Today we are going to be talking about the most effective way to make $100 a day by swing trading. Now, swing trading is of course, buying into a stock, then selling out on a day that isn't the same day that you purchased it. And the most effective and concrete way to make $100 consistently by doing this is by taking advantages of stocks that have a history of being oversold and overbought aka being undervalued and overvalued again and again. This allows you to take a position when they're undervalued and sell out when they're overvalued.

It's really a beautiful process, and once you're able to take advantage of one opportunity, you can use the steps in this video to scale up your efforts and maximize your profits. And the big advantage that Swing Trading has over day trading is the fact that you don't necessarily need to watch the minute-by-minute price action. Of course, the tricky part with this is that you're going to need to figure out how to find opportunities that provide a large difference between the oversold and overbought. but we're going to be talking about exactly how to identify the pattern and how to find those great opportunities.

And of course, the best broker for swing trading is Weeble 100% They have Commission free trades and of course they also have an amazing mobile platform that will allow you to keep track with all the trades while you're in the position. And they still have that free stock promotion. so click the link below if you'd like a free stock when you're signing up. But as always the only thing I ask of you in return for this video is that you hit that beautiful and ravishing like button.

And also don't forget to subscribe if you see value in the following video. Okay, so for simplicity's sake, we're going to start with a mainstream stock. This is to show you that even if you live in the shadows amongst the cats, you will still be able to take advantage of these opportunities. But I Also don't want to discourage folks who aren't living in the shadows.

So after this, I'm going to be talking about the better opportunities that have a much larger percentage gain that you could take advantage of. Of course, I'm also going to be showing mathematically how much you're going to need to invest in your position and how easy it is to scale up after going through the examples. Okay, so starting from the bottom, when you're day trading instead of swing trading, our focus is primarily on the intraday chart Because that's the period where we are looking to have movement in. we're trading intraday, so we need intraday movement.

With day trades, we may still consider the longer-term chart when planning out our trade, but when we're actually in the position, we're paying closest attention to intraday chart with swing trading. on the other hand, it's a completely different story. We are focusing and analyzing a much longer term chart for opportunities than the longer time spin. So if we're looking at Facebook We can track for a swing trading opportunity on a larger time span.

For example, if we take the 180-day chart, we could see that this has the pattern of being oversold and then being overbought and then going back and forth. So we can look at this and say to ourselves, okay, well Charlie, Heck, every time the stock was oversold, it would have been a good position for me to hold it until it was overbought and I would have made money each and every time if I followed that strategy. So saying that, you could tell yourself okay, well, I know that in hindsight, this is 20 20 I Recognize this pattern now. So what can I do moving forward to take advantage of it? So in order to take advantage of it in the future, what you're going to need to do no wonder what to first analyze the see how long it took each of the positions to recover.

Once it was, it was oversold. This is going to give you an idea of how long you're going to need to lock up your capital if you were to take a position and to get a ballpark estimate on how long the position should take. On average, you can estimate the average amount of time it took to become overbought after being oversold previously. If we apply this to Facebook, we see that the last three time periods where it was oversold, it took roughly two weeks or so to become overbought Again, That means that you can expect a swing position in this to last roughly two weeks.

Doesn't mean it will, but it will on average and we're gonna talk more about that in a second. But at the same time, if we had bought last time, it was oversold and then held until it was overbought, that would have netted us about $15 a share. Now, this is only about a two percent increase, but that is what you're going to get with a lot of these mainstream stocks. And honestly, if you're a beginner to swing trade and it might be worth it to go for the two percent increase now and then scale up as you get better.

but again, we'll go over the better positions later. So while you've already identified that behind net oversold would have always been a good idea with this particular stock, you're going to still want to figure out how to further increase your odds of success if something wants to go amiss, because we know there are no guarantees in the stock market or really with anything. So the first way of doing this is to examine the 180-day chart and see if there were any trend reversals and how we could have handled those. As we can see the last periods of being oversold and overbought, we're during an overall uptrend for Facebook while first half or during an extended downtrend.

