Swing trading is a great way to earn supplemental income on the side with just a few hours a week, or in some cases, replace your full-time job. It’s not nearly as stressful or time-consuming as day trading, yet it provides immediate returns unlike long-term investment strategies.
But consistent success requires a solid game plan for how to find stocks to swing trade? Fortunately, you’ve come to the right place to learn how to pick stocks for swing trading effortlessly – no manual analysis, no guesswork, just simple investing tactics that win you trades on autopilot.
Sounds too good to be true? It’s as simple as using our stock picker app here at VectorVest. It has outperformed the S&P 500 index by 10x over the past 20 years and counting and saves traders a ton of time and stress.
Rather than toiling with complex technical analysis and spending hours glued to your screen, pull up our swing trade scanner and let the opportunities come to you. No need to chase them! Then, read through the intuitive analysis for a buy, sell, or hold recommendation at a glance.
We’ll show you how to find stocks for swing trading the old-fashioned way but then give a quick tutorial on how much quicker, easier, and more profitable using the best stock analysis app for beginners and seasoned investors alike.
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Overview of Swing Trading
Swing trading is all about capturing short- to medium-term moves in a stock’s price, typically over a few days to a few weeks at most. You’re looking to ride momentum – buy when a trend is just beginning and sell before it cools off.
The goal is to stack consistent wins without the grind of day trading or the patience required for long-term investing. You’re not tied to fundamentals for months or years. Instead, you’re focused on price action, patterns, and timing.
That’s what makes swing trading accessible even if you only have a few hours a week. But, is swing trading profitable? It can be when you’re able to routinely uncover the best stocks to swing trade, and then, time your entry and exit to perfection!
Easier said than done, of course. Don’t worry, though. You’ll feel confident in your ability to execute this strategy by the time you finish reading this guide on how to find stocks to swing trade!
The Importance of Your Swing Trading Stock Pick Strategy
We don’t want you to take your swing trading stock pick lightly, because it can make or break your success in this investment strategy. The stock you buy is the entire foundation of your swing trade. Basically, there are three components to consider:
- Pick the right stock: You need a stock that wants to move. Strong momentum, clean patterns, and decent liquidity. Otherwise,, you’re forcing trades that just aren’t there.
- Get the right entry: Even the best stock can burn you if you’re late. A precise entry helps minimize risk and maximize your upside.
- Plan the right exit: Don’t guess. Know where you’re getting out – win or lose – before you even get in.
But it all starts with stock selection. You can’t fix a weak setup by “managing the trade better.” The better your initial pick, the less stressful the entire process becomes. So, let’s get into how to select stocks for swing trading below!
How to Find Stocks to Swing Trade Using Traditional Methods
You’re not worried about the long-term potential of stock when looking for your next swing trading stock pick. Your goal is to capitalize on those short-term swings in a stock’s price.
You may find your greatest opportunities in a stock that is slowly headed towards the bottom – as you can get in and out on the little pumps on the way down, earning profits each time.
So, learning how to find stocks to swing trade will rely primarily on stock technical analysis – not so much fundamental analysis. The best swing trading indicators differ greatly from those of day trading, long-term trading…you get the point.
So, with all this said, let’s get into the meat and potatoes of how to pick stocks for swing trading. We’ll begin with determining what makes a good swing trading stock pick for your unique strategy.
What Makes a Good Swing Trading Stock Pick?
Your criteria in finding stocks for swing trading may differ from the next person – and it mostly comes down to risk. We have an entire guide on how to manage risk in swing trading which goes over this in detail.
With that said, though, you’ll want to start evaluating what a “good opportunity” looks like for you. Maybe it’s an undervalued stock with great upside potential. Or, maybe it’s simply a volatile stock that keeps ebbing and flowing – and you don’t care about the actual fundamentals of the company.
Your preferences for a stock will dictate the best stock indicators for you to use. And from there, you can start to build out stock screeners. But in general, swing trading stocks need to have good liquidity, meaning they’re highly traded. This way you can buy and sell at the price you want without friction.
They also need to have momentum. A stock that bounces within too tight a range isn’t going to present you with any sort of buying and selling opportunities. That’s why volatility is so important for swing trading.
Like we said earlier, you can technically make money even though a stock is trending down in the big picture, as there are probably small bounces back up along the road to the bottom. As long as you have liquidity and volatility, a stock may be a good candidate for swing trading.
Creating Stock Screeners
A screener brings winning opportunities right to your doorstep. Maybe your screener is based on momentum indicators to help you find stocks with great timing. Or, maybe your screener is based on leading stocks in a certain industry or sector.
The specific screener you set up is dependent on your strategy. But for swing trading in particular, momentum-based indicators are typically your biggest asset. That’s because you’re just looking to capitalize on price swings – you don’t care too much about the actual performance of a stock.
