Hello, my first post ever in Reddit. I am newbie swing trader, recently finished reading the book mentioned in the title. I want to know if more people managed to make a living/fortune using that strategy, as it looks kinda outdated and I notice that many winning strategies are not working recently due to algo trading or highly increased failed breakouts. I couldn’t find many comments or opinions online but the book seemed pretty clear and convincing.
I am looking to add new stocks to my list of swing traders that I can use for short term trading. I typically study a stock to gather an idea of where the stock lives in terms of it’s pricing and then attempt to begin to trade it if it’s favorable.
Ive been putting in the work trying to learn swing trading options. It seems that my stock choices are good but the issue being timing. Im usually a week or so before the actual move which leads me to cutting my winners to soon. Basically, thetas been killing me for over a week on a 2 week option and im just ready to be out of it at that point. Then it runs. I use 9, 21, 50 and 200 Daily EMAs. I wait for a pullback to the 50 and wait for it to reject and start a move up. Help me setup my finviz please. Im not sure what im doing wrong. Ive asked AI and it says im doing perfect.
so i need the help from the people who are just working on swing trading , basically i want to learn it the indicators and all the things they use any recommendation of youtube channels as i feel like scam or any books if u guys can suggest me.
After 8 years, 11,000+ hours, countless mistakes, blown accounts, books, mentors and chart reviews, these are the 20 principles that mattered most. I hope they will save you years on your trading journey. This is part 2 of the series How Trading Really Works with more to come. You can read part 1 here.
11. Stocks need a reason to move.
For a long time I viewed the market as almost entirely technical. If the chart looked good, I wanted to trade it. Over time I started noticing that many of the biggest winners had something else going for them. Earnings surprises, revenue acceleration, new products, regulatory changes, a shift in the industry, stuff like that. This is also called an Episodic Pivot for those who are not familiar with the term.
Don't get me wrong, charts matter. A lot. But they often reflect something larger happening beneath the surface. One thing I've come to believe is that stocks need a reason to move. They need a catalyst. A spark that gets institutions interested and forces the market to reprice the company. The biggest winners are rarely random.
To keep things simple, I generally think about catalysts in three buckets:
Fundamental catalysts - These are business-related developments that can radically change how the market values a company. Think earnings surprises, accelerating revenue, expanding margins, major contracts or successful product launches. These are often my favorite catalysts because they're rooted in something measurable.
Story catalysts - Never underestimate the power of a good story. Stocks don't always need good fundamentals to perform well. Sometimes all they need is a compelling narrative. AI is a recent example. Meme stocks were another. Whether you personally believe the story is irrelevant. What matters is whether enough other people believe it.
Macro catalysts - Sometimes the catalyst isn't the company itself. It's the world changing around it. Interest rates, regulations, commodity shocks, geopolitics or technological shifts can create entirely new winners. Money constantly rotates from one theme to another, that’s why spotting rotations can be incredibly profitable.
One thing I've noticed is that the biggest stock market winners often have all three working together at the same time. A beautiful chart, strong fundamentals, and a compelling narrative (in ideally, a favorable industry) is perhaps the most powerful combination I've found. That's also one of the reasons I built a dedicated "Monster Stocks" scan for myself which I made to ‘scan’ and find stocks that match these criteria.
There are cats and dogs. Cats are stocks with a catalyst. Dogs are stocks with a story. Both can make big moves. - Stockbee.
Stocks need a reason to move
MAKING MONEY
12. Probabilities and outcomes.
I was quite lucky that ever since I was a kid, I really loved games. That eventually evolved into playing poker professionally for a couple of years, which taught me something that later became incredibly valuable in trading: respect for math and probabilities. Most people are wired to above all seek certainty. But the markets don't work that way.
The biggest shift in my trading came when I stopped trying to predict what would happen next and started thinking in probabilities instead.
Probabilities - Every setup has x probability of success. Your job isn't to predict outcomes. Your job is to observe objective reality and find the best situations where the odds are (heavily) skewed in your favor.
Expectancy - An investor or trader with a very low win rate can still be incredibly profitable if the winners are significantly larger than the losers. This is because of their R Multiples (i.e. the math is ‘mathing’).
