Most aspiring traders cannot achieve consistent profitability. The competitive landscape of trading may look discouraging. Despite hours spent in market analysis and refining strategies, their journey may overwhelm them until they feel frustrated and stagnant in their trading careers
Proprietary trading firms, such as S&B Capital, provide traders with a structured environment that can help them thrive. Here, traders access huge capital and also become part of a culture that continuously creates and learns through mentorship. Such setups give valuable resources, training, and the chance to trade with no personal capital at stake, making them an ideal place for growth.
In this article, we’ll take a look at the strategies of an experienced prop swing trader. With a better understanding of what goes through an experienced trader’s mind and how he approaches his methodology, aspiring traders will have a much easier sense of how to effectively maneuver their way through the intricacies of the market and be empowered to accomplish their financial goals. From finding their key stock to effectively managing their risk, the strategies outlined are designed to arm traders with the knowledge needed to obtain their desired outcome.
Now, Relative Strength and Momentum
Certainly, any prop swing trader needs to recognize one of the main strategies: the relative strength in the markets. Such a strategy is based on the detection of stocks with higher or more enhanced resistance than the benchmark market. For example, analyzing the case of Apple Inc. (AAPL), such a trader finds its recent relative strength, especially after a spate of heavy selling in other tech stocks.
As the market recovers, one looks for a momentum breakout. For Apple, the play is to get long if the stock can continue to print higher lows. In this sense, it is going long around price levels such as $191 or $192. Set a stop lower than recent lows, expecting to catch rapid upward moves as the stock prints higher and higher highs throughout the day.
Strategic Entry and Exit Planning
One of the most important considerations while swing trading is strategic entry and exit planning. In the case of Apple, the strategy of the prop trader entails the following:
- Entry Point: Wait for it to breakout above $193 without experiencing a pullback to confirm that there is indeed an upward sentiment.
- Stop Loss: Set a stop against the low of the day to contain the potential loss.
- Profit Targets: Generally, I like to hit one ATR higher, then work off the intraday price action for further target adjustments.
The trader is reacting rather than predicting. He reacts to what is occurring in the market in terms of price action rather than trying to predict where the market is going. The hard part is patience and discipline, especially when the volume is low or the price action gets a little awkward.
Diversification Strategies: Uber, BNA AI, More
The prop swing trader finds more opportunity in stocks like Uber in addition to Apple.
Uber Turning Point Possibility
In Uber’s case, the trader recognizes a long downtrend and takes a cautious approach. The strategy would be to wait for a break of the previous three-day range, particularly holding above last week’s highs that might suggest the possibility of a multi-day bounce. It would enter long vs. the day low, with a target near $68, ultimately looking to the 50-day moving average at about $70.
In Uber’s case, the trader recognizes a long downtrend and takes a cautious approach. The strategy would be to wait for a break of the previous three-day range, particularly holding above last week’s highs that might suggest the possibility of a multi-day bounce. It would enter long vs. the day low, with a target near $68, ultimately looking to the 50-day moving average at about $70.
BNA AI: Intraday Movements
BNA AI presents another avenue for intraday plays. Once caught in a liquidity trap, the trader will seek out any bounce back into a supply zone between $6 and $7. The objective will be to find a failure to move within that zone to short the stock. The confirmation of lower highs will be required. In this scenario, an opportunity would exist as the stock would simply be moving down into the low fours.
Risk Management: The Way to Victory
Risk management is the most important aspect while trading using the swing trading strategy. This prop swing trader said that they enter multiple alerts on the stocks and then alter their position based on the market behavior. They keep an eye out for IBIT, which consolidates with Bitcoin, and position themselves prior to breakouts.
The trader also watches for intraday pops in stocks such as FFI, into the $80s and $90s, which he looks to short. Having placed these levels as alert lines, he is tuned into market conditions rather than emotions.
Role of Training and Environment
What differentiates prop swing traders is their attitude toward training and the facilitation of the trading environment. Mike Bella Fury, co-founder of S&B Capital, defines the right trader. Training like pros such as NFL or NBA players, professional traders continually hone their skills to improve, reflect on the mistakes committed so they can improve with each trade, and adjust to an ever-changing market.
Proprietary trading firms will offer traders access to coaching, resources, and a community of like-minded individuals all gunning for the top of the greasy pole. This supportive atmosphere not only fosters personal growth but also helps minimize the emotional toll trading can impose.
Conclusion
Thus, the strategies of prop swing traders prove to be quite instructive for potential traders: focus on relative strength; keep well-structured plans for entry and exit; and make use of very disciplined risk management.
The environment developed at proprietary trading firms would become one of the key components that develop a trader. For those who intend to take their trading careers to the next level, embracing such strategies and developing a growth mindset would be the first step along the way to consistent profitability.
As you start trading, consider what strategies appeal to you. Reflect on your experiences and share your thoughts with others. Don’t be afraid to ask for guidance and resources. It is a journey of continuous learning and adjustment, and with that type of mindset, it is completely achievable.