Now it doesn't matter if it's going up or down, as long as we have a previous pattern confirmation. that means we have a history of the pattern, then we could figure out how to trade it Because then we can be prepared if for some reason the stock breaks the trend and heads in an opposite direction. So if we're looking at the down training period, we can quickly see that. Ok, well in these situations you have a smaller margin of error because it only recovers to fair value.

Instead of being able to hold from over-salt to overbought, you can only hold from oversold to fair value and still make it profit. So we know that if there is a reversal, this is going to be a very bad pattern for us. But of course there are better patterns to trade off of. But in any case, this just gives you a smaller margin of error.

So that means you're going to want to enter only if you have a pattern confirmation and a setup that provides enough price action to trade off of such as Facebook did during this later period. If the trend reverses and you enter into a period where it's going down, where do you know that? Ok, I need to get out at fair value and then I need to just exit the position permanently. I'm not going to get back in until we see a trend reversal or a new pattern form, But the key here is that even with Facebook, you know, taking advantage of this, even at a Down training pattern could allow you to have a decent amount of profitability just holding from oversold to the fair value. But of course, we want to have the largest amount of margin for error.

so it's going to be super important that we have it where it's oversold to overbought. And if you're wanting to reach $100 a day from simply swing trading, you're going to need to focus on stocks that don't only have good setups, but also have the best setups. So AMD has been providing an excellent setup for us. This is actually the comeback.

King Patterns is of course, the pattern of over buying and over selling on the RSI repeatedly within the same time period. but you judge the actual value behind this. We need to calculate how much we would make and how long it would take if we were to take advantage of this setup. So let's go ahead and look at the first example of an oversold opportunity with this stock.

If we were looking at this point, we could see that buying it at oversold would have brought us into a position at about S. 1705 or so, and then simply holding until it was overbought would have given us an exit point at about $23 Now that's an increase of about 35% and this increase happened between our entry on the 20th and our exit on the 3rd. That means it's about two weeks or so, maybe a couple days more. With this opportunity, we could say to ourselves, oh Ok Charlie, Well, I see that in two weeks, this went from seventeen to twenty three dollars.

That means that it has a pattern of giving a thirty five percent return every time it's oversold and within a two week time period. So that means I can strategically buy into this when it's oversold and then hold out when it's overbought and make my thirty five percent. Of course, a safer way to calculate the percentage gain or potential percentage gain would be simply to go through each oversold and overbought period, add them all up, and then divide them by the amount to take the average, but you don't really need to do that. You could probably just eyeball them and figure it out on average, But if you can get a thirty five percent return within two weeks, you can then decide whether or not your capital is best placed in this position.

And if you have limited capital and don't have the ability to beat this return, then it's going to make sense for you to take this position. If you can't beat the thirty five percent return with this capital based on any effort that you can do in the next two weeks, then you might as well take this one because it's going to be a passive position and you could potentially get that thirty five percent return. And odds are strong that it will take a lot less effort than if you were to say day trade for that thirty-five percent. But anyways, how much would you need to invest in order for this to be a hundred dollars a day? Because that's the overall topic of this video.

Well, assuming a thirty five percent rate of return on this particular position. Of course, they're all different and you're going to have to adjust them specifically on this particular position. If you're going to turn this into a hundred dollar a day position, you would need to invest about forty five hundred dollars in order to achieve that goal Now I Don't know if that's a big or a small position size for you individually, but I Do know that you can work your way up if it's too large. But just to explain the math behind this a little bit after selling this position and overbought, if you're holding this for two weeks, that's roughly fourteen days and that comes out to about one hundred and twelve dollars a day.

So you just made one hundred twelve dollars a day. And boom, you have that extra hundred dollars a day that we talked about in this video. The great thing is that with that hundred dollars, you can now afford to pay for that premium insurance for your tarantula because tarantulas get out of hand. Okay, but let's say that you have more than forty five hundred to invest.