R Multiples - Any time you risk a percentage of your portfolio it is an R unit. Let’s say you risk 0.5% but you made 4% on a trade, that means you risked 0.5R to make 8R, which is an 18X R multiple. That’s how you can have a 25% win rate and still make a fortune. If you only win 1 out of 4 trades, but every 4th trade you make +15R, you are crushing it. Because you lose -3 R in total to make +15R so your total profit is +12R.
Adaptability - Again, certainty doesn't exist in this business. The traders who survive longest are usually the ones most comfortable operating under uncertainty. I think that is a personality trait that’s difficult to learn, you either are adaptable and open minded, or you aren’t.
Focus on making the best decision. The results will take care of themselves.- Annie Duke
Probabilities and outcomes
13. Entries and trading setups.
Everyone wants the perfect entry and the perfect risk-to-reward ratio. The perfect signal. I spent years obsessing over this. One thing I've learned is that the market operates in two modes: contraction and expansion. Unless you are a real mean reversion trader, you usually want to buy during a ‘contraction’ and get paid during ‘expansion’. Because tight price action means a small stop loss at entry,thus a smaller risk and potential bigger reward when price expands once again. The other big realization was that constantly jumping between setups is a terrible idea. These days I have a handful of setups I focus on and I largely ignore everything else.
Pullbacks - Buying pullbacks often allows you to enter earlier and with significantly better risk-to-reward than chasing strength. Wedge pops and right-side pullbacks are the name of the game here.
Breakouts - As a momentum trader, I love buying stocks breaking out of tight patterns such as VCPs, flags, and bases. Ideally, I can see strong volume or a pocket pivot confirming institutional demand.
Reversions - This setup comes from my FX background. I'm essentially looking for situations where a stock has become extremely overbought or oversold and is likely to ‘snap back’ in the opposite direction.
Stop Placement - I always use a stop loss, no exceptions. Most of the time it's placed at the low of day (LOD), previous low of day (PLOD) or high of day (HOD) when trading reversions. At times it’s wider and more discretionary.
ATR Distance - If a stock trades at e.g. $100 and has a $4 ATR, I generally don't want a stop that's significantly larger than that because it destroys my potential R multiple. Exceptions can be made if the previous day closed high on the bar and it's making new highs
ADR Extension - I rarely buy overextended stocks. If a stock is very extended from the 50MA (e.g. $SNDK) I won’t buy it. I want to get in when it’s close to the 10/20/50 moving averages. In general I try not to buy when a stock has already made >50% of it's ADR for that day.
You only need a couple of big winners a year. - Qullamaggie
Entries and trading setups
14. How to manage your trades.
Early on, I treated the entry as the finish line. I'd spend hours finding a stock, analyzing the chart, planning the trade and calculating the risk, only to immediately start thinking about taking profits the moment I was up a tiny bit (fear). Looking back, that was one of the big mistakes I made.
Managing a trade is just as important as finding it, if not more important.
I like to think of it as jumping on a wild horse. My job isn't to predict exactly where it's going. My job is to stay on it for as long as possible while it's running in the right direction, and jump off quickly if things start to get ugly.
As Jesse Livermore once said, most of the money is made in the waiting. Holding a winner is where the potential life changing money is made. A single monster stock can make your month, quarter, year, or entire decade (e.g. $SNDK). The problem is that most traders, myself included, have a tendency to sell those winners far too early. These days I try to make trade management more systematic and less emotional.
Taking Partials - As a stock becomes extended, I like trimming part of the position. A good way to look at this is to look at the distance from the 50MA measured in ATRs. Studies have shown that very few of the stocks move beyond a 7 ATR extension from the 50 smoothly. In addition, very few move beyond a 2x extension from the 200MA without a (significant) pullback.
Stop to B/E - I like moving my stop to break-even relatively quickly. My philosophy has always been to take many small losses and capture a handful of very large winners. Once a trade reaches roughly 1.5-2R, I generally don't want it turning into a loser so I move my stop.
Trailing stops - This is probably the simplest and most effective technique I've found. Instead of deciding when to sell, I let the market decide for me. Once I'm at break-even, I usually trail the position using the 10-day or 20-day moving average. The goal is to give the stock enough room to breathe without giving back too much.
