# TSX Swing Trading Guide
### Short-Term Stock Trading on the Toronto Stock Exchange (2–10 Day Holds)

> **Scope:** This guide is written for a risk-tolerant, experienced trader targeting short-term (non-day-trade) swings on the TSX. All final decisions remain with the trader.

---

## Part 1 — Top 20 Research Sources

### Official Market Data
| # | Source | URL | What It's For |
|---|--------|-----|---------------|
| 1 | **TMX Money** | money.tmx.com | Official TSX real-time quotes, screener, official data |
| 2 | **BNN Bloomberg** | bnnbloomberg.ca | Canada's #1 live business news, analyst commentary |
| 3 | **Trading Economics** | tradingeconomics.com/canada/stock-market | Macro indicators, CAD/USD, interest rates |

### Independent Research & Analysis
| # | Source | URL | What It's For |
|---|--------|-----|---------------|
| 4 | **5i Research** | 5iresearch.ca | Independent buy/hold/sell ratings on 50+ TSX stocks |
| 5 | **The Motley Fool Canada** | fool.ca | Growth-stock analysis and long-term context |
| 6 | **Simply Wall St** | simplywall.st/markets/ca | Market-wide P/E valuation snapshots |
| 7 | **The Globe and Mail** | theglobeandmail.com/investing | Markets data, earnings calendars, news |

### Technical Charting & Screening
| # | Source | URL | What It's For |
|---|--------|-----|---------------|
| 8 | **TradingView** | tradingview.com/screener | Advanced charting + built-in technical screener |
| 9 | **SwingTradeBot (Canada)** | canada.swingtradebot.com | Canadian swing-trade pattern alerts |
| 10 | **Trade That Swing** | tradethatswing.com | Monthly updated Canadian swing-trade candidate lists |

### Stock Screeners — Canadian Focus
| # | Source | URL | What It's For |
|---|--------|-----|---------------|
| 11 | **Questrade Screener** | questrade.com/learning/how-to-use-stock-screeners | Most powerful free Canadian screener (50+ filters) |
| 12 | **Yahoo Finance Canada** | ca.finance.yahoo.com/screener | Quick valuation and sector filters |
| 13 | **Investing.com Canada** | ca.investing.com/stock-screener | 200+ filters, technical + fundamental combined |
| 14 | **Barchart Canada** | barchart.com/ca/stocks/stocks-screener | Technical indicators, TSX + TSXV coverage |
| 15 | **Aim Arrow** | aimarrow.com | Covers TSX, TSXV, CSE, NEO in one screen |
| 16 | **MarketInOut Canada** | marketinout.com/international/canadian-stock-screener.php | Sector and fundamental screening |
| 17 | **360MIQ TSX Screener** | 360miq.com/screener?market=TSX | TSX-focused technical pattern screener |
| 18 | **TipRanks Canada** | tipranks.com/screener/stocks/canada | Analyst price targets + consensus ratings |

### News, Macro & Broader Research
| # | Source | URL | What It's For |
|---|--------|-----|---------------|
| 19 | **Wealthsimple Learn** | wealthsimple.com/en-ca/learn | Plain-English ratio explanations (P/E, MACD, RSI) |
| 20 | **Kalkine Canada** | kalkine.ca/stock/expertscreeners | Canadian-specific fundamental + technical screeners |

---

## Part 2 — Key Decision-Making Metrics

### 2A. Valuation Metrics

| Metric | What It Measures | Target Range (TSX Swing) | Notes |
|--------|-----------------|--------------------------|-------|
| **P/E Ratio** | Price vs. earnings | 15–25 | TSX market average ~20.5×; below 15 = cheap/watch for value trap; above 30 = expensive unless high-growth |
| **Forward P/E** | Price vs. next-12-month earnings estimate | 12–22 | More actionable than trailing P/E for short-term trades |
| **P/B Ratio** | Price vs. book value | 0.8–2.0 | Below 1.0 = trading below equity; useful for banks & mining |
| **P/FCF** | Price vs. free cash flow | 10–20 | Compare to peers; rising P/FCF without FCF growth = caution |
| **EPS Growth (YoY)** | Earnings-per-share change | 10%+ | TSX consensus EPS growth 2025–26 is ~10%; beat it = strong |
| **Dividend Yield** | Annual dividend / share price | 1–5% | Canadian equities yield more than US; >5% can signal risk |

