If you’re looking for high-probability swing trading strategies, your search ends here. VectorVest has helped investors like yourself outperform the S&P 500 for over 22 years now – bringing in over 10x the return. The best part? You’ll work less to achieve this than with traditional trading tactics!
Today, we’ll introduce you to the highest probability swing trading strategies you can leverage in your strategy. Whether you’re a complete beginner looking to get started swing trading or you’re a seasoned expert looking to fine-tune your strategy and earn better returns while minimizing losses – you’ll find what you’ve been missing here on this page.
Before we share our favorite strategies with you, let’s discuss the importance of using high-probability strategies as a swing trader.
Why You Need High-Probability Strategies for Swing Trading
Risk is an inherent part of swing trading. You’re going to lose trades throughout your career. The goal, however, is to minimize those occurrences as much as possible so your time and capital is consistently spent on profitable endeavors. And that’s where high-probability strategies come in.
These tactics are designed to minimize the risk that swing traders take on. Through high-probability strategies, you can set yourself up for success by making better decisions on which opportunities to pursue, and when to enter or exit a position. This helps minimize losses (both in terms of frequency and size) while maximizing profits.
What You Need to Know About These Strategies
Before we introduce you to our top high-probability swing trading strategies, we need to set the stage and provide a bit of background information, along with some advice on incorporating these strategies into your game plan.
They’re Boring – But That’s What You Want
Using the strategies we outline below isn’t going to be anything exciting or groundbreaking. But that’s what you want – proven strategies based on tried-and-true principles that have worked for decades. While the manner in which you’ll use these strategies is unlike anything you’ve ever seen or tried before, the underlying principles behind them are as old as time.
Speaking of boring, let’s talk about a mindset shift you’ll have to make if you’re looking for huge returns on every trade…
You’ll Sacrifice Some Profit Potential for Consistency & Peace of Mind
When looking for high-probability strategies for swing trading, you’re going to give up some profit potential – because these strategies are inherently a safer approach to trading. If you want higher profits, you’re going to have to take on more risk – and your probability of enjoying success, in the long run, may drop.
For these strategies, we recommend you take profits at 3-5% or sooner – and set stop losses at 1-2% losses. This will protect your portfolio in the long run. And while this may not seem like a great way to earn swing trading profits, these small wins start to snowball and add up in the long run. This is how the most successful swing traders think – and if you want to follow in their footsteps, you need to start thinking the same way.
You’ll Need an In-Depth Understanding of Swing Trading Basics
If you came here with no prior knowledge of what swing trades are and haven’t taken the time to learn swing trading from the inside out, we recommend you do so first. While these strategies are simple enough that anyone can employ them, knowing the basics of swing trading strategies is still paramount to seeing success.
We have a database of value-packed courses here on our website that can help you speed up the learning curve and hit the ground running. You can also learn about the best indicators for swing trading in our blog – as a few of these strategies will rely on things like moving averages.
Keep Market Sentiment in Mind
High-probability swing trading strategies also involve taking into account stock market sentiment. There are certain market conditions that are unfavorable – and even the highest probability strategies for swing trading will fall short.
Fortunately, VectorVest makes it easy to keep an eye on how the market is performing on any given day – so you can make plays during good times and sit on the sidelines cautiously during tumultuous periods. More on that later.
Keep Risk Low With Stop Losses, Take Profits, & Emotionless Decision Making
Importantly, high-probability swing trading strategies also entail having proper risk management procedures in place to ensure that losses are minimized should a trade go against your expectations.
Yes – your probability of success is higher by following these strategies. That doesn’t mean you won’t still face the occasional loss or miscalculation. Thus, you need proper measures in place to keep losses low.
For example, you can set stop loss orders at predetermined points – this will prevent you from getting stuck in a sinking stock, which could lead to costly account blow-ups. You should also set take profit orders modestly. A consistent 3-5% return on your money is better than getting greedy, hoping for 10% only to see the stock drop overnight to the red. This is something you can learn more about in our article on when to cut losses on stock.
Similarly, you should follow simple money management techniques such as diversifying investments across different markets or sectors. By following this advice, you can limit your downside exposure while aiming for higher returns from your trades. And with all that said, here are three high-probability swing trading strategies you can follow yourself.
