20-day moving average
When looking for a long swing, we would like to identify stocks that areexperiencing a brief decline (pullback). We can identify a 3-day pullback as follows.
•
Today’s high price is lower than yesterday’s high
•
Yesterday’s high is lower than the high the day before
We also use a technical indicator developed by Dr. Alexander Elder called the ForceIndex. This index combines the magnitude of the price change with the direction ofthe change and the trading volume. In order to confirm the relative force behind anuptrend and a pullback, we use a 3-day moving average and a 13-day movingaverage of the Force Index. The following conditions demonstrate that the bearshave been winning the short-term battle while bulls are dominating the longerframe:
•
The 3-day moving average of the Force Index is less than 0, and
•
The 13-day moving average of the Force Index is greater than 0
Another technical indicator we like to use is the Directional Movement Index (DMI)that was developed by J. Welles Wilder Jr. It is used to determine whether a stock istrending or not trending (i.e., moving sideways). In SwingTracker we provide thetwo components of this indicator – the Positive Directional Index (+DI) and theNegative Directional Index (-DI) – along with a 20-day moving average based onthese two measures (ADX). An uptrend is confirmed if …
•
ADX is higher than 30
•
+DI is greater than –DI
Our most successful pattern recognition formulas are available to all visitors (free ofcharge) at www.mrswing.com in the SwingLab section of the web site. You cancopy the formulas into SwingTracker and scan all listed stocks at any time.. Theseare the same formulas that provide the MasterSwings recommendations. Theformulas will be built into the next version of SwingTracker.
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6 The Master Plan – Entry and exit rules thatinsure successful swing tradingThe secret to swing trading success is:Confidence, Discipline, Focus and Patience
6.1 WHAT is the Master PlanThe Master Plan is a set of rules that determines when to enter and exit a trade. Atfirst, it might seem a little complicated, but once you have place a few trades usingthe system, you’ll realize it’s really quite simple. The best part about the MasterPlan is that you don’t need to use judgment. The rules are mechanical. Twoobstacles to successful trading are the human emotions of fear and greed. Byfollowing the Master Plan, these emotions will not influence your behavior, nor willthey interfere with your success.To keep it simple, we’ll first focus on the long trade. The rules for a short trade aresimply the mirror image of the rules for a long trade. An example of a long swingopportunity is shown below. The price has declined (pulled back) and you are bullishon the stock.
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6.2 Taking a Profit and Preserving CapitalAn important aspect of the Master Plan is setting a profit target and preservingcapital. The approach is fairly conservative – the profit target is approximately 7%with a potential loss capped at 4%. The actual profit is likely to be more than 7%while a loss is likely to be smaller than 4%. Here’s how it works.
•
Once the target price is reached (7% above the entry price), half of theshares are sold, locking in a 7% profit. The other shares remain invested tobenefit from any further increase in price.
•
If the price moves against the trade, the maximum loss tolerated is 4%. Thispreserves capital for future trades.
•
Typically, more trades will produce a profit than a loss. The net result isprofit.
•
The movement of the entire market is very powerful. When the market ismoving with your trades, a very high percentage of your trades will beprofitable.
•
When the entire market is moving against your trade, a higher than expectedpercentage of your trades will lose. The stop loss protects you fromexcessive losses.
6.2.1
Profit is taken using a “sell limit” order – once theprice is reached, the specified number of sharesare sold.
6.2.2
Capital is protected using a “stop loss” order –when the stop price is reached, all the shares aresold.
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Buying AFTER the open is BETTERWait a few moments to allow the market tobreath normally
6.3 When to Enter the TradeUsing the Master Plan, swing trading opportunities are identified after the marketcloses. Trades are entered in the morning, usually within the first half hour oftrading. When you enter the trade (and the decision rule you use) depends onwhether or not the stock has gapped up or down from the previous day’s closingprice. According to the Master Plan, a stock is considered to have gapped up whenit opens 50 cents or more higher than the previous day’s close; it is considered tohave gapped down when it opens 50 cents lower than the previous day’s close.Most frequently, the stock price will open within 50 cents of the previous day’sclose, neither gapping up nor gapping down.
•
The most common occurrence – the stock opens within 50 cents ($0.50) ofthe previous day’s close – the order can be placed a few minutes after themarket opens.
•
Occasionally a stock gaps up 50 cents or more compared to the previousday’s close – the order is placed at least 30 minutes after the market opens.
