Swat Trading Challenge its Swat Goal set every year. For this year:
The rules are:
- SWAT starts the year with $3.5k Cash account (with Cash Account, you will not have daytrading limitations)
- Trade from Monday to Thursday (no trading on Friday’s)
- Normal Amount per trade: $1,000 (or 150-200$ for “Lotto” trades) with -15 to -20% Stop Loss (or lower)
- Goal: hit $100k cash into savings account
- Read more on our FAQ about “Stop Loss and Risk Management”
Please note, this is Swat Strategy suggestion, but each trader decision to risk more or less and each trader responsible to manage its own account.
INVESTMENT: $1,000 per Trade
RISK MANAGEMENT: its each trader decision to enter, hold or exit a trade, but our suggestion is:
- Normal trades: -20% stop loss from entry price (example: bought contracts at 1$ –> stop loss at 0.80$ or higher)
Read more on our FAQ about “Stop Loss and Risk Management”
Every trader its responsible for own trading, cut losses and profit taking.
Swat developed his own Risk Management strategy during the last 10+ years of trading. Some key Swat takes:
- Never use “Market orders”: Swat always use “Limit Orders”
- Avoid “Hard Stop Orders”: when Swat is in front of computer, he NEVER uses Hard Stop orders. He always uses “Mental Stops”, so he manage position and if see trade going against him, only than he will set a Limit Order and cut losses. Swat only uses Hard Stop Orders when not in front of pc.
- Cut Losses and Move into next trade: every trader has losses but the secret is implement risk management strategies, cut losses, focus and move into next trade
- On wide bid-ask spreads, Swat usually set limit order a little above middle price. Per example: Bid = 2 and Ask = 4, so Middle price = $3. Swat will set limit order to buy at $3.05 or $3.10
- Ask yourself “How much am I willing to risk and lose?”
Lets say, you invest $1k per trade and your maximum risk is 300$ loss on that trade. You have some alternatives:
- Invest $1,000 per trade and stop trade for -30% loss or
- Invest $600 per trade and increase stop for -50% loss or
- Invest $300 per trade and let trade run
In All above situations, your maximum loss will be only 300$ per trade.
Ask yourself which strategy you prefer to use and stick with that strategy.
No, you do NOT need $25k in your account to daytrade as that only applies for Margin Accounts.
Please contact your broker and ask to change into CASH ACCOUNT.
Wish Cash Account you dont have daytrading limitations and can daytrade as much you want and while have cash on account. Money settlement overnight and next day can start all over again.
(For reference, ETrade and TD Ameritrade both have Cash Accounts)
Swat trades Monday to Thursday from 9:30am EST up to 4pm EST (no trading on Friday’s).
DayTrades – Weekly Options Expiration – These are default trades. Can take few hours for up to 1-3 days duration (depends if momentum holds). RISK: $700 up to $1k per trade (depends on each trader risk).
Swing Long – Monthly Options Expiration – Hold trades up to 2-6 weeks (on average and depends if trend holds). RISK: 5% account per trade (If $20,000 account, invest $1,000 per trade)
Trade Idea: If Swat sees potential good trade he will send one “Trade Idea” so you give it a look . This means Swat did not enter trade. You can get into the trade on this post or not. Always each trader decision and risk!
Entries – Swat will let you know when he bought contracts and open new position with “Open Trade” alert. You can get into the trade on this post or not. Always each trader decision and risk!
Trim profits – Swat will let you know when he start taking profits and reduce risk with “Trim Position” alert. Swat suggests start taking 1/4 or 1/2 position before closing all trade. You can lock some or all profits on this post or not. Always each trader decision and risk!
Exits – Swat will let you know when he sold all his contracts and closed all position with “Close Trade” alert. You can lock some or all profits on this post or not. Always each trader decision and risk!
Unusual Options Activity = UOA – Swat is monitoring all US Options trades going into the market and he will share unusual options activity that catch his attention and he thinks can give a good trade. You can get into the trade on this post or not. Always each trader decision and risk!
Swat Comments – Swat will share with you his view from the market and analysis on possible stock levels to watch, trend changes, market conditions, news, stocks to watch, or any other relevant information to help your trading.
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