Video summary

Time for patience! -Swing Trading School first hour or so-

Main summary

Key takeaways

Finance

Time for patience! - Swing Trading School first hour or so

Markets & Macroeconomic Context

  • The market is currently in a “shopping period”, trading near highs but lacking strong momentum or clear setups.
  • Moving averages play a critical role in trading decisions:
    • When the 10-day moving average is below the 20-day moving average and both slope downward, breakout trading tends to be ineffective; better to stay out.
    • When the 10-day moving average is above the 20-day moving average and both slope upward, it is an ideal time to trade aggressively and grow accounts.
  • Patience is emphasized: waiting for the right setups during sideways or weak market periods is crucial.
  • The presenter discourages trading slow, low-volatility stocks, especially those with low Average Daily Range (ADR).

Trading Strategies & Methodologies

Swing Trading Setup Criteria

  • Focus on stocks with high ADR (preferably above 5).
  • Use a dollar volume cutoff of at least 5-10 million USD daily volume to avoid illiquid stocks.
  • Look for clean price action setups involving tight consolidations near key moving averages (10-day, 20-day, 50-day).
  • Avoid choppy, slow, or “random” stocks without clear trends.
  • Entry typically occurs early in a breakout, ideally as the stock breaks out of its range.
  • Use strict stops and obey them to manage risk.
  • Recognize when breakouts are unlikely to work (e.g., during down-sloping moving averages).
  • Use multiple timeframes (e.g., 60-minute charts) to confirm setups.

Shorting

  • Shorting is harder and riskier than going long.
  • Recommended only for traders with larger accounts (several million USD).
  • Look for stocks with parabolic moves losing momentum and breaking support levels.

Volume & Liquidity

  • Emphasized importance of scanning for stocks with sufficient dollar volume and ADR.
  • Suggested method to set up scans in TC2000 with filters for dollar volume, ADR, and ranking gainers over 1, 3, and 6 months.

Moving Averages

  • Use 10-day, 20-day, and sometimes 50-day moving averages as dynamic support/resistance.
  • Stocks “surfing” these moving averages and building tight bases are potential setups.

Risk Management

  • Use tight stops especially on volatile stocks like Tesla.
  • Avoid trading slow movers or stocks with low liquidity.
  • Stay out of the market during non-ideal conditions (moving averages sloping down).

Position Management

  • Adjust position size based on market conditions and stock behavior.
  • Add to positions on confirmed setups; reduce or cover when momentum fades or stops hit.

Trading Tools

  • TC2000 recommended for scans and charting.
  • ADR formula shared for custom scanning.
  • Free or low-cost versions of TC2000 available (~$25/month).

Performance Metrics

  • ADR (Average Daily Range) is a key metric to identify volatility and tradability.
  • Dollar volume filters ensure liquidity.
  • Ranking stocks by gainers over 1, 3, and 6 months helps identify momentum leaders.

Examples of Stocks & Sectors Mentioned

  • Tesla (TSLA): Main watch; strong momentum; gap up on stock split news; short and long setups discussed; tight stops used.
  • Square (SQ), Fiverr (FVRR): Weak momentum; potential pullbacks; short positions on Fiverr.
  • NVAX (Novavax): Short candidate with large downside potential; significant recent volatility.
  • Overstock (OSTK): Short with expectations of pullback to $60-$70; monitoring for breakdowns.
  • Pinterest (PINS): Potential long setup forming; strong volume after earnings; possible breakout next week.
  • Spotify (SPOT), GSX, MRNA, Peloton (PTON), Amazon (AMZN), Apple (AAPL): Various momentum and setup notes.
  • Biotech stocks: Generally slow and risky; avoid small/micro-cap biotechs unless large account and liquidity.
  • Other tickers mentioned: TQQQ, NVAC, Tiger, Workhorse (WKHS), Silo, TTD, SCGD, PDD, and more.

General Advice

  • Trade setups, not opinions.
  • Avoid low ADR and low volume stocks.
  • Use moving averages to time entries and exits.
  • Be patient; not every day or week will have good setups.
  • Avoid scalping; it’s inefficient and mentally draining.
  • Focus on momentum stocks with strong earnings and revenue growth for longer-term holds.
  • Shorting requires experience and larger capital.
  • Understand the market environment before trading breakouts.
  • Use stops religiously to avoid blowups.
  • Trading is simple but not easy; requires discipline and patience.

Explicit Recommendations & Cautions

  • Avoid trading stocks with ADR less than 5.
  • Use a minimum dollar volume cutoff of 5-10 million USD in scans.
  • Sit out when the 10-day moving average is below the 20-day and both slope down.
  • Use tight stops on volatile stocks like Tesla.
  • Shorting is for experienced traders with large accounts.
  • Do not trade slow or choppy stocks.
  • Breakouts only work in strong momentum environments.
  • Patience is key; wait for setups.
  • Scalping is discouraged.
  • Use TC2000 for scanning and charting.
  • Read the presenter’s blog and swing trading schools for detailed methodology.
  • Not financial advice; trading involves risk.

Methodology / Step-by-Step Framework for Scanning in TC2000

  1. Set dollar volume filter > 5-10 million.
  2. Create custom ADR condition (formula shared by presenter).
  3. Scan for ADR > 5 (or 6 for smaller accounts).
  4. Rank stocks by % gainers over 1 month, 3 months, and 6 months.
  5. Adjust filters to get 40-60 candidates per scan.
  6. Focus on stocks with clean setups near 10-day and 20-day moving averages.
  7. Look for tight consolidations and breakout points.
  8. Use multiple timeframes to confirm setups.

Disclosures / Disclaimers

  • The presenter emphasizes the need to do personal work and study patterns.
  • This is not financial advice.
  • Trading involves risk and potential for loss.
  • Shorting is riskier and not recommended for small accounts.
  • The presenter has experienced multiple blowups early in his career.
  • Viewers are encouraged to obey stops and risk management rules.

Presenters / Sources

  • The video appears to be a live or recorded session from a swing trading educator/trader (name not explicitly stated).
  • Mentions “smiggy” (community member or chat participant).
  • References “daveydaytrader” as a market indicator.
  • The presenter uses TC2000 and shares personal trading examples and positions.

Overall, the video is a detailed swing trading session focusing on market context, scanning methodologies, specific stock setups, and risk management, emphasizing patience and discipline in trading.

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