FOREX swing trading system
Swing Trading System
My name is Brandon Fridrikson. I and Tony Hansen - Advisers to swing trading MTrader. Please note that the methods for swing trading, presented here is aimed at getting profits over a longer period of time, and these differ from the methods of momentum daytrading Ken Wolff.
Swing Trading - a technique aimed at making a profit from the natural 3 - 5 day cycles of the market. first described by George Douglas Taylor in The Taylor Trading Technique. I slightly improved the method of Mr. Taylor, but the main provisions of swing trading coincide with out in his book.
We believe that the swing-trading (With a duration positions 1 - 5 days) - beautiful alternative for the average investor. Many successful traders of the world trade in the style of swing trading .. My purpose - to teach this method and you.
When I first started trading, I it all seemed generally quite complex occupation, in the end I competed with the wisest people in the world and sophisticated institutions. Thus, for me to enter into a transaction was supposed to be balance of power, so that says something Stochastics, and something that Williams% R, in general, I think you imagine the picture. Oddly enough, I lost a lot of money. The main problem with such systems is that they use so many people they do not work very well.
I wanted to be a trader about with the age of 10, so that failures could not be knock me off balance. Funny thing, I had a very simple system, which is shared with me generous broker from Minneapolis, and a trader of Chicago confirmed. I could bring a lot of reasons, why it should not be used. They - brokers, and what use they will not work for me. In fact, this may be true, but the system ECN'S Super DOT and the New York Stock Exchange changed it. I had access, which was almost as good as a broker. The next excuse why I did not had to use it, the system is too simple. In fact, the simple things work very well.
trend trading: One of the main postulates that successful traders tell you if you are able to talk with them, it is not trade against the trend, but it was also the main component of my system. I do not trade against the main trend. If you are trading with the trend, it gives impetus to major stock, commodity, currency or bonds in your favor. Trends always persist until the economic fundamentals reasons not to change them. Traders are so accustomed buy XYZ on pullbacks, it becomes very difficult to change this habit.
IDENTIFICATION OF SIGNALS FOR BUY: The main set of signals to buy that I'm looking for, it's easy to determine. I took away in stock uptrend on the daily chart, preferably also on the week. Then, among I'm looking for them share that last 3 - 5 days trading against the trend. Signals to buy Swingtrade and actions:
action in an upward trend
rollback on daily charts last 3 - 5 days
Set above the maximum signal previous day
When the stock rises by 1 / 8 - 1 / 4 above the previous day, buy it
Put a stop to 1 / 8 - 1 / 4 lower the previous day, avoiding the integers (Tens and fives).
This set can be used and of itself, although I do not advise it. I'm always looking combination, the more evidence, the less risk. Now I want to highlight some of the combinations that you need to look for.
SMALL SUPPORT: Anytime stock price drops to the area of ??support, risk purchases declines. This is especially true for stocks in uptrend. Minor support is defined as region of the peak price on the last ascent. Explained This is because the past becomes a new resistance support.
SUPPORT MEDIUM: Simple Moving Average - a great indicator of the trend in most cases. They also serve as good indicators of areas of support and resistance levels. Major moving averages, which are support in my collection for svingtreyda - 10, 20, and 40 (50). The stronger the action, the lower the value secondary and higher profit potential, so that action which finds support in the 10MA better than 20, and so further.
DOMESTIC RANGE: Day inner band is such that when the scale of minimum to maximum fit completely inside price range in recent days. Breakthrough of inner range, especially in the direction of the prevailing trend, has excellent opportunities for shopping. The reason for this is that Day range is internal vendors becoming less confident in the continuation of the fall shares. Many times when a stock takes off after a bars, formed the day on which the discovery is minimum and closing - the maximum.
THREE DIFFERENT FACE MARKET: Markets There are three different states. The first - Accumulation - Accumulation - when the "smart money" slowly create a position for longer conversations. Y I do not have millions of dollars to spend on analysts, who advised me that the action finally reached the bottom, and I have to start buying, so I ignore this condition. The second face of the market - trending. This middle phase of the market, "the essence" of the movement. This is an area in which I try to focus because the trend is very simple identify and difficult to change. Final Phase markets - distribution - distribution. This is - when everyone "knows" that the action or fly to the moon or go to hell. Here the "smart money" out, and are stupid. We also try to avoid action in this area of ??the market.
TRENDS: It is important to understand that there are always three trends, operating in the market. Long-term trend, which is the domain of investors, and can be seen at the annual, monthly and weekly schedules. Intermediate trend is running swing traders, defined by weekly, daily and hourly charts. Short-term trend - for traders, we see a full-time and intraday charts.
