Swing Trading Strategies: Trade And Win Fast With AI Stock Picks

Chloe PengThe Swing trading strategies article was written by Chloe Peng, Analyst at I Know First. Master of Science of Finance candidate at Brandeis University.

What’s your average investment period of a stock? How often do you trade? Do you prefer fundamental analysis to win in long-term or technical analysis to win in short-term? You may encounter such questions when you first contact a broker to build an account, or you may ask yourself these questions many times during your financial life.

How to Decide On Your Trading Time Horizon?

Some investors are in favor of long-term investments which lasts more than 1 year for lower trading fees and its convenience. Others might want to utilize swing trading strategies, the style of trading that attempts to capture short- to medium-term gains in a stock (or any financial instrument) over a period of a few days to several weeks. These investors want to make the best use of their money immediately and make profit from an anticipated price move.

swing trading strategies intro
(Source: iStock.com)

The goal of swing trading is to capture a chunk of potential price move, meaning that the first step would be identifying where an asset’s price is likely to move in the next few days or weeks. Swing traders move from opportunities to opportunities quickly and trades on a risk/reward basis by analyzing the chart of assets to determine the point to enter, where they will place a stop loss and anticipate where they can get out with a profit. For instance, if they are risking $1 per share on a setup that could reasonably produce a $3 gain, that is a favorable risk/reward. On the other hand, risking $1 to make $1 or only make $0.75 isn’t quite as favorable.

Thus, you may find out that the active trading method can be troublesome to those who lack financial backgrounds. For example, investors need knowledge and skills to perform technical analysis, such as analyzing the stock k line, watching the moving average, understanding patterns and trends. It does require active management and can be very time-consuming because people need to constantly focus on stock price movements to find precise entry, stop loss, and take profit levels.

I will show you an example of how you may benefit from swing trading strategies on Apple stock. The chart below shows a period where Apple (AAPL) had a strong price move higher. This was followed by a small cup and handle pattern which often signals a continuation of the price rise if the stock moves above the high of the handle.

swing trading strategies
(Source: Investopedia)

In this case, the price does rise above the handle, triggering a possible buy near $192.70. One possible place to put a stop loss is below the handle, marked by the rectangle, near $187.50.

Based on the entry and stop loss, the estimated risk for the trade is $5.20 per share ($192.70 – $187.50). If looking for a potential reward that is at least twice the risk, any price above $203.10 ($192.70 +(2 *$5.20)) will provide this.

Also, our forecasts are very explicit. You can utilize our 3-day or 14-day forecasts to make investment decisions. Still, we take Apple stock as an example. In the chart below, you see I Know First had a 3-day bullish forecast for AAPL on Aug 18 2019, when there’s a buy sign on the picture above. Our subscribers were able to win ahead of others by utilizing our predictions.

swing trading strategies -aapl past

And we have more recent forecasts with AAPL. The following chart shows you the Apple stock price movement during Feb 3 2020 and May 3 2020. We generated forecasts for both long and short positions. See the 2 examples about how you can establish your positions within the time period with I Know First’s forecasts.

In our Feb 21 2020 forecast, we successfully predicted that AAPL stock will fall. After 3 days, AAPL stock price decreased by 10.06%, which is in line with I Know First’s AI forecast. As swing traders, you short the stock for only three days before you buy them back. Thus, the 10.06% profit will be fixed and realized after 3 days.

swing trading strategies-aapl short

After the bullish forecast we provided on March 31 2020, Apple stock increased by 12.65% in 14 days.

How Can You Win Before Others Using AI-Powered Forecasts

For those who lack related knowledge or are simply impatient, it’s very difficult to pick the right stocks to use in swing trading strategies, let alone choosing the right timing. Swing trading relies on a strict mathematical set of trading rules to satisfy the objectivity of eliminating human errors and subjectivity. Hence, it might not be very suitable for retail investors or small institutions to use the method and decide on their own. But luckily, this doesn’t necessarily mean that you can’t benefit from this strategy, rather, you can let our trading algorithm to do the work.

We have trained our AI algorithm with historical dataset that covers many years of information. The algorithm will find trends and patterns in the data, learn market behavior and predict future price movements. Moreover, since the algorithm learns from its previous forecasts and is continuously adapting the relationships between financial assets, it adapts quickly to changing market situations.

swing trading strategies-ikf

When it comes to technical analysis, AI would help with data analysis and pattern identification. AI predictions can be used to find both the optimal assets to go for and the best timing to exit, making sure the trader has made the most out of the transaction.

Now, I Know First provides daily market forecast for over 10,500 assets under various time horizons, covering short-, mid- and long-term investment needs. We have short-term model forecasts especially for indices and packages, such as short-term top 10 US stocks and short-term aggressive stocks. Our algorithmic short-term forecasts on currencies generated a return of up to 0.22% in one day.

Moreover, not only do we provide long position forecast, we also have short-position forecasts. For instance, from Jan 1 2020 to Mar 25 2020, the predictions generated by our algorithm for short positions for S&P 500 stocks were highly accurate.   

We issue our stock recommendations with a heat map which shows you the signal and probability of each stock we pick. Signal works as a measure for the performance of a given asset against the rest of the financial instruments on the forecast. A positive signal means you should long the stock and a negative signal means you should short the stock. The stronger the positive signal is, the more the asset is expected to rocket and vice versa. Predictability shows how and accurately the algorithm has been predicting the asset before. Most of the times, a higher predictability means we are more confident with the stock forecast.

Our forecasts are explicit and highly accurate. For example, our AI correctly predicted the price movement of S&P500 and NASDAQ more than 6 out of 10 times under all time-horizons. Thus, as swing traders, you should really let our trading algorithm help you decide and win.


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Please note-for trading decisions use the most recent forecast.