Reality of Swing Trading Is Sometimes You Lose Money
Swing trading is a popular form of trading on the stock market, and Webull is a great platform for it. However, it is important to understand that swing trading is not a guaranteed way to make money. In fact, it is possible to lose money when swing trading. This is because the stock market is unpredictable and can move in unexpected directions. It is important to understand that there is always a risk of loss when investing in the stock market, and swing trading is no exception.
In order to minimize losses, it is important to have a good understanding of the stock market and the risks associated with it. It is also important to have a good strategy in place to help manage risk. This includes setting stop losses and taking profits when they are available.
Minimize Losses By Stop Loss And Getting Out Of Losers Quickly
One of the best ways to minimize losses when swing trading on Webull is to set a stop loss. A stop loss is a predetermined price at which you will sell a stock if it drops below a certain level. This helps to limit losses if the stock market moves in an unexpected direction. It is important to set a stop loss that is realistic and in line with your risk tolerance.
In addition to setting a stop loss, it is also important to get out of losing trades quickly. This means that if a stock is not performing as expected, it is best to cut your losses and move on to the next trade. This helps to minimize losses and keep your portfolio balanced.
That doesn’t mean you must be completely done with a stock. I’ve jumped in stocks that I thought was near the bottom and jumped out when it went lower than expected just to jump back in to make larger gains. I’ve shared a typical month as a swing trader to show that you’re not always going to have a good day in the market. And when you swing trade you must understand that sometimes your wrong and lose money.
A big mistake I see new swing traders make is the same mistake I see people make at the Blackjack table in the casino. Throwing more money at the problem instead of staying consistent. Yes, I like blackjack too. You see I’m not lucky at all Blackjack is skill and strategy and if you stay consistent the odds are in your favor. Guy at blackjack table betting $10 loses so next hand he bets $25 and loses again. There is similarities and these same mistakes both at blackjack and trading stocks.
Just like with blackjack if you stay consistent with your strategy and understand the rules you have a very slight odd in your favor. Make good trades you have even better odds using the same consistency. Example being knowing when the dealer has a bust card and not hitting even if you’ve been dealt a 12. There are more 10s in deck than anything. Here you have the odds in your favor when the dealers rules says he must hit on 16 and below. Another blackjack strategy is staying consistent on always splitting those Ace’s and 8’s. And for god’s sake bet the same every time and allow those chips to stack up.
Taking Profits When You Got Them
When swing trading on Webull, it is important to take profits when they are available. This means that if a stock is performing well and you are making a profit, it is best to take the profits and move on to the next trade. This helps to maximize profits and keep your portfolio balanced.
Depending on the price per share and what I’m working with for available funds I might buy 100s or 1000s of shares at a time. Soon as my order is filled for the shares I wanted I already know what I want to start selling at. Usually for example if I buy 1000 shares I’m going to sell at least 700 or 800 of them at 5-8% profit using limited sell orders for set price. Then I might put sell orders staggering up for the remaining shares at a few different increments.
Yes it hurts when you sell for 8% profit only to watch it go up 200%. If you seen some of my screenshots of many different trades where I have 100% gain or more its important for you to know that I was selling all the way up. I once made 13k off of SNDL stock. I had like 47k shares at around .27 and it went to $4. Sadly I sold 95% of those shares before it hit $1 and probably all of it before hitting $2. That could’ve been life changing for me but was I wrong? No. You are never wrong locking in profits.
Another strategy if I like a stock set up is I’ll keep a very small amount of shares that is what I like to call house money because I’ve already locked in the profits to where what I’m keeping is free. If it goes down from there I don’t really lose because I’ve already won. And if it goes up great, I just added more to my gains.
It is also important to remember that the stock market can move in directions. This means that it is important to be prepared to take profits quickly if the market moves against you. If you are day trading during regular market hours a small float stock with great news will likely get halted up and down. Those halts can quickly trap you. But in the premarket and afterhours trading window there usually is no halts unless its for news. But there is still a lot of risk because of the lack of volume in premarket and afterhours.
I like trading premarket but usually out before regular market open when I’m doing day trading. This helps to minimize losses and maximize profits. A lot of stocks get pumped up in the pre-market just to buy put options in the regular market and it gets shorted down so keep that in mind.
Conclusion: Making the Most of Swing Trading on Webull
Swing trading on Webull can be a great way to make money, but it is important to understand that there is always a risk of loss. In order to minimize losses and maximize profits, it is important to have a good understanding of the stock market and the risks associated with it. It is also important to set a stop loss and take profits when they are available. By following these tips, you can make the most of swing trading on Webull and maximize your profits while minimizing your losses.
I don’t like swing trading or day trading on Robinhood because it has lack of tools needed quickly to make quick decisions for jumping in and jumping quickly. So if you’re trying to learn day trading and swing trading I suggest using Webull’s paper trading to practice and when your ready the charts and tools you can quickly review on Webull beats Robinhood hands down.