Target – well, I use the last swing high, less a few cents as my target. Of course, I expect the stock to blow through that swing high as the stock is in an uptrend. I don’t use that to figure in my calculations though. If the last swing high was $28.10, then probably better to target just below $28.

Calculate Position Size
First figure out your risk per trade. You can do all the 1% risk per trade later. For now, I’d recommend sticking to a max loss of $30 per trade, even on a $25K account.

Position size = Risk Per trade / (entry – stop).

Then figure out potential risk & profit.

Risk = Position Size * (entry – stop)
Profit = Position Size * (target – entry)

I like my potential profit to be at least 1.5 times the potential loss. You can adjust as you see fit.

Now you will be down to a handful of stocks.

Decide which trades to place
Here’s where you need to look at the fundamentals. People will tell you that you do not need to do this for swing trades, that price action alone can be used. I disagree.

Done properly, it should take you about the same time to look at a stock as it would to choose a meal & bottle of wine in a nice restaurant. The way I look at it – if it keeps me out of more bad trades than good – it’s worth doing.

Note – what you are looking for here are REASONS TO NOT TAKE A TRADE. You are not looking for confirmation of the stock that popped up on your scanner; the scanner is dumb. You are looking to find out why this thing has pulled back & if that is actually evidence of something amiss in the stock.