•
Occasionally a stock gaps down 50 cents or more compared to the previousday’s close – the order is placed approximately 5 minutes after the marketopens.
•
To summarize, if the stock gaps in the same direction as the trade, wait 30minutes, and if the stock gaps in the opposite direction of the trade, wait5 minutes.
6.4 How to Enter the TradeAs with when to trade, how to enter depends on whether the stock gaps up/downor not. Typically, the stock price doesn’t gap up or down and the entry price isbased on the previous day’s prices. When the stock gaps up or down, the entry priceis not based on the previous day’s prices, but on the current day’s prices. Whether
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based on the previous day’s prices or the current day’s prices, the entry rules are thesame.
•
The most common occurrence – the stock opens within 50 cents($0.50) of the previous day’s close – buy the stock the moment it trades6 cents (1/16) above the previous day’s high. This can be accomplished byusing a buy stop order. This increases the likelihood that the price is movingin the direction of the bullish (long) trade.
•
Occasionally a stock gaps up or down 50 cents or more – buy the stockthe moment it trades 6 cents above the high of the new day. This would be30 minutes after the market opens for a gap up or 5 minutes after themarket opens for a gap down.
6.5 What to do After the Trade is ExecutedOnce the trade is executed, the exit orders are placed.
•
The profit order – a sell limit order is placed at a price that is 7% above theentry price.
•
The capital preservation order – a sell stop (stop limit) order is placed at4% below the entry price OR 6 cents below the low of the day that wasused for the trade (whichever is higher) – for a stock that opened without agap the previous day sets the prices; for a stock that opened with a gap, theprice action before the day (high and low) sets the prices.
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6.6 What to do the Day After the Trade is ExecutedAs with when to trade and how to enter, the following day’s activity depends onwhether the stock gaps up/down or not. If the stock price doesn’t gap up or down,the stop loss is changed based on the previous day’s prices. If the stock gaps up ordown, the stop loss is changed based on the current day’s prices. Whether basedon the previous day’s prices or the current day’s prices, stop loss rule is the same.
•
When the stock opens within 50 cents ($0.50) of the previous day’sclose – if 6 cents below the previous day’s low is higher than yesterday’sstop loss, raise the stop loss to this new price.
This is known as raising the
trailing stop, which further limits the downside risk.
•
When the stock gaps up or down 50 cents or more – wait 30 minutesfor a gap down or 5 minutes for a gap up – if 6 cents below the today’slow is higher than yesterday’s stop loss, raise the stop loss to this newprice.
6.7 What happens if the Trade is Not ExecutedLet’s say that you are receiving recommendations from MasterSwings or MrSwingLite and your trade is not executed on the day the order is placed. You can repeatthe process for up to 5 trading days.
•
If the stock gaps up or down, wait the appropriate amount of time (30minutes for a gap up and 5 minutes for a gap down) – determine the entryand exit prices based on the current day’s prices.
•
If the stock opens with 50 cents of yesterday’s close, the entry and exit pricesare based on the previous day’s prices.
The chart on the following page should make the trading rules clear.
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Long SwingNo
Stock Opens with a GapGapYes Down
• Okay to place orderwhen market opens• Buy stop 6 cents aboveyesterday's high• Sell stop at whicheveris higher – 4% belowentry price or 6 centsbelow yesterday’s low• Sell limit for half theshares at 7% abovethe purchase price
YesGapUpWait 30 Minutes
Wait 5 Minutes• Buy stop 6 centsabove today's price• Sell stop at whicheveris higher – 4% belowentry price or 6 centsbelow today’s low• Sell limit for half theshares at 7% abovethe purchase price
Stock is PurchasedNo – Repeat for up to 5 trading days
YesRepeat until theposition closes.Sell stop closesthe 2nd half ofthe position.
No
Next DayStock Opens with a Gap
• Sell limit for ½ theshares remains thesame• Sell stop – whicheveris higher –yesterday’s stop lossor 6 cents belowyesterday’s low
Yes
GapDown
• Wait 5 minutes• Sell limit for ½ theshares remains thesame• Sell stop – whicheveris higher –yesterday’s stop lossor 6 cents belowyesterday’s low
To d
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YesGapUp• Wait 30 minutes• Sell limit for ½ theshares remains thesame• Sell stop – whicheveris higher –yesterday’s stop lossor 6 cents belowyesterday’s low
6.8 Once half the shares close at a 7% profit, theother half remains open to “ride the wave”.When do we close the second half of the trade?A trailing stop is used to close the 2nd half of the trade. Remember that a trailingstop is used to raise the sell stop (stop loss) during the trade. The same rulesapply (see 6.6 above). The shares are sold when the price drops to 6 cents belowthe low of previous day (no gap on open) or the current day (gap on open).
