Managing an Open Swing Trade

The entry is only the start. Here is how swing traders move stops, take partial profits and decide when to exit, using simple R-multiple rules.

Think in R

R is the amount you risk on a trade: entry price minus stop price. If you buy at $50 with a stop at $48, 1R is $2 a share. Expressing results in R makes trades comparable no matter the stock price or position size. A +3R winner made three times what you were willing to lose.

Targets at 1R, 2R and 3R above entry, with the stop 1R below.

Unlock all of Investing School

The rest of this lesson, its chart examples and quiz are part of Investing School. Start free with Stock Market Fundamentals and the first lesson in every category.