Top 3 Stocks for Novice Swing Traders

Swing trading can be an exciting and profitable strategy for novice traders. It involves buying a stock and holding it for a few days, aiming to profit from price movements during that time. The key to success in swing trading is choosing the right stocks, and in this article, we will recommend the top three stocks for novice swing traders. These stocks are Meta (formerly Facebook), Microsoft, and Apple. We'll explore their suitability for swing trading and provide insights into their chart patterns and liquidity.

1. Meta (META) - Learning to Trade Trendlines

Meta, formerly known as Facebook, is an excellent stock for novice swing traders to start with. One of the essential aspects of swing trading is understanding chart patterns and trendlines. Meta's stock chart exhibits a clear pattern of upward movement with low points that align. This alignment allows for the identification of a lower trendline.

What makes Meta particularly beginner-friendly is that you can use the 50-day moving average as the lower trendline. You can also draw an upper trendline based on the highs the stock price hits. When Meta reaches the upper trendline, it tends to drop back down to the lower trendline. It's important to note that these trendlines are approximate, and traders need to develop the intuition to recognize when a stock is about to turn.

Meta boasts an average daily trading volume of approximately 28.7 million shares, making it a liquid stock. This liquidity ensures that you can easily enter or exit your position even in times of price fluctuations.

2. Microsoft Corp. (MSFT) - Steady Price Action

Microsoft, like Meta, is an excellent stock for novice swing traders. Its stock follows a similar pattern, and the 50-day moving average can again be used as a rough guide for the lower trendline. While the upper trendline may be slightly more irregular, it provides traders with the opportunity to develop a feel for when the stock may rise or fall.

It's important to acknowledge that the best stocks for swing trading may change over time due to evolving market conditions. However, Microsoft's stock trend remains regular enough that traders can rely on its pattern for a period and become proficient at timing their buy and sell points.

As of February 2022, Microsoft boasts an average daily trading volume of roughly 37.2 million shares, further confirming its liquidity and suitability for swing trading.

3. Apple Inc. (AAPL) - Combining Technical and Fundamental Analysis

Apple Inc. presents a slightly different challenge for novice swing traders. The company frequently makes product launches and announcements that can significantly impact its stock price. As a result, traders must be vigilant about these announcements and monitor how the stock price responds. To effectively swing trade with Apple, it is advisable to observe technical indicators on the chart and combine them with a solid understanding of the company's fundamentals to time your trades accurately.

Despite the added complexity, Apple offers significant trading opportunities for those who can navigate these factors. With an average daily trading volume of over 106 million shares as of February 2022, it is a highly liquid stock that allows for easy entry and exit.

Novice swing traders should start their journey by selecting stocks with established chart patterns and sufficient liquidity. The three stocks recommended here, Meta (formerly Facebook), Microsoft, and Apple, offer a combination of these qualities and are ideal candidates for swing trading. By following these stocks and practicing with paper trades before transitioning to live trades with real money, novice traders can build the skills necessary to identify optimal entry and exit points on the charts.

It's important to keep in mind that market conditions are always evolving, and what works today might not be as effective in the future. Therefore, it's crucial for novice swing traders to continuously adapt and refine their strategies based on changing market dynamics. With the right approach and diligent practice, novice swing traders can embark on a profitable journey in the world of swing trading, and the recommended stocks mentioned here can be their starting point.

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The fundamental premise of technical analysis lies in identifying recurring price patterns and trends, which can then be used to forecast the course of upcoming market trends. Our journey commenced with the development of AI-based Engines, such as the Pattern Search Engine, Real-Time Patterns, and the Trend Prediction Engine, which empower us to conduct a comprehensive analysis of market trends. We have delved into nearly all established methodologies, including price patterns, trend indicators, oscillators, and many more, by leveraging neural networks and deep historical backtests. As a consequence, we've been able to accumulate a suite of trading algorithms that collaboratively allow our AI Robots to effectively pinpoint pivotal moments of shifts in market trends.