This site, www.stockmarketmirror.com is all about timing, which is an
indispensable part of swing trading. A number of timing scenarios is
available, enabling thus a number of swing trading scenarios. We shall
try to find together the optimal swing trading scenario, that works for
(almost) everyone. Time frame of swings and number of stock symbols
included into timing calculations are the basic parameters of those
swing trading scenarios. To be more specific, we shall investigate
short-term and long-term swings for individual stock symbols on one hand
and for a large list of stock symbols, representing overall stock
market, on the other hand. That makes together four swing trading
scenarios.
1. Swing trading, based on the short-term swings of
individual stock symbol:
Timing of individual stock symbol
in order to catch short-term swings is very unreliable. In fact, it is
the least reliable approach to timing. Therefore, the same applies to
swing trading of individual stock symbol based on its short-term swings
- it is the least reliable method of stock trading. In spite of its
apparent disadvantages, it is very widespread method of stock trading
among professional traders and among ambitious amateur traders as well.
Why is it so? The likely reason is, that the available functionality of
the most prominent software packages is to a great extent instigating
traders to such approach together with the very human ambition for a
quick profit.
2. Swing trading, based on the long-term swings of individual
stock symbol:
The situation is slightly better in this case
than in the previous case. Timing of individual stock symbol in order to
catch its long-term swings is more reliable than in the case of
short-term swings. Anyway, because there are more reliable methods of
timing, swing trading, based on the long-term swings of individual stock
symbol is not recommended.
3. Swing trading, based on the short-term swings of overall
stock market as represented by a large list of stock symbols:
Market timing signals calculated on the basis of large list of stock
symbols are much more reliable than timing signals of individual stock
symbol. Therefore, stock trading based on such signals is also much more
reliable. You can trade small portfolio of selected symbols or use
market index as a trading vehicle in order to minimize trading fees. But
catching short-term market swing is less reliable than catching
long-term market swings. See NASDAQ timing for details of model calculations.
4. Swing trading, based on the long-term swings of overall
stock market as represented by a large list of stock symbols:
This is the most reliable method of stock trading that is also
yielding reasonable profitability. The reason is, that market timing,
based on a large list of stock symbols with parameter settings for
catching long-term market swings is the most reliable. Because frequency
of trading is very low, about five trades a year, it is very suitable
for amateur trades, having stock trading as a leisure time activity. The
annualized profitability, based on the model calculations is not much
below the profitability of short term market swings, therefore it may be
of interest for professional traders as well. See NASDAQ
timing for details of model calculations.
