Finding Stocks For Swing Trading

You’re ready to dive into the world of swing trading, but where do you start? It’s not as simple as picking any stock and hoping for the best.

You’ll need a strategy, an understanding of the market, and a method for identifying the right stocks. Whether you’re a newbie or a seasoned trader, this guide will help you fine-tune your skills and possibly boost your profits.

trending stock swing tradingLet’s explore how to find the best stocks for swing trading.

Key Takeaways

  • Understanding market trends and conducting trend analysis is important for finding stocks for swing trading.
  • Using risk management strategies and understanding trading psychology are important when selecting stocks for swing trading.
  • Traditional methods for picking stocks for swing trading include analyzing trends, evaluating volatility, and considering the company’s fundamentals.
  • When determining what makes a good swing trading stock pick, it is important to consider technical analysis, establish effective stop loss and profit placements, and stay disciplined.

Understanding the Market Direction and Direction Bias

By determining the trend of the market, you’re taking the first step towards understanding directional bias. You’re looking into trend analysis, assessing market momentum, and understanding economic indicators. This is where your analytical, detail-oriented approach begins. 

That said, there are many people who ignore all economic data and focus strictly on the technical aspects of price.

finding stocks to swing trade

You’re analyzing trading catalysts, and factors that could significantly move the market. You’re utilizing technical analysis, studying past market data to predict future price trends. All these elements combine to give you a comprehensive understanding of the market and instrument you are looking to put risk onto.

Importance of Learning How to Find Stocks for Swing Trading

After understanding market direction, you’re now ready to dig into the importance of learning how to find stocks for swing trading, and within this process, timing is crucial. The selection of the right stocks is paramount since you need to find stocks that are making price moves.

It’s a blend of technical analysis and trading psychology.

Analyzing trends, price patterns, volume, and other market data helps in making better decisions. You’ll learn to employ risk management strategies, setting stop losses to protect your capital. By understanding trading psychology, you’ll control your emotions, ensuring they don’t cloud your judgment, and will keep you on the “objective” side of decision-making.

Lastly, focusing on profitable strategies like breakout trading, pullback trading, or using moving averages, keeps you focused on trading the fundamental movements of the market. These strategies, when effectively used, have rewarded traders for decades. It’s not about the number of trades, but the quality that matters.

Traditional Methods for Picking Stocks for Swing Trading

This is a list of four traditional methods of stock picking for swing trading.  From analyzing trends, sector rotation, evaluating volatility, and incorporating fundamentals you can build yourself a workflow on locating and trading stocks that are ripe for a trade.

Here’s a snapshot of these methods:

Method Description Importance
Analyzing Trends Monitoring market direction Identifies potential stocks
Sector Rotation Shifting investment among sectors Helps find high-performing stocks
Evaluating Volatility Assessing price fluctuations Predicts potential risk and reward
Incorporating Fundamentals Studying a company’s financial health Ensures long-term profitability

Determining What Makes a Good Swing Trading Stock Pick

Determining what makes a good swing trading stock pick isn’t just about the price, it’s also about understanding trends, trend strength and even, for some, the company’s overall health.

You’re not just looking at price and volume, but also oscillators, moving averages, and the map that is laid on in the price swings on the chart. Swing trading strategies involve buying and selling as the second leg of a price move as it begins.

You need to establish your stop loss and profit targets, taking into account market volatility. Trading psychology also plays a part. Don’t let fear or greed influence your decisions.

Stick to your trading plan, adapt to market changes, and always remember: a successful swing trader isn’t just reactive, they’re predictive.

Creating Stock Screeners

In creating stock screeners, you’re not just filtering stocks based on your criteria, but also saving yourself from the overwhelming number of stocks available in the market. Screener customization is vital to your success.

stock screeners

  1. Sector-Specific Screening: This helps you focus on sectors that align with your trading strategy.
  2. Technical Indicators Importance: They’re key in identifying patterns and trends.
  3. Swing Trade Filters: You’ll want to include volatility and liquidity filters suitable for swing trading.
  4. Market Cap Relevance: Large-cap stocks may be more stable, but small-cap stocks can offer high returns.

