Chartmill Mastering Swing Trading Course

  • The surrounding market environment gives the pattern its true meaning
  • Let volume be your truth detector
    • Volume should support what the pattern is telling you
  • Spot setups, enter trades, place stop losses
  • Every trade should have two things clearly defined before you enter
    • Entry price
    • Stop loss price
    • Difference between the two is the risk per share

Position Size (# of Shares)

  • Formula
    • (Account Capital x % Risk per Trade)/(Entry Price – Stop Loss Price)
  • Example: Risking 1% on a $10,000 account
    • Account Capital: $10,000
    • Risk per Trade: 1% = $100
    • Entry Price: $25
    • Stop Loss Price: $23
    • Risk per Share: $2 (difference between entry price and stop loss price)
    • (10,000 * 1%) / (25-23) = 50 shares of stock to buy

Risk to Reward Ratio (2:1)

  • Entry: $50
  • Stop Loss: $48 9 (risk = $2 per share)
  • Target: $54 (reward = $4 per share
  • R/R Ratio = 4/2 = 2:1
  • Means you’re risking $2 to potentially make $4
  • A 2:1 reward-to-risk ratio means you can be wrong on half of your trades and still make money

Expectancy

  • Forumula
    • (Win Rate x Average Win) – (Loss Rate x Average Loss)

Progressive Exposure

  • Reducing risk when the odds are against you and ramping up when the odds are in your favor.

Fundamental Analysis

  • For those who wish to include earnings/sales trends in their swing trading approach.
  • Not a replacement for technicals, but an extra filter or a way to confirm what the charts are already suggesting.
  • You can succeed relying purely on technicals.
  • Most useful fundamental metrics
    • Revenue Growth (QoQ and YoY) – common benchmark for growth stocks is at least 20% YoY
    • Earnings Per Share (EPS) Growth – focus on stocks with at least 25-50% YoY EPS growth, with anything above 100% being particularly powerful.
    • Profit Margins – how efficiently a business turns sales into profits. Look for above 10-15%.
    • ROIC (Return on Invested Capital) – how effectively it uses capital to generate returns – Look for above 10% (with 15-20% being excellent)
  • Think of fundamentals as filters and confidence boosters, not requirements
  • Mark Minervini’s Trend Template – technical framework designed to make sure you’re only looking at stocks in a strong uptrend.
  • Trading Idea “Trend Template + FA Screen 2”
    • EPS Growth Q/Q > 25%
    • EPS Acceleration over the last 2 quarters
  • Simple filter like “EPS growth > 25%” and Revenue growth > 20%” can already add a meaningful edge without requiring deep fundamental analysis.

Module 6: Situational Awareness – Reading Market Breadth & Sentiment

  • Market’s “State of Play”
    • Two Tools
      • Market Breadth – What the market is doing (behavior). Measures participation.
        • The advance/decline line
        • The percentage of stocks above their 50-day or 200-day moving averages
        • The number of new highs vs new lows
      • Market Sentiment – What investors are feeling (psychology). Gauges mood and risk appetite.
        • Indicators
          • Volatility Index (VIX) – Measures expected volatility in the S&P 500
            • Low (<15) => complacency, often late-stage rallies
            • High (>25-30) => fear or panic, often near short-term bottoms
          • Put/Call Ratios – Compares the volume of bearish puts to bullish calls
            • High (>1.0) => heavy put buying (fear) => contrarian bullish
            • Low (<0.7) => heavy call buying (greed) => caution zone
          • Fear & Greed measures – Aggregates multiple sentiment factors (breadth, volatility, safe-haven demand, etc.)
            • Extreme Fear (<25) => market washed out
            • Extreme Greed (>75) => risk of pullback
          • Investor surveys like AAII
          • Equity money flows (inflows vs. outflows)
  • Market Climate Playbook

Module 7: Where the leaders hide – identifying sector and industry outperformance

  • Defensive Sectors
    • Utilities
    • Consumer Staples
    • Healthcare
    • Hold up well during uncertain or bearish conditions
    • Provide essential goods and services, things people need regardless of the economic climate
    • When investors become risk-averse, money often rotates here for stability
  • Growth Oriented Sectors
    • Technology
    • Consumer Discretionary
    • Industrials
    • Financials
    • Attract capital during the early and middle phases of bull markets
    • Benefit most from economic expansion, improving sentiment, and increasing risk appetite
  • Market Cycle Playbook
    • Bear Market / Late Downtrend
      • Money seeks safety
      • Utilities, Consumer Staples, and Healthcare tend to outperform
      • Growth sectors lag as investors avoid risk
    • Early Bull Market / Recovery Phase
      • Leadership starts to shift
      • Technology, Consumer Discretionary, and Industrials begin to break out
      • Small-cap and cyclical stocks often rally first as risk appetite returns
    • Mature Bull Market
      • Growth sectors lead strongly, and sentiment may become overheated
      • Momentum is broad, but defensive sectors often start showing relative strength again as investors prepare for potential volatility
    • Late Bull / Early Bear
      • Money rotates back into defensives
      • Growth sectors stall, and leadership narrows to fewer names
  • Track stocks hitting new 52-week highs. These stocks are often the early leaders signaling potential sector or industry strength.
    • You can find this under the Performance tab on the Stock Screener
  • ChartMill Market Monitor Page

Module 8: The Trading Journal – Your Edge in Continuous Improvement