IBD Swing Trader Review
Ease of Use
Swing trading is not the easiest of investments, and that’s where a solid swing trading platform can be highly beneficial. IBD Swing Trader is a swing trading platform from Investor’s Business Daily that provides a curated list of stocks available to swing trade. In addition to this list, IBD Swing Trader also includes trading plans, alerts, annotated charts, and more. Does this sound like the swing trading platform you’ve been searching for? Before you dive in, read our complete IBD Swing Trader review!
What is IBD Swing Trader?
Swing Trader from Investor’s Business Daily (IBD) offers a curated list of stocks to swing trade complete with trading plans and alerts. The system is very easy to follow and doesn’t require a huge time commitment. However, IBD Swing Trader significantly underperformed the S&P 500 through the first half of 2021.
So, is IBD Swing Trader worth your time and money? We’ll cover everything you need to know in our IBD Swing Trader review.
How Much Does IBD Swing Trader Cost?
IBD Swing Trader costs $69 per month. You can try out the service for 3 weeks for $9.95.
Trading Strategy & Performance
IBD Swing Trader is built around the CANSLIM strategy, which looks for stocks with seven key characteristics:
- Current quarterly earnings are higher by 20% or more year-over-year
- Annual earnings are higher by 20% over the past 3-5 years
- New products or management are driving headlines and price growth
- Supply of the stock is diminishing due to investor demand or buyback programs
- Laggard stocks within an industry are preferred over leading stocks
- Institutional investors have strong positions in the stock
- Market direction overall is bullish (CANSLIM stocks tend to outperform in bullish markets)
In addition, IBD Swing Trader typically holds trades for 3-10 days and aims for gains of around 5-10%. Most trades have a stop loss set at 3%-5% below the entry point.
Unfortunately, the IBD Swing Trader strategy has seen mixed results. Despite aiming for gains of 5-10% per trade, the service has an average profit per trade of just 1.2% in 2020. In addition, more than 40% of trades were closed for a loss. In the first half of 2021, IBD Swing Trader returned just 11.7% compared to 17.0% for the S&P 500.
What do IBD Swing Trader Members Get?
IBD Swing Trader is simple by design. Most of the information you need to trade can be found on a single dashboard page.
One of the key things you’ll find on that dashboard is the ‘Current Trades List,’ which shows all open trades in the portfolio. The list has a clear Yes/No indicator to show which stocks are in their entry price range, making it easy to see what trades can be executed at any time.
The trade plan that IBD Swing Trader offers for each stock is brief and easy to interpret. You’ll find the entry price range, stop loss, and profit target, as well as a one to two sentence explanation of the movement the trade is targeting. The service also indicates the size of the position you should take. A full position represents 10% of your portfolio, and most trades are recommended as being a half to three-quarters position.
For more detail about the trade setup, IBD Swing Trader offers annotated technical charts. These are useful because they show moving average breakouts and changes in volume alongside the entry, stop, and target prices for a stock. That said, if you’re used to the annotated charts in IBD Leaderboard and Marketsmith, IBD’s flagship service, the charts in IBD Swing Trader may be a little disappointing. Swing Trader charts have significantly less information about support and resistance levels, and there are no monthly price charts available.
Of course, IBD Swing Trader also offers alerts to let you know when new trades are added to the Current Trades List or existing positions are sold. Alerts are only available by email, which is a bit disappointing since the short time horizon that Swing Trader focuses on lends itself well to mobile trading. If you’re worried about missing alerts, you can review recent alerts as well as the entire history of trades that Swing Trader has recommended from your account dashboard.
How Does IBD Swing Trader Compare?
IBD Swing Trader stands out for its focus on swing trading with a time horizon of less than 10 days for most trades. The platform setup is incredibly simple since you can see at a glance not only what positions are open, but also which are still sitting in a buy zone. The brief explanations of why a trade is being targeted and the annotated charts also make it possible for traders to learn while using the service.
Is IBD Swing Trader Right For You?
IBD Swing Trader is designed for swing traders and active traders who want to take advantage of small price movements over weekly timescales. The service doesn’t require a huge amount of time or attention, which is a major plus compared to other swing trading services, and it’s straightforward enough for even beginners to follow.
However, IBD Swing Trader’s historical performance is underwhelming. The service had a win rate of just over 50% in 2020 and it lagged the S&P 500 by more than 5% in the first half of 2021. Unless IBD Swing Trader can consistently beat the market – especially during bullish periods when the CANSLIM strategy should be performing at its best – it’s hard to justify the service’s price tag. Swing traders may prefer using stock picking services like Rule Breakers, Stock Advisor, INO Market Club, and Action Alerts Plus to generate trade ideas. While these services are intended for long-term investors, they have stronger performance records and many of the picks can be swing traded.
- Beginner-friendly trading system
- Entry price range, stop loss, and price target for every trade
- Annotated technical charts for every trade
- Tight stop losses limit downside risk
- Explanations for why each trade is targeted
- Trailed the S&P 500 in the first half of 2021
- Just over half of trades are profitable
- No SMS or on-screen alerts
L- Leading stocks are preferred over Lagging stocks. Yes, it’s advised to look for pivot points and bases, vs. Buying after the breakout. However, Bill O’Neal (Founder of the CANSLIM method, and IBD.) Says to look for Leading stocks, with a RS of 80 or more.
Swing trader is not a good product in my opinion. This product might work well in bull markets but from my experience it continually attempted to buy breakout scenarios which in a bear market is not a good strategy. I also found that some of the trades were run too long before being cut which resulted in decent size hits to my PL. I would not recommend this product at all. During my use I also did not see the use of shorts in the strategy. In my opinion I would not recommend this product.