6.9 The Short Swing – how we make money when wethink the price of the stock is going downA short swing is used to make money when a stock’s price is predicted to go down.We sell short the stock. For those unfamiliar with shorting stocks, we sell thestock without having previously owned it. Additional detail about shorting stocks canbe found the Appendix. For now, it is only necessary to know that our goal is to sellthe stock and buy it back at a lower price.While anyone can sell short, you must make sure that your brokerage account isapproved for trading on margin.
If you do not have a margin account, simply fill
out the necessary forms with your current brokerage firm or open an account withone of the firms recommended for swing trading.A short swing is a mirror image of a long swing. The price of a stock in adowntrend tends to have periodic, short-term rallies (pull-ups) as the price moveslower. The set up for a short swing is the brief rally (or pull-up). The decisionrules in the Master Plan help enter the trade when the stock is resuming it’sdownward path.A chart showing a downtrend that is conducive to short swing trading is shown onthe next page.
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Notice in the chart below that the downtrend is interrupted by short-term rallies(pull-ups). The trade is placed after a short-term rally (or pull-up), once the stockresumes its downtrend.The trade is entered on a day when the price falls below the low of the previous day.
The rules for entering and exiting a short swing are shown schematically on thenext page.While the rules might seem somewhat complicated, several brokerage firms makethe process quite easy. Interactive Brokers – described in the next section –allows you to enter the three components of the trade all at the same time. For ashort swing they are:
•
A sell stop to sell the stock when the price moves below the stop price
•
A buy stop to buy back the shares if the price moves up 4%
•
A buy limit to lock in profits (on ½ the shares) when the price drops 7%
The schematic diagram provides instructions for how to adjust these prices on thesecond day, third day, and so on, based on whether the stock has been sold shortor not. The schematic provides exit instructions as well.
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Short SwingNo
Stock Opens with a Gap
• Okay to place orderwhen market opens• Sell stop 6 cents belowyesterday's low• Buy stop at whichever islower – 4% above entryprice or 6 cents aboveyesterday’s high• Buy limit for ½ theshares at 7% below thepurchase price
GapYes Down
YesGapUpWait 5 Minutes
Wait 30 Minutes• Sell stop 6 centsbelow today's price• Buy stop at whicheveris lower – 4% aboveentry price or 6 centsabove today’s high• Buy limit for ½ theshares at 7% belowthe purchase price
Stock is Sold ShortNo – Repeat for up to 5 trading days
YesRepeat until theposition closes.Buy stop closesthe 2nd half ofthe position.
No
Next DayStock Opens with a Gap
• Buy limit for ½ theshares remains thesame• Buy stop – whicheveris lower –yesterday’s stop lossor 6 cents aboveyesterday’s high
Yes
GapDown
• Wait 30 minutes• Buy limit for ½ theshares remains thesame• Buy stop – whicheveris lower –yesterday’s stop lossor 6 cents aboveyesterday’s high
7 Preferred Brokers
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YesGapUp• Wait 5 minutes• Buy limit for ½ theshares remains thesame• Buy stop – whicheveris lower –yesterday’s stop lossor 6 cents aboveyesterday’s high
7.1 optionsXpressoptionsXpress is a discount broker that has many features to help the swingtrader. While the name suggests a specialist in options, you can trade stocks,bonds, and mutual funds as well. optionsXpress also has a unique autotradingservice called XecuteSM which we use for several of our services including QQQSwings, OEX Swings, DIA Swings and SMH Swings. In the near future you willalso be able to trade our OptionSwings service using XecuteSM. If you are asubscriber to one of our services, our trade recommendations go directly tooptionsXpress and they can automatically place the buy and sell orders in youraccount. This is particularly convenient for subscribers who are unable to watch themarket.For swing traders, optionsXpress has a feature called One Cancels Other(OCO). Once the trade is placed, both closing sell orders can be placedsimultaneously (the limit and the stop order) – when one is executed, the other iscancelled. By the time this book is published, optionsXpress will also have afeature that allows a buy and sell order to be placed simultaneously. They continuemaking improvements based on the needs of their customers.Autotrading means that optionsXpress can executes your QQQ Swing traderecommendations automatically based on your specifications in your brokerageaccount and sends QQQ Swings trade alerts.optionsXpress offers additional features that are valuable to all investors:
•
Streaming real-time quotes including after hours prices
•
High-speed execution
•
Low commissions (e.g., $19.95 for stocks, $14.95 for mutual funds and up to10 options contracts)
•
State-of-the-art charting, technical analysis and order entry
•
Up-to-the-minute commentary and market statistics
•
features specifically designed for options traders – the ability to place easilytrade calls, puts, spreads, straddles, strangles, butterfly’s etc.
