Lesson 5: Swing Trading
Lesson 5: Swing
market always seem to be heading lower after you hit the buy button?
like your trade to be over soon, because you HATE to watch your P&L go up
disappointed to see that the market ALMOST has met your target gain, only for
it to make a 180-degree reversal and hit your stop loss?
answered YES to any of the above, I have the answer for you.
might be asking, “What’s the Swing Market and Swing Trading and how do they
this article, you’ll learn all you need to know about swing trading — including
3 swing trading strategies which function.
Swing Trading Basics: What is swing
trading and how does it work?
trading is a trading strategy that aims to catch a swing (or “one
is to feel “no discomfort” by quitting your trades before the stress
of opposition arrives.
you’re going to book your earnings before the market reverses, and you’re going
to wipe out your gains.
the pros & cons of swing trading…
don’t need to spend hours in front of your computer because your company lasts
for days or even weeks
perfect for those with full-time work
pressure compared to day trading
won’t be able to ride patterns
got an overnight threat
So far so
Swing trading strategies #1: Stuck
in a box
The swing trading strategies that I’m about to share with you have
“cool” names attached to them.
you better understand the trading system, and to know how to apply it to your
me introduce you to the first swing trading strategy for today…
Stuck in a
swing trading on a variety market because the market is “stuck”
between support and resistance (somewhat like a box).
a range market
for the price to break below Support
the price breaks below Support, then wait for a strong price rejection (close
there is a strong price rejection, then go for a long time to open the next
your stop loss 1 ATR below the candle low and take profits before Resistance
might be wondering:
you stop loss 1 ATR below the candle high?”
that as a swing trader, you’re only searching for “one move” on the market.
order to ensure a high probability of success, you want to exit your trade
before selling pressure steps in (which is Resistance).
make sense to you?
we’re going to apply this idea to the remaining swing trading strategies.
Swing trading strategy #2: Catch
trading strategy focuses on catching “one move” in a trendy market
(like a surfer trying to catch the wave).
concept here is to join after the pullback is over, when the pattern is likely
this doesn’t work for all sorts of patterns.
you want to swap patterns that have a stronger pullback, because there’s more
“meat” towards the upside.
guideline, you want to see a pull back at least to the 50-period moving average
(MA) and higher.
learn how to catch the wave with this swing trading strategy…
a pattern that follows the 50MA
the market is approaching the moving average, then wait for a buoyant price
there is a buoyant price rejection, then go on the next candle
your stop loss 1 ATR below the low and take profits just before the high swing
want more examples?
watch this training video which shows you how to define this swing trading
system step by step
might be asking, “But why the 50-period moving average?” I’m going with the
50MA as investors around the world are watching it so that it can lead to a
normally, the 50MA matches the previous Resistance turned Help, which makes it
doesn’t mean you can’t use 55, 67, 89, or whatever moving average you want,
because the definition is what matters.
Swing trading strategy #3: Fade the
probably thinking, “What’s the sense of fade?”
going against it.
you’re betting against momentum (aka. counter-trends).
So, if you’re
the investor who wants to “go against the crowd,” then this trading
strategy is for you.
a strong momentum shift into Resistance that takes off the previous high
for a strong price rejection as the candle forms a strong bearish close
short on the next candle and set your stop loss 1 ATR above the highs
profits before the nearest swing low
want more examples?
Then go check out this training video below:
How to handle your company so that
you can trade with confidence and conviction
market management, there are two ways you can do it:
1. Passive trade management
process, you’re either going to let the market hit your stop loss or your
target profit — anything between, you’re not going to do anything.
you want to keep your stop loss away from the “noise” of the markets
and have the target gain within a reasonable range (before the key market
is more confident as the actions become more “automated”
can’t leave the company ahead of time even though the market is showing signs
possible to see a winning trade become a full 1R loss
2. Active management
to do this, you will see how the market reacts and then determine whether you
want to hold or exit the trade.
is critical. For an effective approach to work, you need to handle your trades
on your entry timeframe (or higher).
the mistake of doing it on a lower timetable because you’re going to scare
yourself out of a trade with every pullback that happens.
the pros & cons of it.
can reduce the losses instead of getting a full 1R loss
could exit your trade too early without providing enough space to run
trade management is for you, then here are two strategies that you can
bar high / low
technique involves using a moving average indicator to trail your stops.
If the price
does not move beyond the moving average, you must hold on to the market.
does, you’re going to exit the trade.
strategy is useful for swing trading strategies such as Catch the Wave, because the moving average appears to serve as a
dynamic aid and resistance in trending markets.
Previous bar high / low
strategy relies on the previous bar high / low to trail your stop loss.
that if you’re short, you’ll be able to track your stop loss using the previous
market splits and closes above it, you’re going to exit the exchange (or vice
strategy is useful for swing trading strategies like Fade the Move, because the market will easily reverse against you.
So, if the
market shows signs of a turnaround, you don’t want to give your trade too much
room to breathe and quickly cut your losses.
- Swing trading is about making “one move” in the market by exiting your trades before the opposing pressure comes in
- Stuck in a Box is a swing trading strategy tailored to scope markets
- Catch the Wave is a swing trading strategy suited to evolving markets
- Fade the move is a counter-trend swing trading strategy
- Active trade management is more stressful, but you minimize losses