Most trading guides talk about swing trading in theory. You get vague advice like “buy low, sell high” or “follow the trend.” That’s not helpful when you’re staring at a chart trying to decide whether to hit the buy button.
What you actually need are concrete swing trade examples — real setups with specific entries, exits, and stop-loss levels that show you exactly how a trade plays out from start to finish.
That’s what this article delivers. We’ll walk through five swing trade examples based on patterns that repeat across the market every single week.
What Makes a Good Swing Trade?
Before we dive into specific examples, let’s establish what separates a quality swing trade from gambling with extra steps.
A solid swing trade has three ingredients:
- A clear catalyst or pattern that gives you a reason to enter
- A defined risk level where you know exactly how much you can lose
- A realistic profit target based on the chart, not wishful thinking
Swing trades typically last anywhere from two days to a few weeks. You’re not day trading, and you’re not investing. You’re capturing a specific price move and getting out.
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Example 1: The Pullback to the 20-Day Moving Average
This is the bread and butter of swing trading. A stock in a strong uptrend pulls back to its 20-day moving average, finds support, and bounces.
The Setup
Imagine a stock that has been trending upward for several weeks. It makes a new high, then starts pulling back on lighter volume. The price touches or gets close to the 20-day moving average.
How to Trade It
- Entry: Buy when the stock bounces off the 20-day MA with a confirming green candle on increasing volume
- Stop-loss: Place your stop just below the 20-day MA, typically 1-2% below your entry
- Profit target: Aim for the previous high or a 2:1 reward-to-risk ratio
Why It Works
Institutional traders and algorithms respect moving averages. When a trending stock dips to the 20-day MA, larger players often step in to add to their positions. You’re riding their momentum.
This setup has a win rate of roughly 55-65% when you filter for stocks that are already in established uptrends, which is why risk management is still critical.
Example 2: The Breakout From a Consolidation Range
When a stock trades sideways in a tight range for one to three weeks, it’s building energy. When it breaks out, the move can be explosive.
The Setup
Look for a stock that has been trading in a defined range — clear resistance at the top, clear support at the bottom. Volume dries up during the consolidation. Then one day, the stock breaks above resistance on significantly higher volume.
How to Trade It
- Entry: Buy on the breakout candle close above resistance, or on the first pullback to the breakout level
- Stop-loss: Place your stop at the midpoint of the consolidation range
- Profit target: Measure the height of the range and project it upward from the breakout point
Why It Works
Consolidation represents a balance between buyers and sellers. When that balance breaks, all the traders who were waiting on the sidelines pile in at once. The narrower the range and the longer the consolidation, the more powerful the breakout tends to be.
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Example 3: The Oversold Bounce (RSI Reversal)
This is a mean-reversion play. When a stock gets beaten down too far too fast, it often snaps back.
The Setup
Find a stock with a Relative Strength Index (RSI) below 30 on the daily chart. The stock has been selling off for several days, but the broader market or sector is stable. You see a hammer candle or bullish engulfing pattern forming at a known support level.
How to Trade It
- Entry: Buy on confirmation of the reversal candle (price trades above the previous day’s high)
- Stop-loss: Below the reversal candle’s low
- Profit target: The next resistance level or when RSI reaches 50-60
Why It Works
Oversold conditions attract bargain hunters and short sellers covering their positions. When a stock is oversold at a support level with a reversal candle, you have three forces working in your favor at once.
The key is patience. Don’t buy just because RSI is below 30. Wait for the actual reversal signal. Many oversold stocks stay oversold longer than you’d expect.
Example 4: The Earnings Gap and Hold
After a strong earnings report, stocks often gap up and continue running for days or weeks as analysts upgrade their price targets and funds adjust their positions.
The Setup
A company reports earnings that beat expectations. The stock gaps up 5% or more at the open. By mid-morning, the stock is holding its gains or pushing higher — it’s not fading back into the gap.