So, maybe your swing trading screener is built with indicators like RSI, Moving Averages, Volume, Bollinger Bands, or Stochastic. You can learn more about the MACD settings we recommend in our blog. We also have tips on the best moving average for swing trading.
Once you’ve got your screeners running, you’ll start to see stocks listed that meet your criteria. The next step is validating them. We’ll get into that in a moment. We want to talk about using news sites, first.
Using Financial News and Websites
There’s another way you can find swing trading stock picks that don’t involve scanning for them. You can rely on the news and free stock research websites to do the heavy lifting for you!
Earnings surprises, analyst upgrades, product launches, or sector headlines can all create volatility worth trading. Just be clear that you’re not looking to make decisions based on the news, but it’s a great way to flag potential setups worth analyzing further.
For instance, you could pull up the chart for a stock you see a headline for and run it through your technical criteria. News gives you the why behind a stock’s movement, your system still decides the when and how.
Watch Out for Swing Trading Patterns
There are quite a few swing trading patterns you can watch out for to filter potential swing trades. Flags, pennants, ascending triangles, and cup-and-handle formations often signal momentum ready to continue.
The key is to catch them as they form, not after they play out. Combine the pattern with a clear breakout level and confirmation from volume. You can learn more about the best swing trading strategies using these patterns in our blog.
Consider Sector Performance
Strong trades often come from strong sectors. If tech stocks are leading the market, odds are the best swing setups are hiding there. Rotating into outperforming sectors puts the wind at your back, especially when the broader market is range-bound.
You might want to try using sector ETFs or heatmaps to spot relative strength and find areas breaking out ahead of the pack or holding up during pullbacks. Drill down into individual stocks showing similar strength upon finding a promising sector.
Validate Your Opportunities
Just because your stock screener or news site brings in a candidate, doesn’t mean it’s automatically a great swing trading stock pick. You need to validate it by looking deeper into the technical analysis and determining if 1) it does in fact meet your criteria and 2) where the opportunity is.
From there, you’ll be able to identify a good entry point and exit point. The rest just comes down to managing your position and getting in and out of the market as you planned – which is easier said than done.
But, with the right swing trading tools it can be entirely emotionless and automated. Speaking of which, it’s time we walked you through how to find stocks to swing trade through a more foolproof approach that saves you time and stress while improving your returns.
How to Find Stocks for Swing Trading with VectorVest: The Easiest, Smartest Way to Uncover Swing Trading Stock Picks
Now that you know how to find stocks to swing trade the old-fashioned way, your head is probably spinning a bit. Yes – it’s a lot of work. No – it doesn’t always produce great opportunities.
If only there was a better way to uncover swing trading stock picks on autopilot…
Fortunately, there is: Our stock analysis software. VectorVest helps you uncover winning swing trading stock picks on autopilot. But, you also get help timing your entry and exit to perfection. You’ll know what to buy, when to buy it, and when to sell it.
Three simple metrics tell you everything you need to know to trade a stock: relative value (RV), relative safety (RS), and relative timing (RT). Together, these make up the overall VST (value, safety, timing) rating of a stock. All of our ratings are put on a scale of 0.00-2.00. 1.00 is the average, and the more a rating trends towards the upper end of the scale – the better.
We’re able to rate a stock as either a buy, hold, or sell at any given time based on the VST rating. These ratings are fluid and adjust with the market – so you always have real-time insights into what our system thinks of a stock. Just pick stocks with the highest VST and you’ll win more trades! It’s really that easy. And, it’s made even easier through our stock picks and watchlists.
We have separate searches built for hot stocks, safe stocks, top dividend stocks, you name it. We even have searches in place for the top 5 industries in an upward trend – like insurance, mining, semiconductors, and more.
The point is, it’s easy to find stocks that fall in line with your unique trading strategy. Wondering how to find momentum stocks for swing trading? You can filter by highest RT to pull up stocks that show strong trends with lots of momentum. Want to find safe stocks to start investing early for retirement? Filter by the highest RS and you’ll find low-risk stocks you can buy and forget about.
You don’t have to learn how to find stocks to swing trade the old-fashioned way. It’s time to eliminate any emotion, guesswork, or manual labor from the investment process. See for yourself with a free stock analysis here!
Final Thoughts on How to Pick Stocks for Swing Trading
That just about does it for our guide on how to pick stocks for swing trading. You now know there are two approaches to uncovering good swing trading stock picks. You can do it yourself, or you can rely on a tried-and-true approach that eliminates emotion and guesswork – while helping you win more trades and earn more profit.
Don’t work harder than you need to in finding the best short term stocks. After all, the value in swing trading comes from leveraging minimal time to earn maximum returns. Try out the VectorVest stock advisory app yourself today – and you’ll never look at investing the same again!
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