Validating Opportunities and Managing Swing Trading Stock Picks

While evaluating potential opportunities for swing trading, you’re not only looking at the stock’s current trends but also assessing its future potential based on various market indicators.

Risk Management Mitigate losses, protect capital
Profit Targets Set realistic goals for returns
Trading Psychology Maintain emotional control, avoid impulsive decisions
Position Sizing Determine how much to invest in a given trade
Entry Strategy Choose the right time to enter the market

Risk management is crucial to preserve capital. You’re setting profit targets to ensure you’re aiming for good returns but remember these are targets.  These are not guaranteed and you will need to manage your trades.

Trading psychology helps you keep a level head, as swing trading can be a roller-coaster of emotions. Position sizing aids in determining the appropriate amount to invest.

And your entry strategy? That’s all about timing. You’re making calculated, data-driven decisions to succeed in swing trading.

Swing Trading Candidates

This is a simple method to find stocks that are potential candidates for a swing trade.

One key detail is to look for young trends and not stocks that are extended.  If you choose to use extended stocks, ensure that you monitor your trades and exit when adverse price action sets in.


Look for stocks that have positive momentum.  While you can see it in the “strong price” action, using the MACD will also work.  Just look at the overall slope of the MACD indicator.

Trending price can be seen with a series of higher highs and lows for an uptrend.  Using a moving average will be a quick way to determine that as well.  Look for price to be moving above the average (this is a 30 SMA) and that the average is not snaking through the price.

Look for a price pattern such as a pullback or sideways range.  Using trend lines (dashed above) will highlight these moves and give you an entry point upon the break.  You can also set these criteria in the stock scanner of your choosing.

Frequently Asked Questions

What Is the Minimum Amount of Capital Required to Start Swing Trading?

Depending on trading account types and initial margin requirements, you’d typically need at least $2,000 to start. However, capital requirements regulations suggest having more for leveraged swing trading and portfolio diversification.

How Much Time Do I Need to Dedicate Daily for Effective Swing Trading?

You’ll need to dedicate at least 1-2 hours daily during the learning phase.  As you gain experience, you may only spend 20 minutes a day looking at charts and setting up your trades. It’s about balancing your trading lifestyle with other commitments for effective swing trading.

Yes, several trading platforms fit your swing trading needs. Look for platforms with robust features, user-friendly interfaces, low brokerage fees, mobile compatibility, and excellent customer support. Research and compare to find the best fit.

Can Swing Trading Be a Viable Source of Primary Income?

Yes, swing trading can be your primary income source. That will take you to have an effective trading strategy, trading plan, and enough capital to survive on.  Before embarking on the full-time aspect, ensure you consult a professional who can help you make that decision.

What Risk Management Strategies Should Be Employed in Swing Trading?

To manage risks in swing trading, you’ll need to implement a stop-loss strategy, apply diversification practices, and be always be mindful of position sizing. Also, consider your risk reward ratio and use hedging techniques.


Understanding the market’s direction and your bias is crucial in swing trading.  Educate yourself on traditional stock-picking methods and know what makes a good swing trading stock.

Utilize stock screeners to simplify your search and validate opportunities diligently.  Remember, swing trading isn’t just about picking stocks, it’s about managing them.

By putting the odds in your favor, you can increase your chances of successful swing trading.

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Author: CoachShane
Shane his trading journey in 2005, became a Netpicks customer in 2008 needing structure in his trading approach. His focus is on the technical side of trading filtering in a macro overview and credits a handful of traders that have heavily influenced his relaxed approach to trading. Shane started day trading Forex but has since transitioned to a swing/position focus in most markets including commodities and futures. This has allowed less time in front of the computer without an adverse affect on returns.