How to Trade It
- Entry: Buy after the first 30-60 minutes if the stock is holding above the gap-up level. Some traders wait for a mini pullback in the first hour
- Stop-loss: Below the low of the gap-up day
- Profit target: Hold for 3-10 days, trailing your stop-loss below each day’s low as the stock trends higher
Why It Works
Strong earnings create a fundamental reason for re-pricing. When a stock gaps up on earnings and holds that level, it signals that institutional money is accumulating. The follow-through over the next week or two comes from mutual funds, pension funds, and other large players who need time to build their positions.
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Example 5: The Sector Rotation Play
When money flows out of one sector and into another, individual stocks in the receiving sector often set up beautifully for swing trades.
The Setup
You notice that a sector ETF — say, energy or technology — has been outperforming the S&P 500 over the past two weeks. Within that sector, you find individual stocks that are just starting to break out of their own bases.
How to Trade It
- Entry: Buy the strongest stocks in the strongest sector when they break out of their individual chart patterns
- Stop-loss: Below the breakout level of each individual stock
- Profit target: Hold as long as the sector rotation continues; exit when the sector ETF starts underperforming
Why It Works
Sector rotation is driven by macroeconomic shifts, policy changes, or earnings cycles. When big money rotates into a sector, it creates a rising tide that lifts many stocks. By picking the leaders within that sector, you’re aligning with the strongest force in the market.
How to Practice These Setups Without Risking Real Money
Before you put real capital behind any of these examples, paper trade them. Track at least 20-30 trades using each setup and calculate your win rate and average reward-to-risk ratio.
Most brokerages offer paper trading accounts. You can also use a charting platform to go back in time and manually walk through historical examples to see how each setup would have performed.
The goal isn’t to find a setup that wins 100% of the time. That doesn’t exist. The goal is to find setups where your winners are bigger than your losers and you can execute them consistently.
Building Your Swing Trading Playbook
The best swing traders don’t use every setup they know on every trade. They have a focused playbook of two or three patterns they know inside and out. Here’s how to build yours:
- Start with one setup. Master the pullback to the 20-day MA before adding anything else
- Track everything. Log your entries, exits, reasoning, and emotions for every trade
- Review weekly. Look at what worked, what didn’t, and whether you followed your rules
- Add complexity slowly. Once you’re consistently profitable with one setup, add a second
The swing trade examples in this article are starting points. Your job is to refine them based on the stocks you trade, the market conditions you trade in, and your own risk tolerance.
Frequently Asked Questions
What is the best time frame for swing trading?
The daily chart is the primary time frame for swing trading. Most swing traders use daily candles for their main analysis and drop down to the 4-hour or 1-hour chart to fine-tune their entries. Avoid using anything below the 1-hour chart for swing trading — that’s day trading territory.
How much money do I need to start swing trading?
You can start swing trading with as little as $2,000-$5,000, though $10,000 or more gives you better flexibility for position sizing. If you’re trading stocks (not options), you’ll want at least $25,000 to avoid pattern day trading restrictions, although swing traders typically make fewer than four round-trip trades per week anyway.
What is the average return for swing trading?
Skilled swing traders target 2-5% per trade, with monthly returns ranging from 5-15% in good market conditions. However, most beginners lose money in their first year. The key to consistent returns is strict risk management — never risk more than 1-2% of your total account on any single trade.
How do I find stocks for swing trading?
Use a stock screener to filter for stocks with high relative volume, price above the 20-day and 50-day moving averages, and RSI between 40-70. Focus on stocks with average daily volume above 500,000 shares so you can enter and exit without slippage. Earnings calendars and sector heat maps also help identify upcoming opportunities.
Can AI tools help with swing trading?
Yes. AI-powered tools can scan thousands of stocks simultaneously, identify chart patterns faster than any human, and backtest strategies across decades of data. They’re especially useful for finding setups that match your criteria and alerting you when a stock enters your target zone, freeing you to focus on execution and risk management rather than endless screen time.