Why I wait the last 5 minutes to enter swing trades

Introduction

In this tutorial, we will explore the strategy of entering swing trades just minutes before the stock market closes. This technique, discussed by Tailored Trades LLC, can potentially maximize your trading effectiveness. By understanding the reasoning behind this timing and implementing practical steps, you can enhance your trading approach.

Step 1: Understand the Rationale for Late Entries

Entering trades shortly before market close can be strategic for several reasons:

• Market Sentiment: The last few minutes of trading can reflect the day's sentiment, giving you insights into how stocks might move after hours.
• Liquidity: The final moments often see increased trading volume, which can provide better entry and exit points.
• Price Discovery: Late trading can help you gauge the market's final stance on a stock for the day, aiding in more informed decisions.

Practical Tip

Monitor the stock's price movements and news events leading up to the close to better understand the market sentiment.

Step 2: Prepare Your Trade Plan

Before entering trades, it's essential to have a well-defined plan:

1. Identify Potential Stocks: Look for stocks that have shown volatility or strong movements throughout the day.
2. Set Entry and Exit Points: Determine the specific prices at which you’ll enter and exit the trade, including stop-loss levels to limit potential losses.
3. Use Technical Analysis: Utilize charts and indicators to anticipate price actions as the market nears closing time.

Common Pitfall to Avoid

Do not base your decisions solely on emotions or last-minute news. Stick to your plan and analysis.

Step 3: Execute the Trade

As the market approaches the last five minutes, follow these actions:

1. Monitor the Stock's Movement: Watch for any significant price changes or market news that might affect your chosen stocks.
2. Place Your Order: When your predetermined conditions are met, execute the trade. You can use market orders for immediate execution or limit orders to set your price.
3. Stay Alert: Be ready to adjust your strategy based on real-time market movements.

Practical Tip

Consider using trading platforms that allow you to set alerts for price levels or market conditions to stay informed without constant monitoring.

Step 4: Review Your Trade

After executing your trade, take time to analyze the outcome:

• Evaluate Performance: Check how your trade performed compared to your expectations.
• Learn from Mistakes: Identify what worked and what didn't, adjusting your strategy for future trades.
• Document Your Journey: Keep a trading journal to track your decisions, emotions, and outcomes for ongoing learning.

Conclusion

Entering swing trades just before the market closes can be a powerful strategy if executed with a clear plan and understanding of market dynamics. By preparing your trade, executing effectively, and reviewing your results, you can refine your approach and improve your trading outcomes. As you practice this strategy, consider participating in trading communities for support and further insights. Happy trading!