EP 118: Day Trading, Swing Trading, And Investing

I want to talk about the mindset, the strategy, and the tactics behind the three most popular methods of investing in the market: day trading, swing trading, and investing. 

Let's get into it. 

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One of the questions I get a lot is "how do you decide to get back in the market after you've taken a loss?" 

You have to understand the game you are playing. The score we are keeping is for money. If we are right, we "win" money. If we are wrong, we "lose" money.

There are going to be wins and losses. 

Knowing the game you are playing and having the right mindset is the first step. Having a game plan and following it is the important second step.

When you think about day trading, you're looking at the chart or stock movement for the day. 

So you will ask, "are we looking for the stock to go up or down?" If you are up for the day, whether it is $50 or $500, you hit your goal. 

We don't want think about the possibilities. The advantage of day trading is to look at the momentum of the stock and make some money today. 

Your goal is to ride the daily momentum until it changes. You want to make however much money you can before it stops.

You want to be aware of when the stock is slowing, or going back down, so you can get out for the day and be done with the trade. 

Swing trading focuses on a short to medium time frame, from about a week to three months. The goal is to be out of a swing trade before earnings come out, because this can change how the stock is going. 

Similar to day trading, we want to find the pattern. It doesn't need to be a daily pattern. Is the stock going toward the top or bottom, but may not be there today, at this very moment? 

We are trying to catch the next "swing" to the upside or downside. With this strategy, we have some time to catch the stock at the right time. 

This gives you enough time to see if what you think is happening on the chart will play out. If something changes as soon as you buy, you have time to see if it will change back.

Investing is a long term strategy for about one to five years. 

Investments give you the freedom to not have to worry about the day-to-day fluctuations in a stock. No need to stress about getting in and out within a short period of time. 

Long term investing gives you the security of placing your money somewhere and just letting it sit. 

Once you dictate which stocks are going to be investments, ones you want to sit for awhile, leave them alone. Once you start mixing up day or swing trading with investments, it can really mess up what you're planning. 

Investments require calm decision making and patience. 

Keep calm and let it play out. 

You have to remember what game you are playing. 

We don't need to make investing harder than what it needs to be. 

If you're looking to find out more information about these types of trades and potentially profit from the market, check us out at Power Trades University.