 12/19/2020 The Long Swing ✔️ Swing trades can capture big market swings — here's what's key for swing traders... ✔️ This major indicator can tell you when a stock might not move anytime soon...  Swing trades can take a long time to play out.
I often find myself waiting weeks or months for a stock to make a move.
You're probably wondering how you can tell if a trade might take a long time ... How long should you hold a stock?
There are a lot of reasons a stock might not move for a long time. And there's one key indicator that can tell when this might be the case. Other times it's actually spelled out for you if you know where to look.
Let's talk about the timing of swing trades. I'll tell you what to look for and how to incorporate time into your trading plan. And I'll tell you about a special kind of stock I've been trading this year and how long some of these trades take... Opportunity Cost
For me, I don't mind waiting a long time for a move to play out. My account is large enough that I can hold as many positions as I want.
Some stocks can move sideways with little activity for a very long time. So there are certain considerations you need to make...
Can you afford to have a portion of your account tied in a trade for a long time? Do you have a plan to get out if the trade goes against you?
When you have cash tied up in a trade, you can't use it for anything else. That's considered an opportunity cost since you can't use that cash for any other opportunities that may arise.
But holding for a long time doesn't mean you're just holding and hoping. It all goes back to your plan. You should still have a plan to sell if the stock hits your stops. Even a slow-moving stock can go against you.
Make a plan for every stock. Only hold when your trading plan says to hold. You can build a time limit into your plan, too. It's your plan after all.
At a minimum, your plan should outline your entry, stop, and profit target. You need to have exit plans for when you're right and wrong. But don't get impatient. Low-volume stocks can take months to move.
If you can't afford to wait that long, don't take the trade. The most important thing to remember is that once you take the trade, you need to stick to the plan you made.
It's important that you set clear expectations for each stock you trade.
How can you tell if you should wait? Sponsored Ad  Paul used to be like a lot of Americans…
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When to Wait
As I mentioned, stocks that have low volume tend to not move very much. Some companies just don't get a lot of attention.
I traded a stock like this earlier in the year. I found Beam Global (NASDAQ: BEEM) back in July. It used to trade under the ticker EVSI.
The daily volume was only a couple of hundred thousand shares per day. That's relatively low compared to many faster-moving stocks.
But I was intrigued by the company. It provides solar-powered charging stations for electric vehicles. EVs were already super hot this year. The company was in negotiation with several cities. Its goal was to get a contract to install the charging stations in a major city.
My thought process was that once a few deals came through, the stock could start taking off. I started buying in the $10s.
But I knew it probably wouldn't move for a while because the volume was so light. And the company didn't have a lot of sales.
I was also mindful that the company might never get another deal. But for me, the reward far outweighed the risk.
It turns out, I was right. After waiting for several months the stock started to move up. I sold some of my share in the $16s. And I kept waiting … Now, this stock is trading above $30.
But if the price failed to rise as the volume increased, then I would have known I was wrong. In this case, my patience paid off for me.*
Waiting has benefited a lot of traders in 2020...
There's a new kind of stock that's taking the market by storm. The biggest rewards have come to those who are willing to wait out the deals.
Let's look at this special kind of stock. Most offer limited risk and there's been some huge upside. SPAC Timing
There's a special type of stock I've been trading this year — SPACs.
SPAC stands for special purpose acquisition company. It's a different way to take a company public instead of the traditional IPO route. These companies provide specific timelines in their SEC filings. Most deals take 18–24 months to close.
This is a super-hot trend in 2020. Let's break down how it works.
First, a SPAC sells shares with no underlying business.
The cash it raises sits in escrow until the SPAC reaches a deal with a private company to merge with or buy. This is the process DraftKings Inc. (NASDAQ: DKNG) used to go public.
Now hundreds of other companies are going public through SPACs lately. But remember, it can take quite a while for these deals to play out. It's usually one to two years after the SPAC sells shares that it closes a deal. But sometimes it can take longer.
These companies disclose their intentions in their filings. And they often release updates as the deal progresses. So the best way to have an idea about when a deal might close is by reading the filings. As the deal gets closer, the timeline can get updated, too.
All this information is public. And most people don't bother to take the time to read it.
But if you want to be a swing trader you need to understand how long the swings might take. So do your research. Because when you're waiting for a trade to play out, it can feel like an eternity. Sponsored Ad  ✅ Entry & exit points on low-priced stocks.... ✅ Up-to-date market insights... ✅ Commentary on specific trades…
Trades Worth the Wait
There are cases when the time it takes for a swing to play out is longer than others.
So make sure you understand what you expect out of the trade when you get in it.
If you figure something out before the rest of the market, you might need to give the market time to figure it out too...
Being first can mean you need to be patient.
Make a plan and follow it. Get out when you're wrong. And take profits when you're right.
The timing can vary. But good things come to those who wait.
Don't get short,
Paul Scolardi Editor, Swing Trade Millionaires P.S. Stephen Johnson is one of Tim Sykes' most stubborn students. He's struggled in the stock market for years, and nothing seemed to work for him. Until he started looking at the hard data of his trades… and he unearthed an obscure pattern that's changed everything for him.
He's turned his trading around and started making big profits… and he wants to show you exactly how he's done it. If you want to see his unorthodox strategy right now…
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