Swing / Position Trader Lesson

In this lesson, you’ll learn how to use MenthorQ’s institutional-grade data to overcome the biggest challenges facing swing traders and position traders. Unlike day traders who monitor markets constantly, swing and position traders typically review data once a day or less frequently, making it crucial to have the right tools to understand market dynamics without being glued to your screen.

The biggest challenge for swing traders is getting in too early and being stopped out before real moves begin, or getting in too late and chasing trends without adapting to volatility shifts. Position traders face the risk of holding positions through big macro regime changes without realizing the risk has flipped, often confusing low volatility with low risk and failing to account for institutional flows that could change their portfolio’s situation.

Many swing and position traders treat the market as static, setting fixed stops and fixed targets while assuming market conditions remain constant. However, the market is dynamic—volatility changes, flows shift, and positioning changes. If you’re not adapting to these changes, you’re essentially trading without context, which can lead to significant losses even when price action appears stable on the surface.

The lesson demonstrates practical examples using Apple and Microsoft positions. In the Apple example, while the chart may look stable with low volatility, the MenthorQ dashboard reveals that implied volatility is increasing, the Q score option shifts from bullish to bearish, there’s big negative positioning, and dealer gamma is turning negative. This allows you to see the calm before the storm and either hedge using options or rebalance your portfolio. For Microsoft, you can use swing trading levels to identify upside targets, monitor the Q score for momentum and option signals, and check the skew to understand call bias or sell bias environments.

The lesson includes detailed walkthroughs of Tesla and CRM positions, showing how to use the Q score for momentum, option, and seasonality score analysis, monitor net gamma exposure across the option chain (with Tesla targeting 450 and watching the strong 400 level and 352 gamma shift), utilize the swing model with success rates (like Tesla’s 458 level where price moved lower on 73% of cases five days later), and analyze the volatility risk premium to determine if implied volatility is high or cheap compared to historical shifts.

Video Chapters

00:16 – Introduction to swing and position traders
00:38 – Key challenges for swing and position traders
02:02 – Apple position example with volatility analysis
03:06 – Microsoft swing trade example
05:07 – Tesla trade walkthrough with Q score and levels
06:59 – CRM position analysis and risk management

Key Takeaways

Swing and position traders must adapt to dynamic market conditions rather than using fixed stops and targets, as volatility, flows, and positioning constantly change
The MenthorQ dashboard reveals hidden risks like rising implied volatility, shifting Q scores, negative positioning, and dealer gamma changes that aren’t visible on price charts alone
Use swing trading levels with success rates to set targets, monitor net gamma exposure for key price levels, and analyze volatility risk premium to determine optimal option strategies
The Q …

