PHILOSOPHY OF TRADING PROFITABLY

Math behind stock swing trading success

CUE philosophy of swing trading stocks profitably relies on simple arithmetic to provide a basis for trading profitably.

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The arithmetics use input parameters like how many swing trades you are able to take in a week (based on your lifestyle), how much is your success rate (your system, techniques, and skill), and how much risk you take in your trade as a % of equity (risk tolerance) and average risk-reward-ratio (execution efficiency).

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You may start slow (say, 2 trades per week), modest success rate (say, 60%), with a small risk in each trade (say, 1% of total equity as the risk in each trade), and reasonable efficiency (1:1 reward-risk ratio).

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You trade with such a conservative basis for a while (at least six months period). The period needs to cover up-market as well as down-market. Once you are able to generate the expected return, then you have proven to yourself that you are able to swing trade profitably.

Then, and only then, you may start taking more trades or take a higher risk in each trade. If you increase risk, you may increase that gradually.

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These simple arithmetics will give you a basis, a goal, and eventually confidence to achieve your financial success in the market.

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What remains after that is to adopt a set of systems and techniques that enables you to achieve the above arithmetics. With CUE systems that enable you to align the forces from the market, sector-industry, fundamental, technical, and seasonality levels, that should not be difficult.