out in April's dp, because theypercentage chart setups Gid not use Stops.© Ahigh-percentage swing trade is generally either © The chart pattems below may well cell off andbuying a breakout above @ 2-3 day consolidation not be ow. All|of @ reversal aiter a sustained dactine (aq it finally know is how I'l n based onlooks cheap to more buyers than sellers what the buyers and sellers are doing, I've got© In swing trading, this means we rely heavily on trade entry and exit pomts, along with stops
       
chart patterns, earnings calendars, and identified for eachmare index charts, stong with Remember weand SDMA, lines tradingtrade support and rn 3refer to a 1-year and @ Smonth andvor 6-month chart
 
 MORE BOTTOM FISHING (BOUNCE)SWING TRADING CHART PATTERNS
KLIC Swing Trade
Remember, when buying whatyou think is the bottam, makesure you see an uptrend and/orvolume reversal before buying, as LIC =] [interval chee =] PI[W &/Slzal | Safir GRthe first bottom is often just the
first of two. Let's jook at KLIChere:
if you had bought the first battornat 25, you'd be wrong... instead,you should pay attention to 2things before buying any bottomfor a swing trade
1) Heavy volume
2) An uptrend, indicatingbuyers are stronger thansellers,
You did Not see either of theseon the first drop on 8/1, so youwouldn't buy. You'd buy on eitherof them, eg on 8/3/00
‘Where do we see this? On8/S/00....is the trade good formore? Maybe, but Id put my firstexit target right under theconsolidation et 29... since | sitout decade resistance | mightbuy at 16 1/4 and sell at 19 1/2or so. A stop loss would be at15, of course
CRDS Swing Trade
 
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Again, buying the first battorn at9 on 7/27 would've beenwrong...alse | never buy 9'sanyways (919,29 39 49) sincethere'll be resistance at thedecade number above it. We saa heavy volume reversal al 11arnon 7/28, a swing trade could'vebeen entered there with 2 stop atthe bottarn at 4
I'd wait though .a good next entrywould be over 10, or, ifthe stockdrops to § ar sa and starts tabounce.think is the bottom.Remember to be skeptical andwait far strong buying strength toenter the position...dont chase,but make it go through a previousresistance level or new high ofday (hod) to enter.
 MFC] ¥]finewachat Pl PIV @(Sles|A| efi (GR
MRVC Swing Trade
(fist heard about MRVC fromTony Oz's new book, it's gotgreat volatility for trading)
What's the 2 key pattems yousee here?
a) Volume uptrend off 10:30bottom on 7/26.
b) A double bottom at 50support on 8/2 and 8/3, followedby buying on B/4
What's the olay? Well, | boughtat 50 on 8/2 for a good trade...ittan 5 points in 1/2 hour, easy toplay. Buying seems to havestalled at 60 on 6/4... If it gaps to62 or so on the next trading dayAnd Still Has buyers at 10am inan uptrend then | might buy, oroff a pullback to 55 or so at10:30,
 
KANA Swing Trade KANA | [intevalChat iy P| [¥ @|Slela Safir ky
What's the story on KANA here?Well, a bunch of people sold itdown to 40 on 7/27... but wedidnt buy because ... ?
No uptrend. .no buyers meansI'm not going to buy either. Sureenough, it fell another 25% downto 30 on 83.
When do you buy next, you ask?Well, I'd wait til it's over 40 1/2resistance in an uptrend onbetter than average volume, orbuy in the low 30's GO to 31 1/2)on a reversal at 10:30.
Buying on the close on 8/4 at 36probably would be ok too for apossible open gap to 36 1/2- 37,but | wouldnt buy on a Friday fora weekend hold, rather I'll play onMonday 8/7 instead.
 WSTL Swing Trade
Do we have a bottorn bouncehere? Well we do see both wet] [irenaichan =] PIV @/S/ea| 4| 5ST | GRvolume and an uptrend, so the
answer is Yes, a buy on 9/3would be ok.
Next entry would be at 18 1/4 ona moming uptrend, with a firstexit target right under 20. Swingtrade exit is at previous low inthe downtrend, eg I'd be out atunder 24 (buy 20 1/4 sell 23 1/3or so)
Stop losses: Well you alwaysplace it at a previous low, so theabsolute stop loss would be at15 or so, I'd keep it a bit tighter,on cheap stocks like this every1/2 point counts in a swing trade
Bounce pattem. This is typical,look closely at 8/3: you see amorning selloff, a quick bounce,then it sells a bit andconsolidates. The next tradeentry would be right Above thehigh of the bounce point on 8/3,about 16 or so... This occurred atthe end of the day, so I'd eitherbuy for the next day's gap up(risky), or, more likely, buy onthe next day as long as it staysabove 16.
ri v] [irtevalchar =] (PIV @{@les| A) aftr SGT
T Swing Trade
Whatever happened to poor T? |guess all those bargain langdistance plans ate their lunchHah it's about time.
Anyways, what's the play?Actually, based on this chartpattern it’s still a short.
However, we're getting close to30 in a sustained downtrend. |would expect a lot of stops to gettaken out at 30, and there shouldbe a some volatility to take T upa fair arnount from its currentlevels. That is, 'd expect to see33 before I'd expect to see 27
‘30 probably “looks cheep" toinsitutions, it looks cheap to me,I'd be @ buyer, with a stop at rightunder 30, say at 29 3/4. Exittarget at half the 10-day chartrange (a fibo number), say at 32142 oF 33.
 