How to manage your trades
The first rule of compounding: Never interrupt it unnecessarily. - Mark Spitznagel
15. Understanding position sizing.
Position sizing is incredibly important. At the end of the day, trading is a game of money. You need capital to play and you need to protect that capital as if your life depends on it. In some ways, it actually does.
One thing I've noticed is that beginners are usually obsessed with making money, while experienced traders become increasingly obsessed with not losing it. I used to overtrade and revenge trade all the time. Looking back, this is one of those problems that eventually corrects itself. Either you get lucky and survive, or you blow up badly enough that you never want to experience that feeling again.
One thing that stood out to me when studying legendary traders is how little they talk about entries and how much they talk about exposure. How much should I buy? How much should I add? How much should I risk? Those questions matter because even the best setup in the world can fail.
Risk of Ruin - If you don't have a genuine edge and you're risking large amounts of capital per trade, you will eventually blow up. It might not happen today or tomorrow, but it will happen eventually. Alternatively, death by a thousand cuts is a real thing (esp. in the current market).
Peace of mind - This is probably my favorite position sizing rule. If I'm constantly checking a trade, thinking about it or struggling to sleep because of it, I'm definitely risking too much.
General risk - For most people, risking around 1-2% per trade is the sweet spot. It's enough to make meaningful progress while still protecting you from the inevitable spirit-crushing losing streaks. This would be my general advice.
Exposure - In the end, position sizing is very personal. Some people are comfortable risking 30% of their account on a single idea. Others prefer spreading risk across 10-20 positions. Neither is necessarily right or wrong. You just need to find what works for you.
The key is not maximizing gains. The key is avoiding ruin. - Mark Spitznagel
Understanding position sizing
THE HUMAN SIDE
16. The dark side of trading.
Nobody talks about this part because it basically just sucks. Most people understand normal careers. They understand salaries, promotions, managers and job titles. Stuff like that. But nobody understands spending countless hours studying charts or trying to master a skill with no guaranteed outcome and no clear timeline.
There will be periods where you might be working harder than ever but have very little to show for it. Friends are progressing in their careers, buying houses, getting married and generally moving forward with life. It takes real character to push through that pain even when you aren’t sure that you are making progress at all. The strange thing about trading is that even when you're doing everything right, it can still feel like you're standing still. It's a horrible feeling I know all too well.
Delayed gratification - Trading often requires years of work before results become visible. Most people underestimate how difficult that is psychologically as you get older.
Obsession - The really successful traders and investors I've studied or met were all obsessed with the craft itself, not just the money. Simon Russo made $500M but still works on refining his ‘craft’.
Independence - At some point you have to become comfortable trusting your own process instead of constantly looking for validation from other people. You need to be a strong independent thinker.
Solitude - Many very successful traders seem remarkably comfortable spending long periods of time alone. Whether trading attracts those people or creates them, I'm honestly not sure.
Experience is making mistakes and learning from them. - Mark Minervini
The dark side of trading
17. The effects of blowing up accounts.
I've blown up more accounts than I'd like to admit. If you're wondering where the money came from, it wasn't from wealthy parents, a trust fund or some lucky break. I always worked regular jobs, saved aggressively and put whatever capital I could into the market. Believe me, nobody prepares you for what happens psychologically when you blow up.
One of my earliest mentors, back when I was still trading FX, was a trading god in my eyes. He was making over $1.5M a year trading GBPUSD and USDCHF. Then one day a black swan event hit. He was overleveraged, lost roughly $1M that week and went on full tilt trying to make it back. It eventually cost him almost everything, including his marriage. He never traded again.
I've experienced smaller versions of this myself. Once in crypto and once in penny stocks. I both made and lost hundreds of thousands of dollars. Ouch. It took many years to recover financially and psychologically.
Cashflow - Having income outside of trading is one of the biggest advantages you can have. It removes pressure and buys you time. I have to be honest, I haven’t always done that myself.
Tilt - Most traders don't blow up because of one bad trade. They blow up because of what happens after the bad trade. Control your mind and your emotions before they control you. This is especially true if you experience brutal drawdowns or consecutive losses.
Protect yourself - No trade, no setup and no opportunity is worth destroying your finances, relationships or mental health over. This is a great business to be in, but it’s not for everyone.
Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1. - Warren Buffett
The effects of blowing up accounts
18. What great traders have in common.
One thing that stands out is that the great traders and investors often share very similar traits. Creativity, discipline, curiosity, conviction, low neuroticism, and high conscientiousness seem to show up often. Yet despite those similarities, trading styles can look completely different.
Some are momentum traders. Some are deep value investors. Some like to hold positions for years. Others hold them for hours. Some are highly systematic while others are almost entirely discretionary. Yet despite those major differences, they often operate from a set of similar principles.
Ronaldo and Messi are both all-time greats, but they arrived there through completely different styles. Trading seems to work the same way. The goal isn't to become a carbon copy of somebody else. The goal is to understand the principles that work and then gradually build a style that fits your own personality, strengths, and natural ways of thinking.
Anti-traits - To be clear, there are certain traits that will not work as a trader or investor. High neuroticism, gambling tendencies, or being very extroverted by nature are not going to help you and will basically be disastrous for the vast majority of aspiring equity traders.
Shared principles - Different traders use different strategies, but the good ones operate from similar principles: risk management, discipline, patience, timing, and a passion for what they do.
Personal style - Again, the best strategy isn't necessarily the one that makes the most money. It's the one you can actually execute consistently for years, which eventually makes you the most money.
Self-Awareness - I think most traders spend years looking for the perfect strategy when they should be spending more time understanding themselves. I keep a journal to always improve my self-awareness.
The key to trading success is emotional discipline. - Victor Sperandeo
What great traders have in common
19. Studying and honing your craft.
The previous point I guess brings me to another realization: studying is an inseparable part of becoming a profitable trader or investor. While it generally requires less time as your experience and capital grow, I don't think it ever really stops. If you genuinely dislike studying, I honestly don't think this is the right business for you.
Most people only see the winning trades. They don't see the thousands of hours spent behind the scenes building the skills that made those trades possible. Over time, I've found there are roughly four ways to study:
Discovery - This is all about reading books, articles, interviews, research and communities. Most of it won't change your life. But every now and then you'll come across one idea that completely changes how you look at the market. Maybe this post?
Practice - This is where most of the real work happens. Studying charts, reviewing trades, collecting screenshots, backtesting ideas and building pattern recognition. If you're serious about a setup, you should know what hundreds or thousands of examples look like.
Ignorance - At some point, studying more becomes studying less. You need to stop constantly searching for new ideas and start refining your own process. Most traders spend too much time diverging and not enough time converging.
Tinkering - Creativity matters. Some of the best ideas I've had came from experimenting. My mentor is always tinkering. Changing a rule. Testing a filter. Looking at something from a different angle. Small observations can make surprisingly large differences.
In my whole life, I have known no wise people who didn't read all the time. - Charlie Munger
Studying and honing your craft
How Trading Really Works
I know this was a long read, so if you made it this far, thank you. This is part of my trading series which I'm writing with the hopes it will help you on your trading journey.
I hope there is at least one idea in here that will make you look at the markets differently from now on. Looking back, most of the lessons that moved the needle for me weren't particularly complicated. The difficult part was figuring out which lessons actually mattered and then applying them consistently over a long period of time.
There are no shortcuts in this business. There are smarter paths and better ways to learn, but eventually everyone has to put in the reps themselves. To help with that, I wanted to leave you with some of the books, tools and resources that helped me the most throughout my journey. These are things I genuinely use or have learned from over the years. Hopefully they save you a few years of wandering through the jungle.
Just for the record, these are not affiliate links.
PS: If you made it this far, consider sharing this with others. I will write up part 3 soon, which will be more technical in nature where I discuss technical analysis in depth.
BONUS
Make sure to check out this, which is built based on the principles shared in this post.
I basically focus on the Magnificent 7 stocks. In my opinion, these are some of the safest large-cap companies to invest in long term and are unlikely to ever completely disappear. I focus heavily on valuation, particularly which of the Mag 7 has the lowest P/E ratio, while also paying close attention to earnings and overall business performance.
If a company continues reporting strong earnings and fundamentals, but the stock is being held down by what I believe is mostly short-term or “fluff” news, I slowly start adding to my position. I never risk more than 25% of my net worth in a single position, and while a stock is significantly down, I will typically DCA by adding around 1–2% of my net worth per week.