### 2B. Financial Health Metrics

| Metric | What It Measures | Target | Red Flag |
|--------|-----------------|--------|----------|
| **Debt-to-Equity** | Total debt / shareholder equity | < 1.5 | > 2.5 = high leverage risk |
| **Current Ratio** | Current assets / current liabilities | > 1.5 | < 1.0 = liquidity stress |
| **Interest Coverage** | EBIT / interest expense | > 3× | < 1.5× = debt service risk |
| **Free Cash Flow (FCF)** | Operating cash flow − capex | Positive & growing | Negative FCF for 2+ quarters = avoid |
| **FCF > Net Income** | Cash quality check | FCF ≥ Net Income | If FCF < Net Income, earnings may be low quality |
| **FCF/Debt Ratio** | FCF / total debt | > 0.15 | Indicates ability to pay down debt from operations |

### 2C. Technical Metrics

| Indicator | Settings | What It Tells You |
|-----------|----------|------------------|
| **RSI** | 14-period | Momentum; 30–40 = oversold recovery zone (buy), 60–70 = overbought (caution) |
| **MACD** | 12/26/9 | Trend momentum; golden cross = bullish, death cross = bearish |
| **EMA 20** | 20-period daily | Intraswing dynamic support/resistance |
| **EMA 50** | 50-period daily | Intermediate trend confirmation |
| **EMA 200** | 200-period daily | Primary trend filter — only trade longs above this |
| **ATR** | 14-period | Volatility measure; used to set stop-loss distances |
| **Volume** | 20-day avg | Breakouts and reversals require volume > 20-day average |
| **Bollinger Bands** | 20 MA ± 2σ | Price outside bands = volatility extreme; reversion to middle band = target |

---

## Part 3 — TSX-Specific Considerations

### 3A. The TSX Is Dominated by Three Sectors

| Sector | Weight | Key Names | Swing Characteristics |
|--------|--------|-----------|----------------------|
| **Financials** | ~35% | TD, BMO, RY, BNS, MFC | Stable, dividend-driven; moves on rate decisions & earnings |
| **Energy** | ~18% | CNQ, SU, CVE, TRP | Highly correlated to WTI oil price; volatile swings on supply data |
| **Materials** | ~12% | ABX, AEM, TECK, WPM | Gold/copper/lithium driven; large swings in bull commodity markets |

> **Edge:** When energy or materials commodity prices make a directional move, the related TSX stocks often follow with a 1–2 day lag. This lag creates entries.

### 3B. Canadian Dollar (CAD) Impact
- CAD/USD rate currently ~0.72. A weakening CAD boosts commodity exporters (energy, mining) and multinationals with USD revenue.
- A strengthening CAD pressures those same exporters but benefits importers.
- **Practical tip:** Check CAD/USD direction before entering energy/materials swings.

### 3C. Lower Liquidity vs. US Markets
- Even large-cap TSX stocks trade lower volume than US equivalents.
- Minimum filter: **100,000+ shares/day average volume**.
- Stick to **TSX main board** (not TSXV) unless you specifically understand junior resource stocks.
- Large bid-ask spreads on thin stocks eat into swing profits — check spread before entering.

### 3D. Macro Calendar Events That Move the TSX
- **Bank of Canada rate decisions** (8× per year) — impact financials heavily.
- **US Fed decisions** — moves CAD/USD, which ripples across the TSX.
- **WTI crude inventory reports** (weekly, Wednesday) — moves energy stocks.
- **Gold/copper price** — moves materials names same day.
- **TSX quarterly earnings season** — February, May, August, November.

---

## Part 4 — Step-by-Step Swing Trading Process

### Step 1 — Daily Screening (30 minutes, pre-market or evening before)

**Run two screens in parallel:**

**Fundamental Filter (Questrade or TMX Money):**
- Exchange: TSX (exclude TSXV)
- Market cap: > $500M (adequate liquidity)
- P/E ratio: 12–28
- Debt-to-equity: < 1.5
- Free cash flow: Positive (last reported quarter)
- Daily volume: > 100,000 shares

**Technical Filter (TradingView or Barchart):**
- Price > 200-day EMA (in uptrend)
- RSI (14): 35–65 (not at an extreme)
- MACD histogram: Positive or just turning positive
- Volume ratio: Recent volume > 80% of 20-day average (activity present)

**Output:** Target a list of 15–25 candidates.

---

### Step 2 — Volume & Liquidity Confirmation (10 minutes)

For each candidate, verify:
- [ ] Average daily volume ≥ 100,000 shares
- [ ] Dollar volume (price × volume) ≥ $1M/day
- [ ] Bid-ask spread < 0.5% of share price
- [ ] No earnings announcement within 3 trading days

Remove any stock that fails these checks.

