The 5 Secrets to Highly Profitable Swing Trading: Book Review

A Simple, yet Powerful Exploration of Successful Swing Trading.

The secret to profitable swing trading.

I have been involved in the stock market for almost 30 years, and during that time I have read a ton of books on investing and trading. Some of these books have been good.  And some of them have been God awful. But one thing I have found is that the best books are simple.

Though the stock market is a complex beast, the core concepts about how to profit from it don't have to be.  In fact, the simpler a trading or investing methodology is, the truer it is, and the better chance it has to be profitable.

I also have found that the books written by big name investment and hedge fund managers tend to be the least relevant to the average retail investor.  Though they are entertaining to read, not much of how a billionaire invests can be translated to most individual investors.

One of the reasons I absolutely love and wholeheartedly recommend the new book "The 5 Secrets to Highly Profitable Swing Trading" by Ivaylo "Ivan" Ivanov is that it is written in a clear, and easy to understand way.  But that doesn't mean that the concepts presented are not extremely powerful.

What's more important is that the ideas Ivan presents are the same ones he uses -- and has used for the last 10 years -- to trade his own money.  In essence, he is actually putting his money where his mouth is.

The five "secrets" he goes into detail on are;

  1. The Perfect Setup - What and When to Buy
  2. When to Sell
  3. How to Be More Profitable
  1. How to Manage Risk
  2. How and Why to Time the Market

One of the hallmarks of Ivan's trading style -- and something that may surprise most people -- is that instead of looking to get into stocks that are cheap, he tries to find strong stocks that he believes will only get stronger.

This involves looking for stocks that are trading near their highs, have good relative strength, and most importantly, are consolidating.

This consolidation can take place in a number of different forms, but the most desirable is tight, sideways movement.  This price action is creating a "base" from which the next influx of buyers can quickly send the stock higher.

Perhaps the most important secret though is how to manage risk -- because you can't play the game if you don't have the capital.  When it comes to risk, Ivan's focus is on position sizing;

Position sizing is among the most important concepts in trading/investing.  Its purpose is to define our risk in advance.  Position size is defined by the risk we are willing to take.  The bigger the percentage of our capital we are willing to risk, the bigger the position we will take.

The book is also chock full of charts that illustrate real world examples of the concepts he discusses.

It may seem a bold statement, but if I was going to suggest only one book to read on the subject of swing trading, this is the one I would recommend.  It lays down the foundation of knowledge that every swing trader needs to know and doesn't waste your time with superfluous information.

 Photo Credit: Andy Roberts/OJO Images/Getty Images


For more great books on the stock market, check out my list "20 Books Every Investor Should Know About."