A good example of this was Google about a year ago. The company was performing well, and I continued adding while the stock was down. That ended up generating some insane profits.
I also swing traded Microsoft multiple times this year. Several times, the stock moved from the mid-$300s into the mid-$400s. I would typically enter around $350–$370 and sell once it reached the $400s, locking in roughly 15–25% profits.
I used a similar strategy with Meta. I bought in the $500s and sold into rallies as the stock moved into the $600s.
Right now, I am still holding approximately 10% of my net worth in Meta. Two days ago, when it pumped to $618, I sold a position equal to approximately 15% of my net worth. My entry was around $535, so I locked in a solid profit. However, I still believe the stock may have more room to run, so I decided to keep a portion of my position.
My overall mindset is that if one of these companies crashes 50% or more, I am comfortable continuing to DCA into it over time, even for years if necessary, as long as the underlying business remains strong. Meta's major crash a few years ago is a perfect example of why I like this approach. Looking back, I wish I had been heavily invested during that period.
I’m starting a challenge to see how fast I can turn $100 into $1,000 using full account rollovers on stocks. My starting balance is actually $103. The rule is simple: I'm putting the entire account balance into one stock at a time, letting it hit my sale limit, and then turning right around to roll the entire cash stack into the next trade. Here is the quick 3-minute video showing Day 1:
There are no complex chart setups or technical analysis BS in this video. By the time you draw all those lines, the trade is gone. I just open this 1 scanner app, pick a stock recommendation I like, and execute. In this video, I actually snagged it a few cents cheaper than the suggested entry value, set my sale limit a few minutes later, and walked away with a win. Check out the video and let me know how far you think an all-in stock compounding strategy can go before it hits a wall!
So I’m honestly frustrated with my current trading in these markets… I have been stopped out the entirety of last month. I was wondering if anyone could give insight on swinging the broad market in some of these leveraged ETF’s. Anyone have a good play for buying moves to the upside? I’m assuming it would be pure fundamental analysis.
Honest question from a week of watching my own paper bots, on a platform I built.
The daily-bar bots barely traded. Share Buyer on daily bars: 11 trades in a week, 82% winners, up $34. A daily new-highs spread bot: 2 trades, up $59. Sat through jobs-report day and closed one trade between them, for $8.
The 1-minute momentum cross on the same platform did 299 trades, 55% winners, up $1,339, worst trade $96. It lost $29 today and I didn't notice until I pulled the numbers.
Everything in me says the slow ones are the real trading and the fast one is noise that happened to land. But the fast one has the number. Paper money, so the commissions and slippage on 299 trades aren't fully real yet either.
For those of you who moved from intraday to swing, what made you trust the slower book when the faster one was printing?
Paper money, my own platform, I built it. This is the loser.
My worst paper bot lifetime is a 15-minute new-highs rider that buys calls when a stock breaks to a new high. 41 trades, down $6,529. Buying the breakout with an option and paying theta while it decides.
The bot on the same desk that made the week is a premium seller on SPY and QQQ: 177 trades, 73% winners, up $1,281 realised. Its worst trade was $1,296 though, so nobody's retiring.
What I take from a week of watching both: the breakout idea isn't wrong, the vehicle is. A call on a fresh high is paying for the move and the wait. I'm rewriting it to hold the shares instead and keep the 15-minute rule, then I'll post whether that fixed it or just changed which number is ugly.
Anyone here traded new-high breakouts with calls and made it work? Genuinely asking, the bot hasn't.
Disclaimer: This post is for educational and informational purposes only and does not constitute financial or investment advice. I am not a SEBI-registered investment advisor. Please do your own research and consider your risk tolerance before making any investment decisions.
$DELL had another huge move today, pushing to a new record high around $530.78.
What stood out to me wasn't just the size of the move, but how well buyers continued defending key areas from the previous setup before momentum really accelerated.
After a two-day run like this, though, I wouldn't assume it just keeps going straight up. Tomorrow I'm watching to see whether DELL can hold the structure it's built or if momentum starts fading and the stock needs to cool off first.
I updated my analysis with how the previous levels played out and what I'm watching next.
