These reasons behind swing trading and the entry and exit rules are presented very clearly – both the beginner and the experienced swing trader will now have an easy guide to follow. The stocks I consider good swing trading opportunities are made available every day through my MasterSwings service.
Who should read this book
How to get started swing trading
What will this book teach you
Prefaces
Practical Guide to Swing Trading - conveys the essence of his ideas in a simple and straightforward way. One can learn about the essentials of technical analysis with instructions on how to apply these principles to swing trading.
Contact
To make money in the stock market it is necessary to have a disciplined approach to trading. However, once you learn the rules and trade with discipline, you will make money in the stock market.
What is Swing Trading
Swing trading allows you to make money when the market is bullish, or bearish, or simply going sideways. The goal is to make money, not to prop up hopes for the future of a stock, a sector or the economy.
Let’s Look at an Up Trends
While our goal is to keep things simple, the trading rules may seem a bit complex at first.
Let’s Look at a Down Trend
The Steps in Swing Trading
What Can You Expect?
How Do You Identify Stocks that are Appropriate for Swing
What Tools are Available?
Larry Swing uses technical analysis and pattern recognition software (SwingTracker) to identify swing trade candidates. We will describe some of the criteria used to select swing trade candidates in the section titled Pattern Recognition Criteria.
Technical Analysis Measures used to Recognize Swing Trading
To confirm the relative strength behind an uptrend and a pullback, we use a 3-day moving average and a 13-day moving average of the Strength Index. At SwingTracker we provide the two components of this indicator - the Positive Directional Index (+DI) and the Negative Directional Index (-DI) - along with a 20-day moving average based on these two measures (ADX).
WHAT is the Master Plan
Taking a Profit and Preserving Capital
Capital is protected using a “stop loss” order – when the
When you enter a trade (and the decision rule you use) depends on whether the stock has moved up or closed a gap from the previous day's closing price. Under the master plan, a stock is considered to have reached a gap when it opens 50 cents or more above the previous day's close; a gap down is considered when it opens 50 cents lower than the previous day's close. Most often, the share price will open within 50 cents of the previous day's close, neither going up nor down.
The most common occurrence – the stock opens within 50 cents ($0.50) of the previous day's close – the order can be placed a few minutes after the market opens. Occasionally a stock will be 50 cents or more higher than the previous day's closing price - the order is placed at least 30 minutes after the market opens. Occasionally a stock drops 50 cents or more compared to the previous day's closing price. The order is placed approximately 5 minutes after the market opens.
In summary, if the stock is falling in the same direction as the trade, wait 30 minutes, if the stock is falling in the opposite direction of the trade, wait 5 minutes.
How to Enter the Trade
The most common event – the stock opens within 50 cents ($0.50) of the previous day's close – buys the stock when it is trading 6 cents (1/16) above the previous day's high. This increases the chance that the price will move in the direction of the bullish (long) trade. Every now and then a stock goes up or down 50 cents or more. Buy the share as soon as it is 6 cents above the new day's high.
This will be 30 minutes after the market opens for a gap up or 5 minutes after the market opens for a gap down.
What to do After the Trade is Executed
What to do the Day After the Trade is Executed
What happens if the Trade is Not Executed
Once half the shares close at a 7% profit, the other half remains
The Short Swing – how we make money when we think the price
The trade is entered on a day when the price falls below the previous day's low. Interactive Brokers – described in the next section – allow you to enter the three components of the trade all at the same time. As prices change due to buying and selling pressure, information about the condition of the inventory is revealed through the combination of price and volume action.
A strong uptrend should have higher volume on the uptrend legs, and lower volume on the down (corrective) legs. Similarly, strong downtrends usually have higher volume on the downward legs of the trend and lower volume on the upward (corrective) legs. The top line of the box is the high for the period and the bottom line is the low for the period.
The width of the box is what is unique about Equivolume - it represents the volume for the period. The interpretation of market activity using technical analysis gives the investor clues about the future behavior of the price. At www.mrswing.com you will find regular updates in the SwingLab section of the site.
