23 Questions for a Professional Swing Trader About Volume, Risk, and Profit

“Swing trading is among the fastest ways to grow capital if you learn how to properly apply its principles. Swing trading is all about velocity and opportunity cost of capital.”

Meet Ivaylo Ivanov. On StockTwits, he goes by Ivanhoff or the Bulgarian Bread Winner or the Big Time Bulgarian Swing Trader. We actually just made those two nicknames up. But only because if you know Ivanov, you know he’s a great guy with a sense of humor. He’s also actually from Bulgaria and is a full-time swing trader (a really good one).

He’s the founder of MarketWisdom.com and author of well known books such as Top 10 Trading Setups — How to find them, When to Trade them, How to Make Money with them. We recently invited him to participate in a Q&A with everyone on StockTwits. What follows is a recap of that Q&A. We used the #SwingTrading stream for this interview because it speaks to his specialty. If you’re interested in trading, this is for you.

How do you use volume and what’s your favorite thing to look for in volume? Do you look for big moves in volume on a weekly or daily timeframe? — Scheplick

Volume size is highly positively correlated with price range. Big volume equals potential for a big move. If you have a 10X increase in the daily volume, the odds are you’ll have a huge increase in the weekly volume. Big price expansions tend to attract a lot of volume, price momentum brings liquidity.

Do you have a favorite market pattern? What is the one tip you would give yourself if you were starting from scratch? — michaelbozzello

Different patterns work in different markets. Breakouts in high-momentum stocks work amazingly well in bull markets. Read a lot, study great traders, study your own trades, study past winners on various time frames, and find mentors.

When is a chart broken and not worth looking at? What is the reason you avoid a chart or swing trade? — macrochartfreak

“No such thing as a broken chart. There’s an uptrend, downtrend, and a choppy range bound chart. Each requires a different approach.”

How important is multiple time frames analysis? Should I always trade in the direction of the longer-term trend? — kamada3

Multiple time frame analysis improves your odds of success. It depends on your trading time frame. Catalysts that define long-term trends often don’t matter in short-term perspective. Know your time frame.

What is bigger, volume of computers trading or human? — miau

Algorithms account for most of the trading volume, but they often have a differemt time horizon and objectives.

I have missed out on some rallies. What times of the day(IE. 10am) should I be looking for indicators to hold or close? — Skeanthu

Depends on the market environment. In a bull market you don’t need to wait as most great setups follow-through. In a choppy range-bound market, it’s better to wait 15 minutes after the market open and use a smaller position size.

Are you strictly using options? If so why? If not, how are you using them? Thanks! — DeathCubeA

Haven’t used options in awhile. There’s nothing wrong with them. I feel more comfortable trading stocks.

What do you do when trading is halted on a stock you own? — tradingbeast

Check the news flow. There’s not much to do. Sit and wait. It happens, but is extremely rare.

Have read “Top 10 trading setups”. Loved it. What is your favorite setup? Which one is the most statistically successful? — Stas

Thank you for reading it. I like industry relative strength and post-earnings-announcement drift setups the most.

For you and statistically speaking what charts/metrics/time frame has the highest success rate to determine entries/exits? — EstebanD

I use daily and weekly charts for idea generation. Sometimes, 30-min charts to fine-tune my entry and stops.

What indicators do you prefer for identifying stock tops? — stalktwits

Tops are a lot harder to identify than bottoms, because most stocks top individually and bottom as a group. RSI divergence, a big price reversal, and a negative reaction to what seems like a great earnings report often signal a top.

Do you use a fixed percentage risk per trade? How do you handle your Money Management? — michaelbozzello

I usually risk 1% per trade (up to 20% of my capital). I risk 0.25% to 0.5% in choppy directionless markets.

What are your Number 1 rules for going swing long/swing short? — DeathCubeA

1. What’s the current market environment?
2. What are the leading industries?

Risk management is a lot easier if you are in the right setups in the right industry.

What are your thoughts on Water related stocks? Long hold? The new gold? — JohnMC33

Water is heavily regulated by governments. It’s hard to achieve better than average market returns there.

I know you mentioned that you prefer to swing trade stocks, but what are your thoughts about swing trading leveraged ETFs? — rere04

There’s nothing wrong with trading leveraged ETFs, as long as you don’t overstay your welcome. They can be great trading vehicles.

Do you trailing stops in percent of dollars? What about sell target stops after a large profit? — tradingbeast

I sell half on strength (after 3–4 up days in a row). I trail the rest with a 10-day EMA. Sell on a close below it. The goal is to capture hundreds of 5% to 30% short-term moves and keep drawdowns small.

How much money have you lost in a day? How much have you made in a day? — bbear

“My biggest loss so far is $12,000 in a day. My biggest win in one day was $31,000. My biggest win in one week was $78,000.”

What are your favorite books on swing trading? Also which candlestick pattern, if any, do you find most reliable in swing trading? — DeathCubeA

Aside from my own books? ;) There are many great trading books: Brian Shannon, Mark Minervini, W. Oneil, etc. I use candlestick charts, but I don’t really know much about Japanese candlestick patterns.

You said you capitalize on hundreds of small percentage gains. How many securities are you invested in at once on average? Is there a price range for these stocks? — craftbeerdrinkinghipster

Up to 5–6 swing trades at a time, plus some longer-term position trades. Stocks above $3.

Do you take positions outside of what is shown on Market Wisdom site? — planksh

Rarely. Most of my ideas are listed there. The SL50 list is a great source.

What do you do in an environment like the current one?-1SimpleTrader

Trade less, use a smaller position size, and keep a large cash position.

How do you find stocks? — sdieddie

I keep a watch list of stocks and run screens for momentum, big price expansion on big volume, new 52wk highs, etc.

I have an innocent, but serious question. Is the stock market Real? Or, is it just a casino where the house always wins? — Secure

“The stock market is not a game. Where for one party to win another has to lose. It’s a game, where during certain periods, almost everyone may win or nearly everyone may lose.”

We hope you enjoyed this Q&A! Press the blue heart 💙 below if you really liked it and feel free to highlight or comment on any part. We also have a newsletter for anyone interested in getting daily updates about the stock market.

This Q&A was compiled by Michael Bozzello, StockTwits Community Manager and Stefan Cheplick. Make sure you’re following him @michaelbozzello.