FAQs

What types of trading setups do you look for?

I look across multiple timeframes for potential setups that will bring momentum back into a stock. As this is a swing trading service, I mostly focus on setups on the intermediate timeframes (i.e. 15-minute chart) that align with the primary trend on longer-term timeframes (i.e. daily chart).

What indicators do you use?

Over the years, I’ve found the most powerful indicators for my trading strategy are the combination of Simple Moving Averages across multiple timeframes with Anchored VWAPs (Volume Weighted Average Price). This allows me to identify shifts in control from buyer-to-sellers or sellers-to-buyers as well as alignment of trends across multiple timeframes.

Where do you set your stops?

Initial stops are always considered before entering a trade and will be placed below the most relevant recent low. I typically look to place stops below a 5-day MA (when trading the long-side) and/or a relevant VWAP to give the stop some protection.

When in a trade that’s working, I will adjust my stops under the relevant higher-lows.

How do you determine risk? How many shares should I trade?

Rick management should be our top priority and always determined before entering a trade. How much risk you put on is a personal decision and should be consistant. Once you know how much you’re willing to risk per trade, you’ll be able to determine the amount of shares to buy or sell per trade.

For example, you have a $25,000 account and you’re willing to risk 2% per trade (or $500). When considering a potential swing trade with an entry at $24.50 and stop at $23.10, you’ll be risking $1.35 per share. With your risk parameters, you’d be able to buy about 370 shares.

$500 / ($24.50 - $23.10) = 370 shares

Some exceptions here — if you’re looking to trade a “riskier” stock, like a biotech, you may want to consider trading a smaller share size. And if you’ve found an A+ setup, you may want to consider putting on a little more size, like 1.5x your typical risk.

Do you take partial profits on open positions?

Yes, if the opportunity presents itself, I always look to lock in some profits and reduce my overall risk. If a stock runs quickly, I might look to take one-third off at Daily R2 or R3 (Pivot Point indicator). For the rest of the position, I will adjust my stop(s) under the higher-lows to let the trade develop.

When is a setup no longer valid?

If a stop is violated before the entry price, the setup has changed and is no longer valid. Or if a stock gaps above the entry price, this would also change the setup parameters and make the trade invalid.