Or let's say you know you've scaled up your position using less than forty five hundred and now you have five thousand dollars and you're like, okay, well, why don't I just keep doing five thousand instead of adding to a single position? It's a much better idea to scale into other positions I Understand the logic and the logic. Is it okay? If I can make a consistent 20% return on one stock, why don't I just keep adding to the position. Do you know buying in it oversold and then selling at it overbought over and over and over again and just keep growing and exponentially? Well, that doesn't really work because the probability is never 100% and if you keep doing that, maybe by the 10th or 11th time, you're probably going to wipe out a large portion of all your gains and you're probably going to end up somewhere close to where you started that's not even considering like emotional factors that come with. you know, larger position sizes.

But let me explain this based on the statistics behind it. Now, if you enter any individual position, no matter what the pattern is, no matter if it's overbought or if it's oversold, there is a statistical likelihood that it will break the pattern. It may be a 5% chance. it may be a 1% chance.

A lot of times it's usually like 10 to 20% But let's just say for the point of argument that there's a 10% chance that any given stock is going to break the pattern at any given time. So just for the sake of this argument, we'll say there's a 90% chance that it continues the trend and a 10% chance that it doesn't continue the trend. That means that if we are constantly playing the same stock and scaling up our position size, eventually we'll end up in that 10% Where it does break the trend. Now, that doesn't necessarily mean it's going to be a drastic break, it might just be.

You know, a little break that we see come in and we're able to sell out and cut our losses quickly. but it could be a drastic break. Probability of having a drastic break means that if we plate the same stock hundreds of times that eventually we're going to end up wiping out our account. Now obviously there are other factors at play, such as our emotions like I just mentioned, or a level of discipline or level of planning how we react to the larger position sizes and of course, very importantly, our emphasis on risk management, tools and understanding.

You know, upward versus downward potential, but as long as we have the probability of a failure, it doesn't make sense to add more capital into the same opportunity, but instead scale by taking advantage of more opportunities. We could quickly have 10 simultaneous swing positions that are all in various stages of being oversold and overbought. But the beauty is that if nine of them succeed, it doesn't matter if one fails, It really doesn't even matter if you fail. but by scaling with multiple opportunities.

We've now now not only protected our capital, but we've also made money. But I Guess that depends on how quickly you cut your losses on the last two. But as we know, there's a boatload of early warning signs of reversals. Make sure you know those before entering sweet positions, by the way.

But in any case, the best way to scale your opportunities and improve your odds of success overall is by increasing the amount of positions where the odds are in your favor. Overall, you have the resources through indicators in previous pattern confirmation to keep the possibility as much in your favor, as possible, but it will never be 100% and that is why when it comes to swing trading, I Recommend scaling horizontally instead of vertically. Okay, so another example of this would be a M or S. Now Mr.

S is a little lower and more volatile of a swing position, but it also has the previous pattern conformation while harboring a lot of long-term upward potential. Now, one of the most effective ways to improve your overall probability of success with this is by trading stocks that not only fit the pattern for over bonding, over selling, but also have a large amount of upward gravitational pull with much higher resistance in the past. Think about this logically if you were given an opportunity to buy two stocks with identical patterns over the last three months, but one stock has a much higher resistance level before that three-month period, and the other stocks resistance level is perhaps even below where you're trading at Now, all else being considered equal, it's going to be better to choose the one that's actually trading much lower than resistance. Because of the simple fact that it's less likely to be overextended, we want to have as much upward potential as possible and doesn't have as much of the probability pulling in our favor.

Now, Mr. S fits this pattern and we can also see that buying in and each oversold point would have allowed us to sell out at a massive percentage gain at a lot of the points they were actually doubling. That being said, I've generally found and perhaps unsurprisingly that the lower you go in terms of individual share value, the more often you get recoveries and the multiple hundreds of percentage points. Like with this one problem here, though, is that they often move a lot faster and are a lot more likely to break the trend.

And because this can happen so quickly, the risks increase. With each of these plays, this could eat up a lot of extra gains and profits. So I'd say proceed with caution if you're going to be attempting to trade. DS Ok, another example, so another example would be Tesla Now this is of course a popular example on this channel that I use a lot, but it's because it provides such great and calculated volatility that regardless of the overall trend direction be net, upwards or downwards, you could still make a killing at buying it at oversold.

