I would like to introduce myself as one of the starting members of this website. As many of you know I go by 2kHedgeFundCollin on StockTwits, my name just happens to be Collin. I am a molecular biologist currently working in the biotech field and my trading approach is short term swing trading based off Technical Analysis with a small influence of fundamentals. I am also an avid rugby player in the North-East USA for mens clubs, but relocating to SoCal this summer. Although I enjoy swing trade, my interests also lie within DRiP investing and the goal of early retirement.
I will trade any and all sectors if the chart looks good. Rumors and news matter little to my decisions. I see stock charts as patterns, always repeating and almost always predictable to a degree. A stock that has a multiyear support level at say, 50 dollars, will most likely continue to have that support level. I will start a small position just before that support level is reached.. This allows me to get into the stock before the action starts pouring in, and at a level at which if the support breaks I can exit with minimal losses. If the support holds I will add to my position and build a holding, waiting for a 3-5% gain on my position.
This leads me to my next rules. Cut losses, let winners run. If I buy into a support zone and that zone breaks, cut it. Even with a small 5-10% position of your portfolio, letting the price drop a massive percent so you can average down is a lost cause. Holding a bag would be fine for long term investing, not swing trading. You want to cut that 5% position at a 2-3% loss, keeping your total portfolio exposure to under 1%. On the other hand, you want to let your winners run. If your pick bounces off the support zone and rebounds to higher levels, you want to keep the momentum going. Don’t fully exit until you see weakness.
My strategy is to start to exit the position at 3-5% profit, selling only a portion of the shares and see if the stock continues up. This allows you to maximize your gains, but if the stock were to suddenly turn you have locked in some of the profits. Doing this, even if you end up selling the bulk at cost, you secure a profit to your portfolio.
I look for stocks that have oversold RSI under 30, have a minimum daily volume of 300,000 shares, and are close to or crossing over the lower Bollinger band. Once these measures are put onto my scanner, I look through the charts. I try to find picks that have finished the day on a large hammer candlestick, morning star, three white soldiers, ascending triangles, and raising wedges. The overall pattern shows whether or not the momentum is going a certain way, and last daily candle marks the entry points. This knowledge comes down to studying charts and patterns, where you can recognize a beautiful chart that willpresent a perfect swing trade opportunity.