Swing Trading For Dummies [Paperback]

Omar Bassal (Author)

Book Description

Publication Date: September 9, 2008

Take advantage of price swings in strongly trending securities and pump up your portfolio!

Want to know the strategies of successful swing trading? This friendly guide covers the ins and outs of this risky but profitable investing approach, explaining all the basics in plain English. You'll see how to use the two investment approaches - technical and fundamental analysis - to indentify promising securities in strongly trending markets. In addition, this guide covers how to calculate investment returns and, most important, how to manage your portfolio's risk.

• Learn from a highly experienced trader, analyst, and portfolio manager - the author shares his insider knowledge
• Understand often overlooked topics such as money management, journal keeping, and strategy planning - key areas that will largely determine your success
• Focus on the fundamentals - often overlooked by swing traders, fundamental analysis can increase your chance of success
• Determine your entry and exit points with technical analysis - read charts, apply indicators, and compare markets
• Evaluate companies with fundamental analysis - grasp the basics of financial statements and the criteria to screen for undervalued or overvalued stocks
• Develop and implement your trading plan - outline what you trade and how often, decide your risk tolerance, and calculate your performance

Open the book and find:

• The differences among swing trading, day trading, and buy-and-hold investing
• The pros and cons of technical and fundamental analysis
• A step-by-step anatomy of a trade
• A wealth of charts and screenshots
• Real-world examples of swing trading successes
• The 10 deadly sins of swing trading - avoid at all costs!
• Sample trading plans
• Useful resources for navigating data

Editorial Reviews

From the Back Cover

Take advantage of price swings in strongly trending securities and pump up your portfolio!

Want to know the strategies of successful swing trading? This friendly guide covers the ins and outs of this risky but profitable investing approach, explaining all the basics in plain English. You'll see how to use the two investment approaches — technical and fundamental analysis — to indentify promising securities in strongly trending markets. In addition, this guide covers how to calculate investment returns and, most important, how to manage your portfolio's risk.

• Learn from a highly experienced trader, analyst, and portfolio manager — the author shares his insider knowledge

• Understand often overlooked topics such as money management, journal keeping, and strategy planning — key areas that will largely determine your success

• Focus on the fundamentals — often overlooked by swing traders, fundamental analysis can increase your chance of success

• Determine your entry and exit points with technical analysis — read charts, apply indicators, and compare markets

• Evaluate companies with fundamental analysis — grasp the basics of financial statements and the criteria to screen for undervalued or overvalued stocks

• Develop and implement your trading plan — outline what you trade and how often, decide your risk tolerance, and calculate your performance

Open the book and find:

• The differences among swing trading, day trading, and buy-and-hold investing

• The pros and cons of technical and fundamental analysis

• A step-by-step anatomy of a trade

• A wealth of charts and screenshots

• Real-world examples of swing trading successes

• The 10 deadly sins of swing trading — avoid at all costs!

• Sample trading plans

• Useful resources for navigating data

About the Author

Omar Bassal, CFA, is the Head of Asset Management at NBK Capital, the investment arm of the largest and highest rated bank in the Middle East, NBK. He holds the CFA Charter and an MBA with honors in finance, management, and statistics from the Wharton School of Business at the University of Pennsylvania.

Product Details

• Paperback: 360 pages
• Publisher: For Dummies; 1 edition (September 9, 2008)
• Language: English
• ISBN-10: 0470293683
• ISBN-13: 978-0470293683
• Product Dimensions: 9.3 x 7.4 x 0.8 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (19 customer reviews)
• Amazon Best Sellers Rank: #34,107 in Books (See Top 100 in Books)
  • #11 in Books > Business & Investing > Industries & Professions > E-commerce > Online Trading

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Customer Reviews

Most Helpful Customer Reviews

30 of 32 people found the following review helpful:

5.0 out of 5 stars Swing Trading Globally and Multi-asset Classes, December 9, 2008

By 

S. Azem - See all my reviews
(REAL NAME)   

This review is from: Swing Trading For Dummies (Paperback)

I always thought "swing trading" referred to trading with a time horizon of a few days. This author, however, defines it as trading with a time horizon of a few days to a few weeks. So this book is geared to trades that could last a month or long--something I consider outside the realm of short term trading.

