In a series of educational posts we have covered so far the candlestick patterns and moving average crossovers,
in this post we will elaborately cover the swing trading strategies. Let's start !!
->Definition of swing trading -: Swing trading is generally referred to a trade which is carried out for a short duration of time. Swing traders do not wait
till the price action opposes there direction, they are known for there prior moves.
They are good in identifying the shifts in market trend with the help of various techniques which is explained throughout this idea.
Swing trading strategies include use of Fibonacci, Bollinger Bands, Channel Trading, Moving Average, MACD crossover and better
understanding of chart patterns like Head & Shoulder, Flag, Triangle Patterns.
All the above said patterns has been covered in the previous ideas on continuation patterns.
->Swing trading strategies -:
->Fibonacci Retracement: Stock price has an tendency to retrace, and swing traders uses this retracement as an opportunity to enter in a trend.
The retracement levels could be identified using Fibonacci Retracement, all you need is to identify the prior trend and if price retraces till 0.618 level and
again resumes the trend jump on it and ride the position till it reaches 0.236 level.
->Bollinger Bands: Most probably, stock price tries to move in Bollinger band, which is used by swing trader to initiate and terminate there position.
Firstly you need to identify the major trend, let suppose it's bearish then when the price reaches the upper bound and there is a formation of bearish candle
you could initiate a short position also when a bearish candle is formed at median, there also you can initiate a short position.
->Channel Trading: Sometimes, stock price trades in channel now this channel is used by swing traders i.e. when the trend is bullish they try to take long
position at lower range of channel and book partial profits on median and wait for price to reach upper end.
->Moving Average: Here traders identify the major trend and take position according to it, with help of crossovers they generally prefer 10DEMA crosses 20DEMA.
->MACD: This is a simple strategy where the trades are initiated when there is MACD crossover but the cross should corelate the trend.
My Observation-: These strategies could be more accurate if used to trade with trend, i.e. if the stock is in uptrend only take positions for positive signal and just avoid
negative signals.
Another, basic strategy is to take position when a script moves above swing high or below swing low, here the only thing to ponder is to manage your risk. Don't take over position understand your risk appetite then take positions.
in this post we will elaborately cover the swing trading strategies. Let's start !!
->Definition of swing trading -: Swing trading is generally referred to a trade which is carried out for a short duration of time. Swing traders do not wait
till the price action opposes there direction, they are known for there prior moves.
They are good in identifying the shifts in market trend with the help of various techniques which is explained throughout this idea.
Swing trading strategies include use of Fibonacci, Bollinger Bands, Channel Trading, Moving Average, MACD crossover and better
understanding of chart patterns like Head & Shoulder, Flag, Triangle Patterns.
All the above said patterns has been covered in the previous ideas on continuation patterns.
->Swing trading strategies -:
->Fibonacci Retracement: Stock price has an tendency to retrace, and swing traders uses this retracement as an opportunity to enter in a trend.
The retracement levels could be identified using Fibonacci Retracement, all you need is to identify the prior trend and if price retraces till 0.618 level and
again resumes the trend jump on it and ride the position till it reaches 0.236 level.
->Bollinger Bands: Most probably, stock price tries to move in Bollinger band, which is used by swing trader to initiate and terminate there position.
Firstly you need to identify the major trend, let suppose it's bearish then when the price reaches the upper bound and there is a formation of bearish candle
you could initiate a short position also when a bearish candle is formed at median, there also you can initiate a short position.
->Channel Trading: Sometimes, stock price trades in channel now this channel is used by swing traders i.e. when the trend is bullish they try to take long
position at lower range of channel and book partial profits on median and wait for price to reach upper end.
->Moving Average: Here traders identify the major trend and take position according to it, with help of crossovers they generally prefer 10DEMA crosses 20DEMA.
->MACD: This is a simple strategy where the trades are initiated when there is MACD crossover but the cross should corelate the trend.
My Observation-: These strategies could be more accurate if used to trade with trend, i.e. if the stock is in uptrend only take positions for positive signal and just avoid
negative signals.
Another, basic strategy is to take position when a script moves above swing high or below swing low, here the only thing to ponder is to manage your risk. Don't take over position understand your risk appetite then take positions.
