Thread by @SRxTrades

My first 2 years as a day trader, I lost -$10,000

its not until I studied the best traders in the world & started swing trading that it all clicked.

Fast forward 5 years & now I make 6 figures a month swing trading

Below you can steal my exact swing trading strategy:🧵

The goal of this strategy is to make trading super simple and repeatable

We want to take advantage of strong market trends & use the leverage of options for a low risk high reward approach

Using big momentum swings in the markets we can catch the biggest moves

1. Establishing a trend

The easiest way to find out if the markets are trending is to:

Pull up a chart on

and add the 8, 21, 50 EMA's

EMA's can be used as a momentum gauge for when the markets are the hottest and stocks follow through the most.tradingview.com

2. Framework

Now that we have the EMA's on the chart, we can make some rules for the best times to trade in the markets

Use $SPY / $QQQ

Whenever $SPY / $QQQ are above the 8/21/50 EMA's, we want to be long with full size/conviction

We can also use this on the individual names we are swing trading to narrow down our criteria.

Stocks above moving averages = strong trend

3. Finding leading stocks

Easiest way to scan for leading stocks and themes is to use: tradingview.com

Click on screener

We want to narrow it down to search for liquid stocks that are leading the market higher on volume

Here are the parameters I use in my scan:

Price: Over $3
Market cap: Over $2b+
Relative volume: Over 1
Current volume: Over 1 million

And most importantly, the 8,21,50 EMA's below price to find leading names

Now we have some of the strongest and most liquid stocks in the market

Sort the list by volume descending

The best part about this scan is that you get 200-300 of the best stocks in the market.

4. Setup

You are now looking for a chart that is setting up in a tight base with a tight pattern forming

The goal is to find names that are either just breaking out or about to breakout of tight bases

This is the formula you are looking for:
1. Tight pattern or base
2. Decreasing volume on consolidation
3. Setting up above the moving averages
4. Clear entry level to use

Below are some examples of setups I look for

A name that caught my attention on my scan: $HIMS

The stock is forming a big weekly base

Setting up in a tight daily wedge pattern off the 21 EMA

Volume is decreasing as price pullbacks and increasing on the up moves

6. Entry

The easiest way to enter a trade is to find a trigger level for the breakout

What I look for, is a previous level of resistance/support that price has respected multiple times

In this example, you can see the $57.38 price level has rejected multiple times.

We want to confirm the breakout with lots of volume over the trigger level

Entry is taken on a break above the trigger level

For confirmation, we want to see high volume on a break out of the base.

For example $TSLA recent base breakout:

Breaking out of a tight daily flag and big weekly base

Enter long at the break above the the trigger level

We can use the 5m or 15m time frame to confirm our entry.

First 5m close above our level triggers long entry.

Stop loss is placed on the low of the daily breakout candle

to make sure that we manage our risk in case of a failed breakout

Alternatively for a higher win rate

Wait for price to comeback and retest the breakout level

(Only downside of this entry model is sometimes you will miss the breakout if the stock doesn't retest)

Tip:

Don't just buy the retest blindly

look for a hammer candle or bullish engulfing candle to form on the lower timeframes indicating that buyers have turned supply into demand

I also like to look for a lot of vol off this spot to confirm buyers are defending this level aggressively

7. Targets

Take profits at previous resistance levels

If price is making new all time highs, use Fibonacci levels to scale out.

My scale out strategy is 25% of the position at a time and moving up stop to break even after first trim.

If markets aren't following through, I trim 50% on the first target.

This sets you up for a huge r/r trade and keeps our losses very small

for breakouts we do not want the stock to comeback to our entry level

the strongest stocks will lockout traders and keep running

this is why my scale strategy works so well to hold winners

The goal is to hold onto the trade until targets are hit or you are stopped out

This will help you make trading emotionless.

Everything is preplanned and you are taking amazing risk to reward trades.

Breakouts allow you to capture huge moves and using options contracts you can use the leverage they provide to risk small amounts of money for bigger hits.

A key to this strategy is knowing when to trade and when to sit out

When the markets are hot and breakouts are firing you want to put on more risk

When markets are slower be patient and wait for the best setups to form

You can use the screener to find multiple setups and then wait for the stocks to trigger when they are ready to make the big move

I found another great setup on $PONY

Now I will add this to my watchlist alongside $HIMS and trade it if breaks above the trigger level

No trigger = no trade

Simple, repeatable, scalable.

Like any other strategy this is not a holy grail strategy but there's a reason why some of the best traders in the world swing strong names, and buy leading stocks in leading sectors.

I've personally used this strategy to catch:

$QBTS
$IONQ
$HIMS
$HOOD
$PLTR

just this year.

I post these setups every night on my twitter with trigger levels, option contracts, and targets.

So you can follow along, and learn the strategy.

If you enjoyed and learned something from this thread LIKE+RT❤️for more trade plans and educational threads.

I also made an in depth video going over this exact strategy for visual learners:

tiktok.com/@sean.rechtman…