But the key that this highlights is that if a stock is down training instead of up trending, it's 100 times more important to sell out at overbought if you hold past overbought and it continues its overall down trading pattern, which obviously probability says yes it will. If it's been down training for a long time, then the next time it reaches that overbought line, it's going to be lower in price, so don't hold aimlessly. Always have it plan I Know I've said that before but always have a planned and stick to that plan nonetheless. I Know this example is beat down like a rabid dog because of the simple fact that I've used it so often.

but honestly, it has amazing price action. It's also important not to attempt a strategy on stocks like this one as we can see this has that descending uptrend pattern, but if you're using this one, CRO n would not have made a good play during this time span. Let me pause me talking for a second so you can figure out why This doesn't fit my criteria for swing trading positions well. The reason is because we don't have the overselling and over blinds ascending to perfectly in order for us to have those opportunities where it was pushing back and forth.

So, while you could have swing created this, we made a lot of money. This strategy wouldn't have been able to tackle that. Of course, there are other strategies that you could have used to tackle that, right, but the strategy on this video I feel is the most actionable and is the most consistent for a lot of traders and the average person. Honestly, simplicity is key and I really think that the average person would be much better off focusing on buying oversold stocks and selling out when their overbought.

Okay, so let's go ahead and summarize the whole video. so you have an idea of what you just learned In order to make $100 a day. Buy swing trading. You're going to need to do the following: Number One, Find stocks that have a history of being oversold and overbought during the same time period, number two, Find out what that time period is, number three, buy in when they are oversold or undervalued, number four, sell out when they are overvalued or overbought, and number five scale this until you reach $100 a day.

And of course, if there's a break of trend as an extra measure, you can set the broker to alert you let's say a certain parameter is crossed and I'll just shoot you a message and you can analyze the situation at that point to further protect your capital. Let me answer a few questions that I anticipate getting after watching this video. So I think the biggest confusion with swing trading is understanding which chart to prioritize and the implications with each. Specifically about how chart use varies with day trading positions and with swing trading positions.

So the pro of day trading positions is that you get to focus on the intraday chart, and this means that if we can find a large amount of upward potential on the intraday chart, then we can make a large percentage gain in a much shorter time span. This may or may not be a huge advantage for you based on your other time commitments. A lot of people just don't frankly have the ability to take advantage of these positions, but in any case, upward potential of five percent on a day is going to be more valuable for somebody than you know. a swing position that has 5% in a week.

But like I said with day trading, it's a lot more work overall and it isn't as scalable because you really can only be in one position at a time. I Know people do multiple positions, but I just never really found that to be the best way to go about it. It's just very time sensitive and you need to see all the signs of a reversal. So that's sort of a big con when it comes to actually day trading versus swing trading.

Of course, if you're really good at day training, why not scale that by in swing trading to your overall strategy? That means you can be making that extra hundred dollars a day from swing trading while also making your living doing day trading. And eventually you can get better with day trading and also scale up the swing trading. But again, with day trading positions, we're focusing on the intraday chart. The intraday chart is king because that because that's where the movement is for that type of position.

But the huge con of this is because of the short-term time span. we're going to be needing to focus on the minute-by-minute data we need to make sure that we can catch if the price starts moving against us. such as seeing that weakening on the SMA line. Well, swing trading.

Minute by minute data is a lot less relevant. Did it a simple fact that we're focusing on a much larger time span so intraday movements don't matter as much. Of course, if the stock takes in one day, big impact on the larger term time chart that's going to affect us and that's why we need to set specific alerts to make sure that we know when there's a trend reversal. But in conclusion, I will say that swing trading is a lot more scalable and is a lot more doable for a lot of folks on here, specifically because of the fact that you can just consistently add more and more swing trades, where with day trading, adding more positions is simply going to be a huge challenge.

Anyways, if you have any comments or questions, don't forget to comment below or reach out to us on the zip trader circle Facebook group. Also, if you're interested in swing trading, Weeble is one of the best brokers as well. And of course they have that free stock promotion, so click that link if you'd like to check that out. We also have a free discord chat which is linked to in the Facebook group.

Anyways, have a great day folks and I'll see you in the next video.