3 High-Probability Swing Trading Strategies You Can Try Yourself
Now, it’s time to get into the meat and potatoes of today’s discussion – the best high-probability swing trading strategies you can try yourself. The first two are great. The last one, however, will transform the way you look at swing trading – and it can even be used to supercharge the first two strategies!
Whether you’re a complete beginner or a grizzled vet. You’re not going to want to miss it! Let’s get to the basics first…
Ride the Uptrend on Short-Term Price Increases
The very principles of swing trading are identifying a short-term upswing in a stock’s overall price trajectory, and getting in and out before that trend subsides and reverses. Simple enough, right? Yes, but by no means easy – unless you know how to spot an upcoming trend and time your entry and exit to perfection!
As we mentioned earlier, this is easier when you pair the third strategy on this list with this one. Step one is finding the right opportunity – which will require you to have a good understanding of momentum indicators. By finding stocks that look to be undersold or undervalued, and that looks to be rising in value, you can get in early before that short-term trend flattens out or reverses.
This is something you can learn more about in our article on how to find stocks to swing trade. But it’s not too difficult – you’ll typically rely on a moving average for this strategy. You can go with any MA you like using most, but many traders prefer the 50-day moving average.
When looking at a long-term time-frame chart (at least 2 years), watch for a bullish price rejection at the 50-day moving average. Should that rejection occur, it’s time to make your entry and look for your exit. A stop loss and take profit order should be put in place – modestly, of course – to ensure high-probability outcomes. Many times, you’ll be able to ride this trend and get solid returns by exiting just before the trend reaches resistance.
Fade the Dip With Short Selling
The strategy above has a high rate of probability when followed strictly. As you can see, you make your profit along the uptrend. But as you know, you can make money even when stocks are dropping in value – which is known as short selling. How does stock shorting work, though? You’re basically borrowing a stock from a broker, selling it high, and buying it back later at a lower price.
By doing this you’re actually making money off of the dip in the stock’s value – which is why it’s also known as fading the dip. Now, this isn’t for everyone, especially beginners. It requires an understanding of the fundamentals of the stock, as well as risk management.
As for what you should look for when shorting stocks, high-volatility and high-volume stocks are usually great candidates. This is because they tend to move a lot in both directions – so it’s easier to make money on them when they dip down.
Find an opportunity with ample momentum and watch for the price to hit resistance and move past it, creating a new high. At this point, you’ll want to watch for a strong price rejection – this is where you’ll go short. Then, it’s just a matter of letting your strategy manifest itself in a return to the support, at which point you’ll capture profits.
Don’t wait to take profits at the bottom, as this could result in a strong uptrend back toward the new resistance – causing you to miss your window. Remember – these high-probability strategies require you to trade conservatively, taking modest profits and setting strong stop-losses.
The Highest Probability Swing Trading Strategy: Introducing VectorVest
Now, these two strategies have worked for countless traders – and they can for you too. But what if there was an easier, more foolproof strategy that allowed you to consistently earn profits and keep your losses small and infrequent? One that eliminated any sort of human error or emotion that could cut into the probability of success?
As a matter of fact, there is. At VectorVest we have developed our own proprietary system that can help you identify high-probability trades with greater accuracy than traditional methods alone! The best part? It takes a fraction of the time that traditional strategies do. No more hours in front of your screen tracking moving averages or setting up screeners. Our stock analysis software does the heavy lifting so you can just press a few buttons and earn high profits – consistently.
VectorVest has come to be known as the best swing trading platform because it simplifies everything for you. You are told everything you need to know about an opportunity with just three simple ratings: relative value (RV), relative safety (RS), and relative timing (RT). Together, these contribute to an overall VST rating – and based on that rating, you’re given a clear buy, sell, or hold recommendation. It doesn’t get any easier and higher probability than that!
The best part is you are given winning opportunities day in and day out. Our pre-configured stock picks feature the best stocks to swing trade on any given day. Just pull up the picks each morning, find opportunities that align with your strategy, and find your entry and exit. It’s really that easy.
You can even bring your investments on the go with our mobile stock advisory app – so you never have to miss a day of trading even when you’re away from home. What more could you ask for? Get a glimpse of how much easier and more accurate trading can be with a free stock analysis today.
Ready to Transform the Way You Trade?
Now that you know the highest probability swing trading strategies, the only thing left to do is get our VectorVest account set up and transform the way you trade forever. Once you see the difference firsthand, you’ll look back and wish you’d found it sooner!