---

### Step 2.5 — Insider Activity Check (5 minutes, SEDI)

For each candidate that passed Step 2, check **sedi.ca** for insider transactions in the past 30 days:

**How to use SEDI:**
1. Go to sedi.ca → "View Insider Transactions" → search by company name or ticker.
2. Look for transactions filed within the past 30 days.
3. Focus on **open-market purchases** (transaction type "10 - Acquisition in the open market").

**Scoring adjustment (add to your Step 3 score):**

| Observation | Action |
|-------------|--------|
| CEO, CFO, or director bought shares in the open market (past 30 days) | **+1 to setup score** |
| Multiple insiders buying (2+) | **+2 to setup score** |
| No insider activity during a multi-week pullback | **Neutral — note it, don't disqualify** |
| Insider *selling* at current price levels | **−1 to setup score** (selling alone isn't a red flag, but selling into a setup you're considering entering is a caution signal) |

> **Why this works:** Canadian insiders must report to SEDI within 5 business days of a trade. Open-market buying by executives is one of the highest-conviction bullish signals available — they're using personal capital with full knowledge of the business. This is the opposite of following analyst consensus: it's watching what informed participants do with their own money.

> **Ignore:** Options exercises, grants, and automatic DRIP purchases — these don't reflect discretionary conviction.

---

### Step 3 — Chart Analysis (30 minutes, TradingView)

For each remaining candidate:

1. Open the **daily chart**.
2. Add: EMA 20, EMA 50, EMA 200, RSI (14), MACD (12/26/9), Volume.
3. Identify:
   - **Primary trend:** Price above or below 200 EMA?
   - **Intermediate trend:** 50 EMA sloping up or down?
   - **Key support/resistance:** Horizontal levels where price has bounced ≥ 2 times.
   - **Current position:** Is price at support (potential long) or at resistance (potential breakout or avoid)?
4. Score the setup:
   - Trend aligned (above 200 EMA) = +1
   - Pullback to 20 or 50 EMA = +1
   - RSI 35–55 (room to run) = +1
   - Volume declining on pullback (healthy) = +1
   - MACD about to cross / recently crossed = +1
   - **Score 3–5 = high-quality setup; score 0–2 = skip**

---

### Step 4 — Select Your Entry Setup (15 minutes)

Choose one of three proven setups:

#### Setup A: Pullback to Moving Average (Most Reliable)
- **Condition:** Stock in uptrend (above 200 EMA), price pulled back to 20 or 50 EMA.
- **Entry trigger:** A bullish reversal candle at the EMA (hammer, engulfing, pin bar).
- **Enter:** At the close of the reversal candle OR above the high of that candle next morning.
- **Stop loss:** Just below the low of the reversal candle.
- **Target:** Previous swing high or 2–3× your risk.
- **Typical hold:** 3–7 days.

#### Setup B: Breakout Above Resistance
- **Condition:** Stock consolidating just below a clear resistance level with at least 2 prior touches.
- **Entry trigger:** Price closes above resistance with volume > 120% of 20-day average.
- **Enter:** On the breakout close or early next session.
- **Stop loss:** Just below the resistance-turned-support level.
- **Target:** Measured move = height of consolidation added to breakout point.
- **Typical hold:** 2–7 days.

#### Setup C: RSI/MACD Oversold Reversal
- **Condition:** RSI drops below 35, then begins to curl upward. MACD histogram starts turning positive.
- **Entry trigger:** Both RSI curling up AND MACD crossing or histogram improving.
- **Enter:** On confirmation candle.
- **Stop loss:** Below the recent swing low.
- **Target:** RSI neutral zone (50–55) or 2× risk.
- **Typical hold:** 2–5 days.

---

### Step 5 — Risk Calculation (5 minutes, non-negotiable)

**The 1% Rule:** Never risk more than 1% of your total trading account on a single trade.

```
Position Size = (Account × 1%) ÷ Stop Loss Distance (in dollars)

Example:
  Account = $50,000
  1% risk = $500
  Entry = $40.00, Stop = $37.50 → Stop distance = $2.50
  Position size = $500 ÷ $2.50 = 200 shares ($8,000 position)
```

**ATR-Based Stop Loss:**
- Calculate ATR (14) on daily chart.
- Place stop loss at `Entry − (2.5 × ATR)`.
- This prevents getting stopped out by normal daily noise.

