About Swing Trading on eTrade

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About Swing Trading on eTrade
About Swing Trading on eTrade (Image: Stock.xchng: Piotr Bizior (bizior))

There are advantages to swing trading on eTrade, particularly if you're an active trader. You'll find some things you might not like if you're not active. Swing trading is nothing more than a style of short-term trading. There are various different techniques and strategies that help the trader decide whether to buy or sell. Many of these require tools, and eTrade has them.

Features

Look for the strategy scanner. The strategy scanner allows you to filter the type of stock you want and strategy you use, and it finds stock that fits that criteria. You can use moving averages, candlestick formation, good support price and many other pre-programmed strategies to search or create your own. You decide to filter only stocks within a specific price range, from a specific market or any of the many filters available to narrow your choice. The tool makes swing trading on eTrade easy, and it doesn't cost you an extra cent if you have an eTrade Pro account.

Significance

Use the "Strategy scanner" to test new strategies and see whether they work. You can develop your own theories, back-test the strategy and find out your success rate without purchasing a stock. Sometimes, things look great on paper but once you try them in the marketplace, you realize that you're losing money hand over fist. By pre-testing ideas, you develop new techniques without the losses.

Free Research

Use the other tools on eTrade. "Market trader" offers all the charts and watch lists and allows you to personalize the screen to fit your style. It allows you to track stocks even by the minute. You can draw your own trend line, too. The area for research includes Bulletin Board securities and even those on the pink sheets. There's analyst research available to you on the platform. It matches stocks to your criteria to make finding the right stock easier. The platform also allows you to set up market alerts so you don't have to constantly screen all the stocks you're watching.

Identification

ETrade offers special costs for the trades if you qualify. To qualify you must execute at least 500 or more trades per month for the lowest price. If you only do 10 to 49 trades or have $50,000 in your account, you qualify for the mid-range price. Otherwise, those that have smaller accounts or don't trade as often should expect the cost to be around $13 for a trade.

Bargains

ETrade offers the first 100 trades free. You must execute these trades in the first month and maintain a balance of $1,000 in your account, and the company reimburses you within eight weeks of the trade. If your account drops below $1,000 you surrender the cost of the trade. This stops people from opening an account just to get the free trades and then closing them once eTrade reimburses the account

Considerations

Swing trading can be active or occasional. Those that are active will enjoy the features of eTrade. The advantages aren't as powerful for those that place only a few trades a month. If you have your own software for your strategy, you might find that it makes more sense to eschew eTrade in favor of a brokerage house that offers lower-priced trades.

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