Revealed: Our Swing Trading Setup Step-By-Step

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$ASAN from our newsletter last week - another Swing Trade Setup WORKED!🥂

In the past few months, we have been sharing potential swing trading ideas and analyzing the thesis behind these trades for you. $PLTR, $SMCI, $ROOT… These trade setups that we picked had something in common - they presented high risk-reward ratios when we analyzed them.

This week, as per Stox.io users’ requests, we are going to explain how we picked these beginner-friendly swing trades.

We are not joking - you can copy our process step-by-step and find profitable opportunities for yourself too.

A friendly reminder - we have a FREE Stox Discord. Stay connected with us for the latest Stox updates!

^$TSM

📈 $TSM - Our Step-By-Step Swing Trading Setup Guide

Step 1: Select the built-in Mid-day Large Cap Swing Scan on Stox.io

This scan is specially designed by real traders including our co-founder Shay (Humbled Trader) to look for stocks that are showing bullish momentum after the initial morning surge. If a stock can hold up or continue to trend higher in the afternoon, this is a bullish price action that we want to look for in swing trading.

Step 2: Start with the more popular names on the scan result

Stox.io will generate a list of large-cap stocks for you instantly. Now, our job as a trader is to be selective. We want to find the BEST play that is most likely to generate a profit for us. So a simple trick is to start clicking into the tickers that you are more familiar with first.

The idea is simple - the stock that most people recognize is more likely the stock that has been talked about on social media, garnering attention and demand from buyers.

On this list, we identified $TSM, Taiwan Semiconductor Manufacturing Company, as the play that we want to analyze further.

Step 3: A quick look at the daily chart

Let your basic understanding of price action and chart pattern guide you. Zoom out on the daily chart to see the big picture of the trend. If it’s been uptrending, great. If it hasn’t been uptrending, is it forming a reversal?

If the chart does not look straightforward to you at all, simply close it and look for the next ticker on your scan result. Don’t stress it - we don’t want to force any trade. We let the trade come to us.

In the case of $TSM, the daily chart (see above) is indeed clearly up-trending. And the best part is that it has just reclaimed the $200 mark, a great psychological whole number price level that we can pivot on.

What makes the chart look even better is the fact that its previous high was $212.60, which means that we have a decent $10-12 upside range that is REALISTIC.

Step 4: Is there a positive news catalyst?

This is a bonus checklist. If there is a solid bullish factor, the stock is more likely going to see sustainable demand that drives the stock price higher in the upcoming days. Perfect for swing trading.

For $TSM, its Japanese plant is set to start mass-producing chips. (Bullish)

On top of that, the semiconductor sector remains a hot sector due to A.I. and crypto-mining.

Step 5: Do you like the risk-reward ratio?

Every trader has a different risk tolerance, and probably different stop-loss techniques too. Some traders use the EMA to trail their stop loss, some use the daily support level… There is no right or wrong. The only right thing to do as a mature trader is to determine your game plan before entering the trade. You should not copy another trader’s stop loss because you would not have the same entry price, same position size, same price targets or same level of patience.

In this case, an ideal level of stop loss could be the low of day on Friday, so we could be risking $197, and targeting $210 and above if the stock trends towards a new all-time high.

The key is that the risk-reward ratio could potentially be 1:3 or higher.

If you have learned something new from this email, please tag us on social media and share our newsletter with your trading partners!

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See you next week with more exciting stocks,

Team Stox