In any case, the book is split into five parts: Part 1 discusses the fundamental info (how markets work, what things to look for in a broker and deciding whether to trade using fundamental analysis or technical analysis). What I did appreciate in Part 1 is the author's focus on multi-asset classes and global stocks. Most short term trading books I've read seem to believe that only one asset class exists in the world: U.S. stocks. This one takes a different approach. The author stresses the importance of looking beyond the traditional pale of U.S. stocks and examines international stocks, commodities (via ETFs) and currencies. By expanding your investment universe, you're more likely to find securities with the right characteristics.

Part 2 has three chapters on technical analysis covering (1) charting, (2) indicators and (3) trading ranges or trends. Almost any technician knows how to interpret MACD or Stochastics, but how to use them properly is key. For example, the author stresses the importance of "only going on green". That is, we often find charts or indicators with buy signals but you can only buy the day a signal is actually given.

Part 3 is all about fundamental analysis. I don't use fundamentals that much in my trading so I read this part more with an eye to understand certain concepts. The discussion on debt and leverage was helpful given the current financial mess we're seeing. The author appears to have been right on his call that Marvel was highly leveraged and not worth swing trading on the long side.

Part 4 is perhaps the most important part of the book (and why was it put last?). It discusses risk control, developing a trading plan, using intraday charts and walking through an actual swing trade. By far, the most useful chapter was the managing risk chapter (10) because it covered position sizing, placement of stop loss orders and how to limit losses at the individual stock level and portfolio level. The last two concepts seem to be similar to Alexander Elder's "shark bite" and "piranha bite" concepts.

Part 5 is the "Parts of Tens" which is made up of two "top ten" chapters: Ten simple rules for swing trading and ten deadly sins of swing trading. If you've read Parts 1 through 4, you'll already have covered both top ten lists. The sins include things like starting with too little capital, gambling on earnings dates, trading penny stocks and violating your trading plan.

31 of 35 people found the following review helpful:

5.0 out of 5 stars Pleasantly Surprised, December 7, 2008

By 

Manpreet Singh "DON MPS" (Potomac, MD) - See all my reviews
(REAL NAME)   

This review is from: Swing Trading For Dummies (Paperback)

I was pleasantly surprised when I picked up this book at a bookstore. I normally have low expectations for Dummies titles. Let's be honest: you don't usually find gems among "Dummies" or "Idiot" books.

But I can state that Swing Trading for Dummies is my favorite book on short term trading. The book is the only one I've found which provides proper coverage on all aspects of trading--from designing a trading plan (part IV) to managing risk properly (chapter 10) to performing intermarket analysis (chapter 6). While most swing traders shy away from fundamental analysis, the book covered the essential items traders should understand in a company's financial statements and how to arrive at a ball park estimate for a company's shares in a few minutes.

The book has several charts to illustrate trading examples and stresses the importance of simplicity in designing a strong trading system. There was also good humor throughout which made the book an easy read.

24 of 30 people found the following review helpful:

4.0 out of 5 stars OK if you are a beginner but .., March 15, 2009

By 

Teri Pope (Warren MI) - See all my reviews
(REAL NAME)   

This review is from: Swing Trading For Dummies (Paperback)

The first 60 pages focus on the absolute basics of trading. After that the author gets into basic aspects of technical analysis and discusses indicators such as the accumukation boxes,trend lines etc. One take I have is that the book advocates the use of the ADX indicator to enter stocks and trade with the trend. My experience has shown that by the time the ADX moves above 30 especially in volatile markets the trend tends to be close to mature. I have read other books that advocate looking for low ADX and using other indicators to assess accumulation and then enter before the trend takes hold and this have been more effective for me. Also the use of DMI+ and DMI- to exit trades may not be the best way since these indicators tend to whipsaw and crossover multiple times in a short period.
The book spends many pages on fundamental analysis on how to evaluate company balance sheets etc. While this is good if you are an investor it can bring your swing trading into a halt. I cannot count how many times my losing swing trades were in fundamentally solid companies since there are many other factors involved such as naked shorting,long squeezes,a large fund wanting to exit that can drive a sound company's stock down.
On the other hand I do agree with the authors that you should trade stocks in technically strong sectors. In fact I have used this idea regularly with my trades before I read the book and recommend others use it . A recent examle is when CAB came out with good earnings I looked for other gun makers and traded SWHC for a good profit.
If you are a beginner, this book will introduce you to the necessities , but I would recommend you read other books to get different perspectives on the technical aspects of trading.