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How IBD’s SwingTrader Differs From Other Swing Trading Tools

Disclosure: IBD provided ValueWalk a free subscription to SwingTrader for this review.

When it comes to do-it-yourself investing, there is a variety of strategies you can use to rack up some decent gains, and one of those strategies is swing trading. Many investors follow basic swing trading principles, whether or not they know that what they’re doing is, in fact, swing trading. There are plenty of tools available for those who want to try it out, and one of the available options is SwingTrader from Investor’s Business Daily. It even has a mobile app for iOS and Android, which allows you to stay on top of your trades all the time with push notifications.

swingtrader
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What is swing trading?

Even some of those who don’t know anything much about investing have at least heard the term “day trading,” but swing trading is a lesser-known strategy. These two trading strategies do share some similarities, mainly because they are both short-term investing strategies.

The biggest difference between day trading and swing trading is the typical length of the trade. Day traders often hold their positions for less than a day, while swing traders usually hang onto their stakes for two to six days, although sometimes they keep them for up to two weeks. In fact, it’s very unusual for day traders to hold any positions overnight. Both short-term strategies focus on making small profits based on a short-term mindset by reaping returns from temporary moves.

Day traders often rely on technical analysis to identify stock movements over the course of a few hours. Swing traders also use technical analysis to identify potential opportunities, but the focus is on picking up on swings that last multiple days. Investors who like to dabble on their own with a small portion of their money while letting a fiduciary handle most of their portfolio may find that swing trading allows them to satisfy their craving for investing action.

How IBD’s SwingTrader works

Swing traders generally focus a lot of their attention on technicals observed on stock charts. They examine overall market trends and then look for a few places where they can turn a profit over a few days. Whenever a stock is in an uptrend, a swing trader may initiate a long position, and vice versa for stocks that are in a downtrend.

Because of the technical nature of swing trading, most products that are designed for investors who want to do it are heavily focused on stock charts and technical signals. However, IBD’s SwingTrader is different because it also works in a bit of the fundamentals. IBD is well-positioned to mix fundamentals with technical signals because of all of the other trading tools it offers, and SwingTrader offers an excellent mix of both fundamental and technical factors. It should also be noted that those who use IBD’s other tools will find that SwingTrader offers different analysis.

Swing traders typically set certain parameters for themselves, and SwingTrader is very clear about the parameters it sets. IBD designed SwingTrader with target trades lasting five to ten days with a profit goal of about 10% and a stop loss at about 3% to minimize losses when trades don’t go the way it initially looks like they will. With this in mind, let’s dive into SwingTrader.

SwingTrader keeps current trades list short

After logging into SwingTrader, you’re greeted by a list of current trades, which basically means stocks that the SwingTrader team is focused on right now. These stocks are in the buy zone that was set by the SwingTrader team, which is great because it takes a lot of the guesswork out of swing trading. Using IBD’s product enables you to spend more time making trades and less time researching each individual stock, making it perfect for the investor who likes to dabble but not spend a whole day buried under research.

At the time of this review, there were three stocks on the list of current trade in SwingTrader: Shutterfly, Akamai Tech, and Shake Shack. The team added Shutterfly on June 5 after it cleared a short consolidation and landed in the IBD buy zone. The platform is very cut and dry with clear, precise numbers so you always know what each stock’s target price is. This enables you to identify a good time to buy in or to sell or even short a particular stock.

Clicking on any of the stock charts brings up an annotated chart with more details and notes based on the analysis from SwingTrader. IBD really does a nice job with its charts across all of its premium products, so if you’ve spent any time using any of their other charts, you’ll be able to easily glean a lot of information from the charts in SwingTrader. Anyone who’s trying to learn the art of swing trading can certainly learn a lot from the notes and charts inside this platform.

One thing I found particularly interesting is that two of the three stocks on SwingTrader’s list of current buys weren’t even in their buy zones. An investor who’s watching these closely may even catch a switch a touch before the IBD team does. For example, Akamai Tech looked to be heading into a downtrend. It had fallen below its buy zone, but it was still above the stop loss of $75.87. If the shares continue to trend lower, Akamai could end up on the past trades list.

Past trades on SwingTrader

After examining the short list of current trades, I found it helpful to also peruse the list of past trades. In fact, those who are just trying to acclimate themselves to SwingTrader at first may find the list of past trades to be very insightful. It tells you the date when IBD added it to SwingTrader, the date when it was removed, and the entry and exit prices. It also tells you the percent gain or loss on each of the past trades.

Looking through this list really gave me an excellent idea of what SwingTrader is all about, and it helped to put some numbers on how several small, short-term trades can add up to meaningful profits without a ton of legwork from having to research every single one on your own. I also found the list of past trades to be helpful because it’s easy to click on each ticker to bring up the SwingTrader listing for comparison to the stock’s current movement. Advanced swing traders may find this list to be a helpful tool because it could help identify trades that have come back again after a short hiatus.

The third main tab inside IBD’s SwingTrader is the list of recent alerts, which is basically a summary of the notifications you will have received if you’ve been using the platform for the last five days. Swing traders who don’t necessarily want to be connected every moment of every day will find this particularly helpful because all the alerts are in one place.

Overall, SwingTrader offers an excellent way for investors to learn the art of swing trading. The platform is very intuitive and easy to use, so investors who learn by doing will be able to pick up the principles fast. Advanced swing traders will also find a lot to like about the platform because it identifies very clear buy and sell prices and eliminates the need for heavy research, making it perfect for investors who don’t make trading their full-time job.

Check out SwingTrader right here

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