Tuesday, April 30, 2019

Swing Trading Examples

Swing Trading
A. Trade in direction of the markets trend - use the SPY index as the gauge of the markets trend
B. Risk/ Reward can be 1 to 1-1.25 trailing the stop with the low of the prior day or a set Risk reward of 3 to 1 when the overall markets are trending. Example of 3 to1 Risk/Reward: purchase 100 shares of XYZ at 20 with a stop at 19.50. Your exit goal is 3 times the reward, 1.50, at 21.50.Minimal trade management - let the trade play out. (A 1-1 to 1.25 risk/reward ratio with a daily trail stop keeps winners bigger then the losses with the boost of the trend and momentum of the stock behind the trade.)
C. Trade in the direction of the stocks trend with 9,20,50 ema trending in the same direction.
D. Setup 1: Entry is off a Buy/Sell Zone on a pullback with ema support. The pullback candle shows intra-day rejection of this Buy/Sell zone in the form of the daily candle forming a wick by the end of the trading day. Stop placed below the low of the wick.
E. Setup 2: Stock gaps up or WRB through a zone and trades away from the 9ema. Wait for stock to trade sideways/consolidate - will look to enter near the bottom of consolidation when the ema's catch up and a daily candle wick occurs within the consolidation. Stop low of the wick or under consolidation.
F. Entry for trades is anywhere between the top of the daily candle wick and the mid point of the daily candle wick. I recommend entry at the End of the Day before the close or can be the next morning at the open if the trade presents itself.
H. Trades can last  from 2 to 4 days with the 1-1 risk/reward EOD entry or a few days to a few weeks with 3-1 risk/reward entry. 

Below are example trades for both the 3-1 and 1-1 risk/reward ratio.


ABBV: 2 solid setups off sell zones - Both with Daily Wicks off sell zone's - entry bottom of the wick with stop above High of the candle - trading with the trend

CSCO: solid setup Long off a strong Daily wick that formed a buy zone. Stop below the wick entry was 2 days latter as daily bar shows wick rejecting the buy zone. Trade was a loss that turned into a winner. Losses happen - money management as just one trade.

LVS Swing Long off a buy zone - see strong daily wick on the entry candle off the buy zone that formed 6 days earlier - Note LVS is in a trend - keep the odds in your favor - trade with the trend

CELG: Setup 2 - gaps, sideways consolidation with rejection wicks with 9ema support.








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I DO NOT MAKE RECOMMENDATIONS TO BUY OR SELL SECURITIES - I JUST POST TRADES I MAKE OR FIT THE RULES OF MY TRADING PLAN ON A DAILY BASIS. DO YOUR OWN DUE DILIGENCE - YOU ARE RESPONSIBLE FOR YOUR TRADES, INVESTMENTS, AND DECISIONS! ALL CHARTS COURTESY OF TRADESTATION, SCHWAb & TD AMERITRADE