**Never:**
- Move a stop loss against your position.
- Increase position size after a loss to "make it back."
- Enter without a defined stop loss level.

---

### Step 6 — Define Profit Targets Before Entry (5 minutes)

Set tiered exits before you place the order:

| Exit Level | % of Position | Ratio | Purpose |
|------------|--------------|-------|---------|
| **Target 1** | 30% | 1:1 R:R | Lock in quick profit, reduce risk |
| **Target 2** | 50% | 1:2 R:R | Main profit objective |
| **Target 3** | 20% | 1:3 R:R | Let runner ride with trailing stop |

**Trailing stop for runners:** After Target 1, move stop loss to break-even. After Target 2, trail stop below previous day's low.

---

### Step 7 — Order Placement & Execution

- Use **limit orders** on entry, not market orders (especially important for lower-liquidity TSX stocks).
- Set your stop loss as a **stop-market order** immediately after entry fills.
- Log the trade: entry price, stop, targets, setup type, rationale.

---

### Step 8 — Daily Monitoring (10 minutes/day)

Each trading day while in a position:
1. Check price vs. stop loss — has it been hit? If yes, exit immediately.
2. Check if Target 1 was hit — if yes, reduce position per plan.
3. Adjust trailing stop if Target 2 was hit.
4. Check for company news or sector news that invalidates your thesis.
5. Check earnings date — if earnings fall within your hold window, exit or plan for it.

**Time stop rule:** If a trade shows no movement after 3 trading days, exit and redeploy capital into a better setup.

---

### Step 9 — Exit the Trade

**Exit when ANY of the following occurs:**
- [ ] Stop loss hit → exit 100% immediately, no hesitation.
- [ ] Target 2 hit → exit 80% of position; run final 20% with trailing stop.
- [ ] Target 3 hit → exit 100%.
- [ ] 3 days with no movement → exit and move on.
- [ ] Company news contradicts trade thesis → exit same day.
- [ ] Earnings announcement within 1 day → exit before event.
- [ ] Sector ETF turning down sharply → consider tightening stop or exiting early.

---

### Step 10 — Post-Trade Review (5 minutes)

After every closed trade, log:
- Was the setup valid at entry?
- Did you follow the plan?
- What was the actual R:R achieved?
- What would you do differently?

Review your log weekly. Look for patterns in what's working and what isn't.

---

## Part 5 — Sector-Specific Playbooks

### 5A. Energy Stocks (CNQ, SU, CVE, TRP, ENB)
- **Primary driver:** WTI crude oil price.
- **Entry signal:** Oil price holds above a key support level + stock pulls back to 50 EMA.
- **Watch:** US crude inventory data every Wednesday (10:30 AM ET).
- **Avoid:** Entering before OPEC+ meetings or US energy policy announcements.
- **Key metrics:** Cash cost/barrel, production guidance, pipeline access.

### 5B. Financials (TD, BMO, RY, BNS, MFC, SLF)
- **Primary driver:** Interest rates + credit quality.
- **Entry signal:** Post-earnings pullback to 20 EMA with flat-to-rising net interest margin.
- **Watch:** Bank of Canada rate decisions; quarterly earnings in Feb/May/Aug/Nov.
- **Avoid:** 1 week before earnings unless thesis is earnings-driven.
- **Key metrics:** Net interest margin, loan loss provisions, dividend payout ratio.

### 5C. Materials/Mining (ABX, AEM, WPM, TECK, FM)
- **Primary driver:** Gold, copper, silver spot prices.
- **Entry signal:** Commodity price breaks out of consolidation + stock above 200 EMA.
- **Watch:** USD strength (inverse to gold), China industrial data (drives copper).
- **Avoid:** Junior miners on TSXV unless you understand the higher risk.
- **Key metrics:** All-in sustaining cost (AISC), production growth, reserve life.

