5 challenges of a swing trader

There are 5 challenges of a swing trader.  These things are problems that all swing traders face and should be overcome to be successful.

1.       Exiting winners too early.  Exiting a profit early is tempting, especially if you have been on an unlucky streak.  If you buy a stock at $30 with a target of $36 you cannot sell when the stock goes to $33.  The major reason this can be hard is knowing that a wining position can turn around.  It is natural to want to get out before that, but a strong position can also stay strong. Remember letting your winners ride will go a long way.

2.       Not cutting your losses short.  For swing traders it is absolutely critical to cut your losses short. That is the only way you can make money in the short term.  Only taking trades that have a 2/1 risk to reward can greatly benefit you.

3.       Going for the extra quarter.  In swing trading you will sometimes hear yourself saying something like this.  “Yeah I hit my target but I think I can squeeze out an extra $.25 out of it”. If you do you are taking a big risk.  Getting out once you hit your profit target is a very good idea.

4.       Getting stressed out.  When you are dealing with the stock market you are going to have your winning streaks and losing streaks.  There is no way around it.  Don’t get stressed out by losing streaks, just remember to keep your losses small and when you have winners remember to let then run.

5.       Not learning from your past mistakes.  It is very important to keep learning.  Every time you make a mistake in the market take that opportunity to learn something.  If you do it can help you to not make the same mistake again in the future.  If you don’t you can make the same mistake again and again. 

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