The Beginner's Guide to Swing Trading: What Are Trade Alerts and Why You Need Them

October 12, 2023

Blog & Resources

By Dan Taylor

In an era of instant updates, live data streams, advanced tools, and more markets than ever to take advantage of, swing trading is a technique that many traders are practicing - and for good reason.

Swing trading is a trading strategy where you aim to capture gains in a financial asset, like a stock or ETF, within a period of a few days to several weeks. Unlike day trading, which involves buying and selling within the same day, swing trading allows for a more extended timeframe.

In this article, we’ll help you learn how to use notifications like trade alerts to upgrade your swing trading experience. But before delving into the mechanics of trade alerts, it's important to understand these key components of swing trading:

  • Entry Points: Identifying the optimal time to enter a trade based on technical or fundamental indicators
  • Exit Points: Knowing when to sell your asset, either to lock in profits or to cut losses
  • Risk Management: Establishing stop-loss levels to minimize potential losses
  • Technical and Fundamental Analysis: Using charts, trends, and financial data to make informed decisions

Now that you’ve got your bases covered, let’s get into the details.

Different Types of Trading: Understanding the Spectrum

First, it's key to understand how swing trading fits into trading in general. In the expansive world of trading, strategies are often differentiated based on the time horizon and the specific goals of the trader. Three primary types of trading dominate the landscape:

  • Day Trading: This is the realm of high-frequency trading where positions are often opened and closed within a single trading day. Day traders thrive on the minute-to-minute fluctuations of the market, using real-time data and often advanced algorithms to make quick decisions. It demands constant attention, quick reflexes, and the ability to act without hesitation.
  • Swing Trading: Swing traders operate on an intermediate timeline, holding onto positions for days, weeks, or even months. The goal here is to capture the 'swing' in the prices of assets. They look for short-to-medium term trends and aim to benefit from both the upswing and downswing of market movements. This form of trading requires a keen understanding of market trends, technical analysis, and sometimes even a bit of intuition.
  • Position Trading: Falling on the longest time horizon, position trading can be seen as a more strategic form of investing. Position traders maintain their hold on assets for extended periods, sometimes even years, aiming to profit from long-term price movements. Their decisions are typically based on deep fundamental analysis and a belief in the intrinsic value or future potential of the assets they hold.

What Are Trade Alerts?

Trade alerts are notifications that you receive based on predetermined criteria, like price changes, volume shifts, or other technical indicators. These alerts can be incredibly useful for swing traders who need to monitor multiple assets and market conditions.

How Do Trade Alerts Work?

Trade alerts function through automated systems that monitor the market for specific changes or patterns. Once these criteria are met, an alert is generated and sent to the trader via email, SMS, or through a trading platform. The types of alerts you may encounter include:

  • Price Alerts: Triggered when an asset reaches a particular price level
  • Trend Alerts: Issued when there's a significant change in the direction of the asset's price
  • Volume Alerts: Sent when the trading volume reaches a level that may indicate a potential trend

Upon receiving these notifications, you’re able to get a more complete understanding of each scenario so that you can focus on important research and make a decision in less time.

Why Do You Need Trade Alerts for Swing Trading?

Timing is everything in swing trading. A swing trader seeks to capitalize on price "swings" in a market, which can happen quite quickly. Here, trade alerts serve as your automated assistant, giving you real-time or near-real-time information that can help you make more informed decisions.

Advantages of Using Trade Alerts

The benefits of using trade alerts in your swing trading strategy are numerous:

  • Increased Efficiency: Automated alerts free up your time, allowing you to focus on strategy rather than constantly monitoring charts.
  • Improved Risk Management: Timely alerts help you set stop-losses and take-profits more effectively.
  • Emotional Discipline: Receiving an alert based on rational criteria helps remove emotional decision-making from the trading process.

For example, consider an individual who set up a price alert for a stock they were interested in swing trading. The alert was triggered when the stock hit a predetermined low price, prompting the trader to buy. Similarly, an alert was set for a high sell-point, which was also hit a few days later, allowing the trader to sell for a profit. In this scenario, trade alerts facilitated a more disciplined and efficient trading strategy.

How to Choose the Right Swing Trade Alert Service

Making the correct choice in a swing trade alert service is vital for your trading success. With multiple options available, how do you know which one is right for you?

Features to Consider

When evaluating swing trade alert services, keep the following features in mind:

  • Reliability: Look for a service with a track record of accurate and timely alerts.
  • Customizability: The ability to set alerts based on your specific trading strategy is essential.
  • Ease of Use: An intuitive interface will save you time and stress.
  • Customer Support: Quick and helpful support can be a lifesaver when you’re facing issues.

You need a tool that can work for you, so look for the features that you want. 

It also helps to review community feedback to get unbiased opinions before you commit to a certain tool. Reading user reviews can provide real-world insights into how effective a swing trade alert service is. Pay attention to comments about reliability, ease of use, and customer support so that you can be sure you’re getting something you want to use - not just settle for.

Tips for Maximizing the Use of Swing Trade Alerts

Even the best tools won't be of much help if you don't know how to use them properly. Let's explore some tips to maximize the benefits of using swing trade alerts.

Best Practices

Here are some best practices for using swing trade alerts to your advantage:

  • Backtest Alerts: Before fully committing, backtest the alerts to see how they would have performed in past scenarios.
  • Don’t Overwhelm Yourself: Too many alerts can lead to information overload. Focus on quality over quantity.
  • Continuous Learning: The stock market evolves, and so should your strategies. Keep learning and adapting. Evaluate your swing trade alerts to refine them for better results.

Avoiding Common Pitfalls

Swing trade alerts give you valuable insight, but they don’t solve everything for you. Misuse of trade alerts can cause problems with your process, so avoid:

  • Ignoring Risk Management: Don’t let alerts make you complacent. Always have a risk management strategy in place.
  • Overreliance on Alerts: Alerts are tools, not guarantees. Always use them in conjunction with other forms of analysis.

Add Swing Trade Alerts To Your Strategy With MarketGauge’s Tools

By now, you should have a well-rounded understanding of what swing trading is, what trade alerts are, and why combining the two can be a powerful strategy.

With the right alert service, you’ll receive comprehensive insight and indicators to help you create a customizable trading experience that saves you time and achieves more consistent returns.

Ready to level up your swing trading game? Mish’s Market Minute Advantage Premium provides you with the tools, resources, and mentoring required to become an expert on swing trading, analyzing positions and trends, and growing your portfolio. 

With MMM Premium, you’ll receive trade alerts to your phone or email that include the entry, stop, and context for the trade so that you can learn what to look for and how to best take advantage of the market.

Don’t risk your portfolio with blind trading - get expert insight that guides you towards swing trading success using the best tools and strategies, including swing trade alerts, from MarketGauge.