---

## Part 6 — Red Flags & Green Flags

### Green Flags (Strengthen the Case to Enter)
- EPS beat expectations 2+ consecutive quarters
- Management raised forward guidance last quarter
- Free cash flow growing > 10% year-over-year
- Sector ETF (e.g., XEG, XFN, ZGD) in uptrend
- Stock showing relative strength vs. TSX Composite
- High short interest being squeezed (check short ratio)
- Institutional ownership increasing (check quarterly 13F equivalents)

### Red Flags (Weaken or Eliminate the Trade)
- Earnings within 3 trading days of your entry
- Debt-to-equity > 2.0 without strong FCF to cover it
- Management (CFO or CEO) departure announced recently
- Dividend cut or suspension in the past 2 quarters
- Volume declining while price drops (distribution pattern)
- RSI below 30 with no reversal candle yet (falling knife)
- Stock below 200 EMA (do not chase longs in downtrends)
- Negative analyst revisions from multiple institutions

---

## Part 7 — Recommended Tool Stack

| Purpose | Tool | Cost |
|---------|------|------|
| **Primary screening** | Questrade Stock Screener | Free |
| **Official TSX data** | TMX Money | Free |
| **Charting & technicals** | TradingView | Free (basic) |
| **Canadian research** | 5i Research | Free / Paid |
| **Live news feed** | BNN Bloomberg | Free |
| **Macro context** | Trading Economics | Free |
| **Analyst consensus** | TipRanks Canada | Free / Paid |
| **Swing candidate lists** | SwingTradeBot Canada | Free |
| **Quick screener backup** | Yahoo Finance Canada | Free |

---

## Part 8 — Quick-Reference Checklists

### Pre-Trade Checklist
- [ ] Stock above 200-day EMA (primary uptrend)
- [ ] RSI between 35–65 (room to move)
- [ ] MACD histogram positive or curling positive
- [ ] Volume ≥ 100,000 shares/day average
- [ ] No earnings within 3 trading days
- [ ] Setup type identified (pullback / breakout / reversal)
- [ ] Stop loss level defined
- [ ] Position size calculated using 1% rule
- [ ] Profit targets set (1:2 minimum)
- [ ] No conflicting macro event today

### Post-Entry Daily Checklist
- [ ] Stop loss still intact? (if hit → exit)
- [ ] Target 1 hit? (if yes → reduce by 30%, move stop to break-even)
- [ ] Target 2 hit? (if yes → reduce to 20% runner, trail stop)
- [ ] Any company news? (if negative → exit)
- [ ] Earnings coming up? (if within 1 day → exit)
- [ ] 3 days without movement? (if yes → consider time stop)

---

## Part 9 — Risk Management Summary

| Rule | Detail |
|------|--------|
| Max risk per trade | 1% of account |
| Minimum risk:reward | 1:2 |
| Stop loss method | ATR-based (2.5× ATR below entry) |
| Max simultaneous positions | 5–8 (diversified across sectors) |
| Capital held in reserve | 20–30% always available |
| Losing streak rule | After 3 consecutive losses, reduce size by 50% and review setup quality |
| Winning streak rule | Do NOT increase size until 3+ months of consistent results |

---

## Part 10 — Glossary of Key Terms

| Term | Definition |
|------|------------|
| **ATR** | Average True Range — measures daily price volatility |
| **EMA** | Exponential Moving Average — weighted toward recent prices |
| **MACD** | Moving Average Convergence Divergence — momentum indicator |
| **RSI** | Relative Strength Index — momentum oscillator (0–100) |
| **FCF** | Free Cash Flow — operating cash minus capital expenditures |
| **P/E** | Price-to-Earnings ratio |
| **P/B** | Price-to-Book ratio |
| **R:R** | Risk-to-Reward ratio |
| **ATH** | All-Time High |
| **EPS** | Earnings Per Share |
| **TSXV** | TSX Venture Exchange — smaller/riskier junior companies |
| **WTI** | West Texas Intermediate — North American oil benchmark |
| **AISC** | All-In Sustaining Cost — key mining profitability metric |
| **Golden Cross** | 50-day MA crosses above 200-day MA (bullish signal) |
| **Death Cross** | 50-day MA crosses below 200-day MA (bearish signal) |

---

*Sources: TMX Money, BNN Bloomberg, 5i Research, TradingView, SwingTradeBot, Trade That Swing, Questrade, Simply Wall St, TipRanks, Yahoo Finance Canada, Investing.com Canada, Wealthsimple Learn, Trading Economics, The Globe and Mail, Motley Fool Canada, Barchart, Aim Arrow, MarketInOut, 360MIQ, Kalkine Canada*

*Last updated: April 2026*