You wait for a pullback before entering the trade, and you only act if the stock shows a sign that the price will continue in the direction of the trend. The general rule is that the value of your portfolio should be at least 50% of the size of the short sale transaction. While your short sale remains outstanding, your account will be charged interest on the value of the short position.
This reduces the volatility of portfolio returns and helps protect portfolio value when prices fall.
Interactive Brokers ...................... Error! Bookmark not defined
Intro
Why does Technical Analysis work?
The Basics
If the trader is long and the stock begins to decline, the trader may be forced to close out the position.
Japanese Candle sticks
Volume
Equivolume
A narrow box, due to the light volume, casts doubt on the validity of an explosion in question. Above Average Volume with SLIGHT price movement Above Average Volume after a large advance or decline Continuation of the trend.
Moving Averages
Force Index
A 3-day MA of Force Index is a very sensitive indicator that shows the short-term battle between the bulls and the bears. And the 13-day MA of Force Index identifies the long-term battle between bulls and bears.
Directional Moving Index
Up/Down/In/Out
Features
SwingTracker allows you to monitor the market in real time with customized Real-Time. Simply select a symbol and you will immediately receive the latest information on that stock. This powerful and easy-to-use software allows you to search by more than 100 criteria, including price, volume and basic information.
The risk parameters are highly defined; The swing trader is a disciplined user of trading STOPS. SwingTracker Technical Indicators allow you to view up to four indicators at once, including our own indicator, IKC Zone, Relative Strength Ranking and Money Flow. Technical analysis is widely regarded as essential to limiting risk and maximizing profit as part of any trading and investment strategy.
With price volatility at an all-time high, it is becoming increasingly important for investors to recognize patterns in the movements of the stocks they own or are interested in purchasing. Here is a complete list of technical indicators used by SwingTracker, the award-winning technical analysis software from IQC Corporation. One of the best features of SwingTracker is its "Scan" feature, which allows you to build your own stock screens to find the specific stocks you want to swing trade.
Starting with SwingLab
Starting to swing
Cut and Paste
Reasons to trade/set up: CLOSE > SMAC50 and CLOSE > SMAC20 (to be sure the stock is still in an uptrend) and HIGH. Traditionally, the premise of investing is that you buy an asset and hold it until it rises enough to make a significant profit, it doesn't get much easier than that. What about those times you come across a stock that you wouldn't invest a cent in, you know that thing is doomed, a sure loser.
If you knew the stock was going to fall, it wouldn't do you any good to profit from its fall. Well, you can profit from a stock's decline, and while it sounds easy, there are significant risks and pitfalls that you should be aware of. The mechanics of a short sale are somewhat complicated and the investor's risks are high, so it is important that you understand the transaction before entering into it.
What does it mean to sell short?
Where Does The Broker Get The Stock?
This is the same account you would use if you wanted to use your shares as collateral to borrow money from your broker. The remortgage agreement allows your broker to lend your shares to a bank or to other clients.
How Do I Sell Short?
You must also pay dividends issued by the company whose stock you have sold short.
Up Tick Rule
Why Sell Short?
The portfolio will then have positions that make money when prices rise and when they fall. By shorting carefully selected stocks that are priced near their highs but will fall sharply if the market declines, an investor can use the profits from the short sales to help offset losses in his long position to protect the value of his portfolio . But she worries that the stock market is vulnerable to a sharp drop and wants to protect her savings while staying invested in the market.
These stocks should be particularly sensitive to a negative shift in sentiment, as optimism is the main driver of their share price. If investors become more pessimistic and the market falls, these stocks should fall more than most. Larry can use the profits from these short sales to offset losses in the rest of his portfolio.
FREE Chart of the Week is a FREE email newsletter dedicated to providing detailed charts on a variety of technical topics, delivered directly to your inbox when updated. Our effort is to write and discuss swing questions that produce daily swing trading opportunities on SwingTracker. The swing trading newsletter is perfect for those who want consistent returns but don't want to sit in front of a computer all day.