•
tools specifically designed for options traders including Option Dragon (ascreening tool) and Option Pricer
•
Options can be traded in retirement accounts and custodial accounts
You can open an account at http://www.optionsxpress.com/
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8 The Essentials of Technical Analysis8.1 IntroWe humans have a very hard time making fast decisions with complicated info. Thatis why, as human traders, we try to simplify trading as much as possible, in order toscan fast & accurate trading opportunities in a few seconds. As Albert Einstein usedto say: keep things as simple as possible nut not any simpler!The following Technical Analysis (TA) tools are part of the daily charting arsenal:Candle stickVolumeEquivolumeMA (???)Force IndexDMIUp/Down/In/Out...
8.2 Why does Technical Analysis work?Simply because the large professional traders cannot help leaving behindconsiderable evidence regarding their opinion on the direction of the market: volumeprovides clues as to the intensity of a given price move...The key is psychology: you trade people, not stocks. People never change...mosttraders keep on making the same mistakes again and again...luckily for us. Read thisagain and think about it!
8.3 The BasicsA stock price is determined by an exchange between buyers and sellers. If therehappens to be more buyers than sellers then the market goes up. On the contrary, ifthere happens to be more sellers than buyers then the market goes down. Logical!
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The price at which a stock is offered affects the trader's decision. If a trader is longand the stock starts to decline, the trader could be forced to close his position. Ifshort, he might do likewise on a rising stock.
When a trader takes a long position, he becomes a potential seller, while shortpositions are held by potential buyers. As prices change due to buying and sellingpressure, information about the condition of the stock is revealed by the combinationof price and volume action.
8.4 Japanese Candle sticksIn the 1600s, the Japanese developed a method of technical analysis to analyze theprice of rice contracts. This technique is called candlestick charting. Steven Nison iscredited with popularizing candlestick charting and is now recognized as the leadingexpert on their interpretation.Candlestick charts display the open, high, low, and closing prices in a format similarto a modern-day bar-chart, but in a manner that extenuates the relationshipbetween the opening and closing prices. Candlestick charts are simply a new way oflooking at price; they don't involve any calculations.
Figure 3: An open candle stick chart
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Figure 4: a closed candle stick chart
8.5 VolumeVolume is simply the number of shares traded during a given timeframe (e.g., hour,day, week, month, etc.). The analysis of volume is a basic yet very importantcomponent of technical analysis. Volume provides clues as to the intensity of a givenprice move.High volume levels are characteristic of market tops when there is a strongconsensus that prices will move higher. High volume levels are also very common atthe beginning of new trends (i.e., when prices break out of a trading range). Also,just before market bottoms, volume will often increase due to panic-driven selling.Volume can help determine the strength of an existing trend. A strong up-trendshould have higher volume on the upward legs of the trend, and lower volume on thedownward (corrective) legs. Similarly, strong downtrends usually have higher volumeon the downward legs of the trend and lower volume on the upward (corrective)legs.
8.6 EquivolumeEquivolume displays prices in a manner that emphasizes the relationship betweenprice and volume. Equivolume was developed by Richard W. Arms, Jr., and isexplained in greater detail in his book “Volume Cycles in the Stock Market”Instead of displaying volume as an "afterthought" on the lower margin of a chart,Equivolume combines price and volume in a two-dimensional box. The top line of thebox is the high for the period and the bottom line is the low for the period. The widthof the box is the unique feature of Equivolume - it represents the volume for theperiod.
