Swing trading for beginners transcript
0 likes406 views
This document provides swing trading tips for beginners based on the author's observations of new traders. It outlines two major mistakes made - ignoring correlation between related stocks and using too many indicators. The author advises traders to only trade unrelated stocks to avoid doubling their risk, and to stick to only a few basic indicators like exponential moving averages and RSI until becoming profitable. Overall, the tips are meant to help new traders avoid common pitfalls and protect their capital.
Swing trading for beginners transcript
- 1. Stock Swing Trading For Beginners 1. Title Slide 2. Good Day Traders, This is Roger Scott and today we are going to discuss some important swing trading tips for beginners. 3. These tips are based on my personal observations over the past few months. I have recently been doing some live workshops and witnessed consistent patterns emerging from traders who just started transitioned from paper trading to real time swing trading. 4. The first issue I noticed is traders were ignoring correlation rules. You have to remember that correlation is very high between related stocks and ETF’s. 5. Look at these two charts, the first stock chart is LOGI and the second one is CETV, you can clearly that they are trading very close to one another. 6. Without getting into advanced topics, these stocks have a positive correlation of about 90 percent. These are two separate companies and are not connected in any way other than being in a similar industry group. 7. The point is ……trading stocks that are in similar industry groups or ETF’s in the same sectors will cause you to double your risk. Don’t believe for a minute that you are “diversifying or spreading
- 2. your risk”, the only thing that you are doing is doubling the size of your position. 8. I made a similar mistake when starting out trading several technology stocks in the same direction. These stocks had a correlation close to 80 percent and I believed that I was diversifying by trading them simultaneously. Avoid this mistake by trading stocks or markets that are totally unrelated to each other. 9. The second biggest mistake that I noticed was traders were using too many indicators. This is something that is quite common with new traders. You want to try every tool in the box to see which one works best. 10. My advice is to stick to a few basic indicators till you develop a solid understanding and become profitable and confident in your trading abilities. 11. Indicators are tools to help you make better decisions; they are not magic formula’s that can predict the futures. You have to use common sense and not overcomplicate market analysis. 12. First determine if the markets are in a trending mode or choppy mode, there is a video that discusses this that I have previously put together, please refer to it for some ways to determine the current market environment.
- 3. 13. Once you figure out the current market behavior apply either a simple trend indicator such as a exponential moving average 14. Or if the markets are choppy, try using a simple oscillator such as a RSI in combination with simple support and resistance channel lines. 15. Don’t make common mistakes, avoid these traps and protect your capital. 16. That’s it for today’s video, thank you for watching, and please subscribe to our channel If you would like additional information and free swing trading report, visit our website at MarketGeeks.com 17. This is Rogers Scott wishing you the best from everyone at Market Geeks.