Many will tell you that the only way you can make a big money in the market, is to identify a trend change, and trade on this. I put so much time for it in the corner, I long ago given up on it. In conversations with many these traders that I know how very successful, they emphasized again and again that it is impossible to fight the trend. Never! So the first thing need to do - to define what a trend. That do this, we need a few definitions. We must identify the rising stocks. We need to identify the top-down shares. This is - basis from which to start the movement. Make sure you know the trend before take any action.
upward trend: uptrend - general market price movements, which characterized by a series of lifts, each of which overcomes the previous maximum lift. These climbs interspersed with setbacks, at least each of the which is higher than the previous. In other words, upward trend - a series of higher highs and higher lows.
Bearish: Dauntrend - general market price movements, which characterized by a series of depressions, each of which overcomes at least the previous decline. These lowering alternate lifts, each with a maximum of which is below the maximum of the previous one. In other words, the downward trend - a number lower lows and lower highs. I used determination of the Dow Theory, described Charles Dow and Robert Rhea.
Terms of swing trading MTRADER
Although there is no trade Holy Grail, there are some rules that, if comply with them will keep you in the game, as long as you want stay there. We do not offer anything here new, or some other investment secrets, the most the big secret in the investment world - is that There are no secrets. There are only a few useful Rules:
buy (or sell short)
1) Market order: Rule on a market order is simple - it does not need to use. Market order simply says your broker to execute your order and then, as he can. I am sure that We've all heard these horror stories the most, so that there is no need to repeat them. Always use limit orders, but if you want something more, place an order for a few levels away from the current price. On NASDAQ You. probably get that price, while Specialist NYSE handle Your order is like a market order, but you add their own protection.
2) buy stop order: This type of orders will be very important for those of you who do not fly day spends at the computer. It simply instructs your broker to buy stock as soon as it is trade above a price. Once this price is reached, your order will be executed at most favorable terms possible. So, if we want to buy XYZ above 35, then You need to place your buy stop order at 35 1 / 8. Important note on this type of order - he can not be placed until the market opened.
3) Never rush things: Do not take any action on the market until reached your pre-defined goals. If we We want to buy something above 30, which means at least 30 1 / 16, but rather, 30 1 / 18. This does not mean "Looks like 30 breaks." I can not imagine something as expensive as such assumptions. Buying and short sales are on specific prices, because there are strong reasons for the prices were just there.
4) Never buy a stock 3 / 8 above (or lower with a short sale) of ideal entry price. Are looking for the departed train. Much better once stand aside, than succumb to the heat of the moment and end up taking larger losses than necessary.
5) Never buy stock , the fallen (or grown in a short sale) to 1 / 2 below the ideal entry point, with the exception rule gap.
breaks may be a real danger to your account. If we ordered to buy XYZ above $ 30, but it does break the $ 30 1 / 2 in the first deal of the day, this is obviously true. But often, if you buy on a break, you do it exactly near the high of the day. So there is some Special rules and precautions when we have deal with discontinuities. The rule is quite simple, that's it.
1) Whenever the action showed a gap in the fourth or more of our recommended purchase price, while anything not do it. You must wait 30 minutes and a maximum point for purchase, at least for the short sale. This 30-minute mark you need to see cleared up price. So, for Long to XYZ was announced purchase over $ 55. Offer made gap at 55 1 / 2, so that you do not do anything. After 30 minutes of trading daily maximum was 56 1 / 16. As only 56 1 / 16 is pierced, you should buy. Consider a short sale ABCD , we want to initiate, if it goes below $ 25. Action makes the gap to $ 24 11/16. Again, nothing undertaking, but watching the trade for the first half hour. We note a minimum of 24 3 / 8, as the price we would like to see a broken before do anything. If this price is overcome, we shall enter into a short sale.
2) The second rule break from the sale of open positions. If the open position makes the gap at $ 1 or above the maximum preceding days, actively seek opportunities to exit. Let me give an example of Long's, keep in mind that short - the same thing but in reverse. When you have action, which c did gap at the opening of $ 1 or more, select a minimum of the first 5 minutes. If this price is broken, sell half of your position. Next price that to watch - a 30-minute minimum, and if it overcome, sell the entire position.
3) If we break using a modified stop. Stop for Long - 1 / 8 below the low from the entrance to the position. For Short Stop - 1 / 8 above the high of the day Log in position.
1) In the short-term transactions Sell ??1 / 4 to 1 / 2 of your position if you have increase of $ 2. Of course, you can "leave on the table" most of the potential profit, but it is generally does for us a few things. First, it satisfies the desire to take profits. Second, and most importantly, it will keep us in business for possible higher returns. It works best for large accounts, but also beneficial for those who trades in lots of 200 shares. Take care not to allow the remaining shares slip in negative region.
2) Do not let $ 2, or 5%, or greater increase, to become a loss. It important because it is difficult to find a stock that moving in the right direction, and it is very sorry if you let a good profit turn into a loss.
3) If the stock goes up by 20 % Or more for 3 days, consider leaving half of the position for longer period. Keep the remaining half, while action remains above the 50-day simple moving average, or below it for a short position. Remember Typically N 2, do not let her turn at a loss.