Video Transcription
[00:00:16.05] - Speaker 1
Next we're going to quickly over swing traders and position traders. Right. So now let's talk about swing traders and long term position traders. These are really different from day traders or interday scalpers because they actually might. So if you're a swing trader or a position trader, you actually might not be glued to the, to the chart.
[00:00:38.07] - Speaker 1
You might actually look at the data once a day. And basically you're not, you don't have time, so maybe you're working and you don't have really enough time to potentially look at the market every day. So we still have a solution that can be very, very important. So for swing traders the biggest challenge is that you're getting in too early and you're stopped out before the real moves begin or you get in too late and you chase the trend. And basically you don't really adapt to volatility shifts.
[00:01:07.08] - Speaker 1
If you're a position trader, you're actually, you're not trading every day, but you are holding your position through big macro regime changes without actually realizing that the risk has flipped. And again you confusing low volatility withdrawal risk and you don't account for, for institutional flaws that could change the situation of the asset that you have in your portfolio. Right. So very, very important.
[00:01:37.24] - Speaker 1
So the, the other challenge is that swing and position traders usually usually treat the market as static. So they set a fixed stop, fixed target and assume that the market is always the same. But the truth is that the market is dynamic. Volatility changes, flow shift and position changing. So if you are not adapting, then you're basically again trading without a context.
[00:02:02.02] - Speaker 1
So let's go through a very quick example and you are long Apple as a position trademark. Volatility is low and everything looks good. You know, price action is stable and everything feels safe. But then you open up the Mentor Q dashboard and you see that implied volatility is actually getting higher. So it's actually increasing.
[00:02:25.05] - Speaker 1
The Q score option as we showed you before goes from bullish to bearish and we see a big, big negative positioning and dealer gamma is turning into negative. So on the surface just by looking at the chart, everything looks good. But underneath market is actually looking very fragile. So we see a headline, a flow shock, it's Apple and we are selling off and your position takes a big hit. Right?
[00:02:51.14] - Speaker 1
So with Mentor Q again you could have monitored this. You could have seen the come before the storm and either hedge using options or maybe rebalance your portfolio and protect your capital.
[00:03:06.27] - Speaker 1
Next example is you are long Microsoft and you're looking for a Swing trade, the move has been strong, so you're tempted to take profits early. Right. So you are making good return, but you actually want to take profit because you don't want to risk to lose money on your trade. Again, what can you do? You could actually use the mentor queue swing trading levels to potentially look for an upside target that has not yet been reached.
[00:03:30.15] - Speaker 1
You could actually use the Q score and if you see that we are bullish on both the momentum and option score, then that could be a good signal for staying in the trade. Or you could also look at the skew to understand if we are in a call bias or sell bias environment. Right. So instead of cutting your winner short, you can actually hold your trade with confidence. And again, using data to potentially trade and better manage the risk.
[00:03:58.01] - Speaker 1
So here is really what we can do for swing traders. So swing traders struggle with timing. Mentor Q can actually give you some level and some signals, some entries and exit. Position traders struggle with understanding what's going on and what's moving the market. So they lose money sometimes because they don't really understand risk.
[00:04:18.25] - Speaker 1
So again, this is really how you can actually trade. Like a professional, not guessing, but actually looking at data and how to use the models that we provide. Right, so now we're going to go into a short example and then I'm going to close it up with questions because we have FOMC coming on very soon. So I don't want to take too much of your time, guys. All right?
[00:05:07.14] - Speaker 1
Okay, so we're going to look at a couple of examples. So we're going to look at Tesla again. First thing is go again with the Q score. So we are seeing that we are in a very bullish bias on Tesla both at the momentum level, at the option level. And we also see a positive, a positive seasonality score as well.
[00:05:29.02] - Speaker 1
We want to monitor our net gum exposure. So we want to look at the whole option chain and we want to see where the biggest levels are. So we are now targeting 450. We need to be aware of also this 400 level here is very, very strong. And also we have to look for our gamma shift, which is a 352.
[00:05:48.27] - Speaker 1
You can also look at different expirations. So you can also see how this moves throughout the chain. Right. Very, very important. And then we want to look at our swing model.
[00:06:00.00] - Speaker 1
So we want to look at where the levels are. We want to look at the success rate of the models to potentially either build position or manage your position. So if you are already in a Tesla trade, you could use this level to potentially use them as target. So let's say that you are in a long term position on Tesla and The price goes to 458 on 73% of the cases. The price moved lower five days in the future.
[00:06:28.04] - Speaker 1
So this could become your target and you can see how that can be respected there. If you then want to play the stock with more like advanced strategies, you can look at the volatility risk premium. We see that is very high. So implied volatility of Tesla currently is very high compared to the historical shift. So if you are comparing implied volatility with historical volatility, the VRP is actually at probably one of the highest level it has been over the past three months and maybe longer.
[00:06:59.17] - Speaker 1
So again just monitor that within your volatility and then again use the Q score to potentially look for trade ideas or potentially look for managing risk. So for example, another example is, let's go back to CRM. If you were holding CRM in your portfolio, then you can now see that we are in a very, very bearish environment coming from the option market, coming from the momentum and, and you could use also these levels as your, as your level. So if the price were to breach this 229 level then we are in a really dangerous zones. If the upper band resists then maybe we could actually flip to the upside and if we see positioning change on the next few days and weeks then we can see how we can maybe, maybe the narrative has changed.
[00:07:50.17] - Speaker 1
Right. If you look at the volatility, we're now in an undervalued IV stage. So the implied volatility and the volatility risk premium is actually quite cheap compared to the past three months. So maybe buying premium could be a better strategy than selling options in this case.