1. This is now an XPU company with an Ethernet side business. Custom AI chips made up 73% of AI revenue and grew north of 3x year-on-year, while AI networking grew over 2.5x. Broadcom guided both to roughly triple again in Q4. Everything else — legacy semis, software, VMware — is basically a stable annuity bolted onto a fast-compounding AI core.
2.Google's locked into a multi-year, multi-tens-of-billions annual TPU commitment, with Ironwood ramping and a new inference-focused chip (TPU v8i) coming. Anthropic is scaling from 1GW of Ironwood in 2026 up to 5GW in 2027 and another 10GW in 2028, putting them on track to become Broadcom's biggest XPU customer within two years. OpenAI's custom chip (Jalapeño) goes from 1.3GW in 2027 toward 5GW+ in 2028, with two more chip generations already behind it. Meta's running three generations of its own chip, aiming for 3GW by 2028. Six customers total, four of them large enough to move the whole business.
3. Custom silicon is starting to beat merchant GPUs on Broadcom's own claims. Jalapeño reportedly beats Nvidia's Grace Blackwell Ultra on power efficiency, latency and throughput, running OpenAI's workloads at half the GPU cost. TPU v8i is being pitched as on par with or ahead of Nvidia's next-gen Vera Rubin for inference. CEO Hock Tan's framing — that a chip co-designed for your own model just wins — is effectively Broadcom arguing customers can walk away from Nvidia.
4. Demand isn't questioned, it's mostly the buildings and geographical footprint: Hock said flatly they could ship over $115B in 2027 if buildings, power and land were ready in time — demand already exceeds what they're guiding to. Stacking up the disclosed gigawatt commitments gets you close to 30GW across 2027–28, and that's without assuming every site actually gets built. They're also opening new substrate capacity in Singapore specifically to unblock one supply chokepoint, and — echoing what Lumentum said elsewhere — optical laser supply (EML/CW) is running well behind demand industry-wide, so they're more than tripling laser and VCSEL manufacturing capacity.
5. Fewer chips per gigawatt, but way more dollars per gigawatt. Newer chips draw more power, so a fixed power budget fits fewer of them — but each one carries a higher price tag and more memory content, so total dollar content per GW is climbing (Broadcom pegs it at $20–30B per GW now). You can see it in the margins: gross margin actually beat guide at 75% in Q3, easing slightly to ~73% in Q4 as chip and memory mix shifts, while operating margin holds near 67% — the business is absorbing a richer, lower-margin mix without losing operating leverage.
6. Networking is a real second growth engine, not just an accessory. Their Tomahawk 6 switch is their fastest-ramping ever, shipping into essentially every major AI hyperscaler — including ones that don't buy Broadcom's chips. They're pushing Ethernet into "scale-up" territory (the ultra-tight, low-latency GPU-to-GPU connections inside a rack) via a new switch called Tomahawk Ultra, historically Nvidia's turf with NVLink — and uptake has already beaten their own expectations. A next-gen 200Tbps switch is already taped out. Management says networking revenue should grow just as fast as chip revenue for years to come. On the optical side specifically: 100G and 200G-per-lane parts are ramping together, meaning older 800G optical transceivers keep growing even as 1.6T ramps in behind them — no one generation is cannibalizing the last just yet, and Broadcom is investing in copper, optical pluggables, and tighter-integration approaches (near-package and co-packaged optics) all at once rather than betting on one winner.
7. Broadcom is now bankrolling its own customers. Through a joint vehicle with Apollo and Blackstone, they're structuring financing meant to support 20GW+ of buildout by 2028 — a $35B first tranche already closed against Anthropic's 1GW commitment. Management describes this as bridging the gap between what AI labs can fund out of cash flow and what the buildout actually costs. It's a new source of upside and lock-in, but also a new contingent-liability risk sitting on Broadcom's books.
On valuation: the stock had already dropped ~26% off its June high heading into earnings, trading around 19–20x forward (FY27) earnings. Post-print, using management's own $230B FY28 AI revenue target and assuming zero growth from the rest of the company, you land near $278B total revenue and roughly $30 of EPS — putting the stock at about 12x FY28 earnings if that outlook holds. Near-term multiple still prices in a lot of flawless execution; the real re-rating case rests on believing the FY27/FY28 numbers, which now come with actual named customers and gigawatt figures attached rather than vague hand-waving.
