5 PROVEN Swing Trading Strategies that WORKS!!
What Do You Do When You Want to Win on Wall Street?
That may seem like a strange question to ask, but it is in reference to swing trading strategies. First, a definition of swing trading.
Swing trading is a short term method used to trade stocks. Its trading positions usually last between 2-6 days. They can last for as long as 2 weeks though.
You use swing trading when you want to identify the general market trend and capture its gains. You need good strategies to do this. Swing trading strategies which work are the subject of this article.
You need to do in-depth technical analysis of the market and create a working plan. You need to do this before implementing good swing trading strategies.
Wait for the Price to Touch the Upper Bollinger Band
The first step to implementing this strategy is to use an entry filter. You want to use the stock price moving into overbought territory as an entry filter. This suggests that the market is about to reverse.
Look for the Stock Price to Break Below the Middle Bollinger Bands
The filter to use would be to look for a break in stock price after the Bollinger Band. You want to see this break before acting with a swing trading strategy. This break signals a clear shift in market sentiment.
Use the Candlestick Method to Decide When to Sell
This method uses the metaphor of a candlestick when analyzing stock price position. You want to see a big bold bearish candle which breaks below the middle of the Bollinger Band.
You want to see breaks in stock price which are below the usual average. This is the first part of the third stock trading strategy.
The second element lies in examining the breakout candle’s final position. When a candle ‘breaks’ in real life, a new life for it starts.
The part of the candle which broke off falls off of the tallow and a new fire starts. When the price of a stock falls below the average, it is reset.
This is when new trading opportunities begin. If you are trading savvy, you should think about selling the stock at this point. This is because you stand to make a lot of money by doing so!
You want the breakout candle to close near the low end of the candlestick. In the world of stocks, this means that you want the price to fall near the low end of the historic average.
When this happens it indicates that strong sellers want to drive the price of the currency pair down.
Remember that this swing trading strategy needs to have simple entry filters. Every swing trading strategy must have simple trading filters for that matter.
The trading filter is the mechanism used to analyze the position of the stock in the market. You want to understand the position of the stock price before acting.
Hide the Protective Stop Loss Above the Breakout Candle Position
You want to build a protective stop loss at some position in the stock price. This is to ensure that you don’t lose money while trading.
The protective stop loss will also tell you the price position of the stock before you decide to take a profit.
The breakout candle shows the price position of stock before it ‘breaks.’ The breakout candle is important because it shows that real sellers exist.
If the price broke at a very high position, it would tell you that no real sellers existed. This is because sellers don’t usually sell a stock at a high position until they see that they can make a good profit.
Sell & Declare a Profit once the Price Breaks, then Close Back Above the Middle of the Bollinger Bands
You want to sell the stock once the price breaks because this is the way you make money in the stock market. If the stock price breaks back above the middle of the Bollinger Bands, it means that more people are selling it.
This action brings the price of the stock down. If you sell then, you are going to lose money. Since no one plays the stock market to lose, you don’t want to do that!
You don’t need to be an Albert Einstein of stocks to make money in the stock market. All you need is some knowledge of stocks.
You also need some trading savvy. After that, all you need to make big profits is knowledge of good swing trading strategy. If you do this, you are sure to make good money in the stock market!