Swing Trading

Screening Filters

1. Price: 5–150 USD

   • Purpose: Focus on mid-priced, actively tradable stocks and avoid extremes.
   • Rationale:
     • For swing trading, you typically want stocks that move enough to offer profit potential, but not so expensive that position sizing becomes difficult for small/medium accounts.
     • Very low-priced stocks (under $5) are often illiquid, more manipulated, and can gap violently—riskier and less reliable for technical setups.
     • Very high-priced stocks can require larger capital per share and may be less flexible for scaling in/out.

2. Monthly Average Dollar Volume ≥ 500,000 USD

   • Purpose: Ensure sufficient liquidity for entering and exiting swing trades without excessive slippage.
   • Rationale:
     • Swing traders rely heavily on technical patterns; those patterns are more reliable in liquid names where many market participants are trading.
     • Adequate dollar volume (price × volume) helps make sure orders can be filled near expected prices, which is critical when holding for just a few days to a few weeks.

3. Moving Average Relationship: PriceAboveMA20, PriceAboveMA200

   • Purpose: Filter for stocks in established uptrends on both short/medium and long-term time frames.
   • Rationale:
     • Swing trading often means “riding the swing” within a broader uptrend rather than fighting it.
     • PriceAboveMA20: Suggests near-term strength and positive short-term momentum—useful for catching 1–4 week swings.
     • PriceAboveMA200: Indicates the longer-term trend is up, which statistically gives higher odds that pullbacks and bounces resolve higher rather than reversing into long downtrends.

4. Support/Resistance Relationship: PriceAroundSupport

   • Purpose: Identify stocks that are near a technical support level where swing entries are often planned.
   • Rationale:
     • A common swing-trading tactic is to buy near support (a prior low, trendline, or moving average) with a defined stop just below it and a target at a higher resistance area.
     • “PriceAroundSupport” tries to surface names that may be setting up for a bounce—exactly the type of situation swing traders look for to capture a move over the next several days.

5. Exchange List: XNYS, XNAS, XASE (NYSE, NASDAQ, NYSE American)

   • Purpose: Restrict results to major U.S. exchanges with better reporting, liquidity, and oversight.
   • Rationale:
     • Swing traders generally favor well-regulated, widely followed markets where price action is more “orderly” and technical signals behave more reliably.
     • This filter avoids OTC and very low-quality venues where gaps, halts, and erratic moves are much more common.

Why Results Match a Swing-Trading Focus

• Swing trading typically involves holding positions for a few days to a few weeks, trying to capture price “swings” within a trend.
• The filters collectively:
  • Emphasize tradable, liquid stocks (price + dollar volume + major exchanges).
  • Favor uptrending names where swings are more likely to continue in your direction (PriceAboveMA20 & MA200).
  • Target stocks near support, which is a classic swing entry location with clear risk (stop below support) and potential reward (move back toward resistance).

Together, these filters shape a list of candidates that are structurally aligned with how swing traders typically look for and manage trades.