?
7/ What are the reasons why it is beneficial for a swing trader to analyze the trading volume in the stock 

8/ Name the market leaders for both NASDAQ-100 and Dow 30.
9/ Why should a swing trader avoid selling in a bullish sector?
10/ why should one avoid taking bullish swing in a bearish sector?
11/ What is a dominant force in the financial markets?
12/ What is the market?