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Figure 5: EquivolumeThe shape of each Equivolume box provides a picture of the supply and demand forthe security during a specific trading period. Short and wide boxes (heavy volumeaccompanied with small changes in price) tend to occur at turning points, while talland narrow boxes (light volume accompanied with large changes in price) are morelikely to occur in established trends.Especially important are boxes that penetrate support or resistance levels, sincevolume confirms penetrationsA "power box" is one in which both height and width increase substantially. Powerboxes provide excellent confirmation of a breakout. A narrow box, due to lightvolume, casts doubt on the validity of a breakout in question.We always look at volume in relation with price movement:Trend ReversalAbove-Average Volume with LITTLE price movementAbove-Average Volume after a huge advance or declineTrend ContinuationVolume
Above-Average Volume with STRONG price movementAbove-Average Volume with breakoutBelow-Average Volume with NO price movement
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Figure 6: Volume
8.7 Moving AveragesA Moving Average (MA) is an indicator that shows the average value of a security'sprice over a period of time. When calculating a moving average, a mathematicalanalysis of the security's average value over a predetermined time period is made.As the security's price changes, its average price moves up or down.Simple MA = (P1 + P2 + ... + Pn) / nwhere P is the price being averaged and n is the number of days in the MA
There are five popular types of moving averages: simple (also referred to asarithmetic), exponential, triangular, variable, and weighted. Moving averages can becalculated on any data series including a security's open, high, low, close, volume, oranother indicator. I use only the 10-20 & 50 day simple MA on closing prices.TRENDS
UpTrend:
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Higher Highs & Higher LowsRising MA10 & MA20Higher volume on the upward legsclosing prices ABOVE the MA20 & MA50an Uptrend stock will find support at either the 20or 50 day MADownTrend:Lower Highs & Lower LowsFalling MA10 & MA20Higher volume on the downward legsclosing prices BELOW the MA20 & MA50a downtrend stock will find resistance at either the20 or 50 day MA
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SwingTracker©
8.8 Force IndexForce Index is an oscillator developed by Dr. Alexander Elder in his excellent book:“Trading for a Living”.Force Index combines the three most essential pieces of market information:the direction of price changeits extentits trading volume.It provides a new, practical way of using volume to make trading decisions.Force Index
Force Index = Volume(today) * (Close(today) - Close(yesterday))
Although Force Index can be used raw, I prefer to smooth them with movingaverage:Larry’s Index
FI-3days MA & FI-13days MA
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A 3-day MA of Force Index is a very sensitive indicator which shows the short-termbattle between the bulls and the bears. And the 13-day MA of Force Index identifiesthe longer-term battle between bulls and bears.BUY opportunity :FI-13MA => 0FI-3MA <= 0Force Index
UPTRENDSELL opportunity:FI-13MA =<0FI-3MA >= 0DOWNTREND
Figure 7: moving index
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8.9 Directional Moving IndexThe Directional Movement Index (DMI) is a trend-following indicator developed by J.Welles Wilder, Jr., designed to determine whether a security is in a trending or nontrending market. Since the market is in a strong trend only about 30% of the timeand in sideways about 70% of the time, this indicator is used to capture the periodwhen the market shows significant trending or directional behavior.The calculation of the DMI is fairly complex and consists of three lines:+DI: current positive directional index, the range of highs dividedby the price range over the last day and previous close, smoothedover a given number of periods.-DI: current negative directional index, the range of lows dividedby the price range over the last day and previous close, smoothedover a given number of periods.
DMI
ADX: modified moving average of the difference of +DI and -DIdivided by the sum of +DI and -DI, multiplied by 100.UpTrend:ADX > 30 the higher the better+DI > -DIDownTrend:ADX > 30 the higher the better-DI > +DI
8.10 Up/Down/In/OutUp/Down/In/Out is a chart overlay available on SwingTracker (software I recentlydeveloped) that color-codes individual bars or candlesticks based on pricemovement. It relates the current high and low price with the previous high and lowprice.Up (Green) indicates the current high is higher than the previous high and thecurrent low is higher than the previous low.
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Down (Red) indicates the current high is lower than the previous high and thecurrent low is lower than the previous low.In (Yellow) indicates the current high is lower than the previous high, and thecurrent low is higher than previous low.Out (Blue) indicates that the current high is higher than the previous high, and thecurrent low is lower than the previous low.
