The Tech Hardware Cycle: Swing Trading Opportunities in PC, Mobile, and 5G Rollouts

Profit Targets\n\nOur goal is to capture a 3-5R gain on the full position. Hardware cycles can be effective and sustained, so we want to give the trade plenty of room to run.\n

Stop Loss Placement\n\nOur initial stop loss will be placed 1% below the low of the breakout day. We will never risk more than 2% of our trading capital on a single trade.\n

Position Sizing\n\nWith a $100,000 trading account and a 2% risk per trade ($2,000), if the distance between our entry and stop loss is $5 per share, our position size would be 400 shares ($2,000 / $5).\n

Risk Management\n\nWe will focus on hardware companies with a strong track record of innovation and a leadership position in their respective markets. We will also diversify our holdings across several different hardware plays to mitigate the risk of a single product cycle failing to meet expectations.\n

Trade Management\n\nWe will raise our stop loss to breakeven once the trade has moved 1.5R in our favor. We will not add to a winning position in a hardware cycle trade.\n

Psychology\n\nTrading hardware cycles requires a forward-looking perspective. You need to be able to anticipate the next big trend and position yourself accordingly. It is also important to be patient, as it can take several months for a hardware cycle to play out. Finally, you need to be disciplined in taking profits. Hardware cycles are notoriously cyclical, and it is important to sell before the cycle turns.',

"metaDescription": "A strategy for swing trading the tech hardware cycle, with a typical holding period of 4-6 weeks.", "category": "swing-sector" }

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