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Swing Trading: High profit and low risk
Most of my profits in investing are made using the strategy of Swing Trading. Defined by me, Swing Trading is holding the bought stocks for about six months. However, I have several chapters to hold stocks less than a month with incredible profits.
At the end of the holding period, evaluate the stocks again to determine whether you want to sell it or keep it longer. Last year, most of the stocks are kept for about a year, so they are qualified for the better tax treatment as long-term capital gains in my taxable account.
In addition, we can use swing trading shorter than that as illustrated in my momentum strategy and sector rotation strategy with the holding periods less than a month and even shorter periods for individual stocks described in the technical analysis.
These stocks should be fundamentally sound (i.e. value stocks). Hence they need at least six months for the market to realize their values. Select the holding period that fits your objective.
After six months, the fundamentals of the company, the sector that the company belongs to and/or the market may change. Hence, we need to evaluate and decide the ‘buy/hold’ decision. Sometimes, you may want to raise cash to buy another stock that has more appreciation potential than a stock you own. Churning the portfolio improves the quality of your portfolio.
Updated on 03/2015. 265 pages (6*9)
At the end of the holding period, evaluate the stocks again to determine whether you want to sell it or keep it longer. Last year, most of the stocks are kept for about a year, so they are qualified for the better tax treatment as long-term capital gains in my taxable account.
In addition, we can use swing trading shorter than that as illustrated in my momentum strategy and sector rotation strategy with the holding periods less than a month and even shorter periods for individual stocks described in the technical analysis.
These stocks should be fundamentally sound (i.e. value stocks). Hence they need at least six months for the market to realize their values. Select the holding period that fits your objective.
After six months, the fundamentals of the company, the sector that the company belongs to and/or the market may change. Hence, we need to evaluate and decide the ‘buy/hold’ decision. Sometimes, you may want to raise cash to buy another stock that has more appreciation potential than a stock you own. Churning the portfolio improves the quality of your portfolio.
Updated on 03/2015. 265 pages (6*9)
188 pages, Kindle Edition
First published January 17, 2014
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