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9 SwingTrackerSwingTracker 4.0 is quote, scan and charts software designed specifically for SwingTraders. In addition to our acclaimed features like real-time intraday technicalcharts, sophisticated stock tool and dozens of technical indicators, we have thefollowing special features for swing traders:Equivolume and ForceIndex indicators as described in my education sectionBuild your own stock scans, or use the ones I describe in "SwingLab" to findyour ownReal-Time Swing Alerts
9.1.1
Features
Real-Time Quotes and Charts
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SwingTrackerallows you to watch the market unfold in real time with customized Real-TimeQuotes and Charts updated by the minute.Real-Time Watchlist
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Track dozens of stocks and indices simultaneously with a dynamic SwingTrackerReal-Time Watch List. This set of personalized "favorites" is easy to organize. Simplychoose a symbol and you'll receive up-to-the-minute information on that stock as ithappens. Choose from more than 50 lists, including Most Actives, TopGainers/Losers, Indices, and Industry Groupings.Stock Scan
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Find new investing opportunities with SwingTracker's sophisticated Stock Scan. Thispowerful and easy-to-use software allows you to search using more than 100criteria, including price, volume, and fundamental information. Stock Scan alsoutilizes our proprietary candlestick recognition engine to determine specific patterns.And every search can be saved or modified with just one click.Can you make money swing trading?YES, we enjoy a high percentage of winning trades because
P
the charts pattern used have been back-tested. The risk
o
parameters are highly defined; The swing trader is a
r
disciplined user of trading STOPS. This is only TRUE when
t
you apply a solid trading plan, like our MASTER PLAN.
fo
lio Tracker
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Manage and protect your existing profits with SwingTracker's Portfolio Tracker. Thetool allows you to monitor up to six different portfolios in real time. You can also sethigh and low alerts, purchase price, and the amount of your holdings to continuallymonitor your bottom line.Technical Indicators
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Accurate technical analysis is essential to today's trading. SwingTracker TechnicalIndicators allow you to view up to four indicators simultaneously, including ourproprietary indicator, IQC Zone, Relative Strength Ranking, and Money Flow.
Do you monitor all list stocks every day? How do you pick one to play?NO ! I execute our swings scans every single day and select approx. 25 stocks i like!!THEN? I divide my portfolio into 15 equal pieces & the first 15 (of the 25 stop orders)that pass the swing test are traded, i.e. I only risk 6.66% on each trade.
Technical analysis is widely considered essential in limiting risk and maximizing profitas part of any trading and investment strategy. SwingTracker has dozens of technicalindicators available for real-time and long-term analysis.Available Technical IndicatorsWith price volatility at an all-time high, it is becoming increasingly important for theinvestor to recognize patterns in the movements of the stocks they own or areinterested in purchasing. The interpretation of market activity using technicalanalysis provides clues to the investor as to the future behavior of the price.Page 51
Generally speaking, the technical investor will use a combination of price, volumeand time-sensitive technical indicators to maximize their profits. Here is a completelist of technical indicators utilized by SwingTracker, IQC Corporation's award-winningtechnical analysis charting software.OverlaysBollinger BandsLinear RegressionMoving AverageOn Balance Volume (OBV)Parabolic SARIQC ZoneUp/Down/In/OutIndicatorsAverage True RangeBreadth Advance/DeclineCommodity Channel Index (CCI)Directional Moving Index (DMI)EquivolumeForce IndexMoving Average Convergence/Divergence (MACD)McClellan OscillatorMomentumMoney FlowRelative Strength Ranking (RSR)Relative Strength Index (RSI)Relative Strength Index Classic (RSI Classic)Stochastics
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Ultimate OscillatorVolatilityVolume and Volume AverageWilliam %ROther Interesting FeaturesProvides real-time access to financial information anywhere in the world.Works side-by-side with your Internet browser.Offers a variety of tools that give you the ability to draw trend lines,retracements, and much more.Displays information on related stocks quickly and easily.Takes advantage of offline capabilities for daily, weekly, and monthly charts.Saves time, money, and space with server-maintained databases.
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10 FREE SwingLabSwingLab works alongside with SwingTracker, my real-time charting software. Oneof the best features of SwingTracker is the "Scan" feature, which lets you build yourown stock screens to find the specific stocks you'd like to swing trade.Why does swing trading work?Because you are trading in the direction of the trend. You
I will
wait for a pullback before entering the trade, and you enter
show
only if the stock shows a sign that it’s price will continue in
you
the direction of the trend.
some ofthe
formulas I use, and how I use them. There is also a step-by-step description of howto set the screens up.On www.mrswing.com, you will find regular update in the SwingLab section of thesite. Let's get started.
10.1 Starting with SwingLabSwing traders seek pivot points in stocks - gaps, breakouts and reversals - with a 1to 5-day time horizon. Here are some of the scans that I use... if you find one thatyou like, send it to swinglab@mrswing.com with your name, and we may add it toour growing library on our website.
10.1.1 Starting to swing...