Swing Trading Frameworks
The Bag - Advanced Level
Swing trading lives in the sweet spot between day trading and long-term investing. You hold positions for days to weeks, capturing 'swings' as stocks move between support and resistance. Unlike day trading, you don't stare at screens all day. Unlike investing, you're actively managing positions. Most people with jobs who want to actively trade should consider swing trading — you do analysis at night, set orders before the open, and check positions once or twice during the day.
A solid framework starts with identifying stocks in established trends pulling back to support. The classic setup: stock in an uptrend pulls back to its 20-day or 50-day moving average, shows signs of buyers stepping in (hammer candle, volume spike), then resumes the trend. Enter on the bounce, stop loss below support, target the previous high. The entry trigger matters — don't buy just because a stock is near support. Wait for confirmation. A stock at support can slice right through it.
Time management is critical because holding periods mean exposure to overnight and weekend risk. Always know the earnings calendar for any stock you're swinging. Sector rotation is your friend: identify which sectors show relative strength and focus there. If energy is leading and tech is lagging, swing trade energy. Ride the wave already moving. Also consider market context — swing trading works best in trending or mildly choppy markets. In a full downtrend, reduce size or sit on cash.
Building a repeatable routine turns occasional profits into consistent income. Every weekend, scan for setups: pullbacks in uptrends, breakout candidates, stocks at key support. During the week, trail stops as trades move in your favor. Take partial profits at first target, let the rest ride. Keep a trading journal documenting every entry and exit. After 50-100 trades, review to find patterns — most swing traders discover two or three setups account for the majority of profits. Double down on what works.
Key Takeaways
Swing trading holds positions for days to weeks — ideal for people with full-time jobs
The core setup is buying trend pullbacks at support with confirmation of buyers returning
Always check the earnings calendar to avoid unexpected reports during your hold
Focus on sectors showing relative strength — ride the wave already in motion
Trail stops and take partial profits to lock in gains while letting winners run
Keep a trading journal and review after 50-100 trades to identify your best setups