USING 1-YEAR CHARTS TO HELP IDENTIFYHIGH-PERCENTAGE SWING TRADES| also frequently (eg daily,before entering any swingtrade) refer to 1-year and 3-month or 6-month charts toidentify 50MA 200MA and majorsupportresistance levels.
RNWK Swing Trade- 1-year chart pattern
What do we see here? RNVVK is inan uptrend here and now is a goodtirne to buy the pullback to 40ish.
If you draw a trendline you seesupport at roughly 35, and topsright under the 200MA at 60.
Aston loss would be at no morethan 5-8% of the share price, eg 2points or so, with an exit target ofright under 50 the first time, then are-entry at 51 or so and exit targetat right under 60.
Note: the bottom three 1-year charts are sorted in descending order of “strength”, egRNWK has the strongest chart, followed by DCLK followed by ATHM.
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 DCLK Swing Trade- 1-yearchart pattern
DCLK has got to be the very bestbuy out there tight now, in my
opinion If| had 100K for a singleposition trade |'d buy DCLK at 35.
The one-year chart shows we'retesting the 52-week low, and thefinancials on DCLK are the best ofthe internet stocks, period
Privacy overhang issues have beenresolved, and | am posite DCLK,once over 40, wil] "never lookback". Keep this one on yourwatchlist.
| could be very wrong, maybeDCLK will go to 15 in the next fewmonths. That's what stops are far.
OCLK is currently my favoritetrading stock for both swing andday trades, along with EXDSRNWK MRVC
ATHM Swing Trade- 1-yearchart pattern
ATHMM looks like it's taken abeating and the sellers have clearlywon for calendar 2000. Waiting fora bottom? | thought 20 would be agood bottom, but buyers neverreally came back into the stock.
Here we see it's dropped all theway to 13 1/2...this is probably the‘real bottorn, but I'd wait til it's over16 1/4 to buy back in.
Note that analysts ratings are oftenworthless (the first 4 letters kind ofsay it all lol), this stock is highly-rated, as both RNWK as DCLKare, but has been selling all yearlong.
A somewhat riskier ATHM entry isto buy now and put a stop in at 131/2 (which | did last week).
 
 
 
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 Heguls Swing Trading Strategies CREE WedBack to«+ Knowing When to Tum a Day Trade into a Swing: Overnight MODULE 4
 
Gaps and Chart Patterns
eintss
Scmetimes you may enter a trade and thenwender when ta take profits/losses. egshould | turn it into a swing trade?
The answer depends on the pricemomentum of the stock and your entry
point
Never take home a losing position saying“oh well it's down forthe cay so Ill make itinto a swing trade”. That's how traders gobroke.
if, however, you are buying an end-of-dayselleff bottom in articipation of an upsidegap the next day, that's another story. Somestocks that sell off more than 6% or so onno news may well rebound a couple of %age
© The other time would be when the stock closes outstrong, at the high of the day, and you expect anupside gap on the next day. Again, it's a matter ofextremes, ifthe stock has skyrocketed you shouldsell half your position to book the profit, holding thebalance in case there's an upside gap. If it gapsdown, wait, and if it keeps selling, stop out with apartial profit still in hand.
‘When to tum whal was a day trade into a swingtrade? When ycu think the buying momentum willcontinue, of course. It's a matter of degree, and thetrade sizes you are playing, I'm a big fan of varyingyour share position size, eg start with 300 sheres,add 100 if it cortinues, sell out 200 at what youthink is a top, hold the balance etc.
© Let's look at chart pattern examples below.
points the next day, good for an openbounce scalp,
Remember to Swing Trade with lO-day and Intraday Charts
1-Day COVD Chart:
10-Day COVD Chart:
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Swing Trading StrongBounces: COVD Example
 
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Here's COVD, a stock thalrecently sold off down to 16 1/2.It has broken through:resistance at 18, and is tradingover 19 at the close of the day.
A cay trade entered during anyof the previous 5 days on a‘dead cat bounce’ buy shouldbe sold 1/2 here at the end ofthe day to lock in profit, withthe other 1/2 held for a sell rightunder 20.
 
Even ifthe stock had been erfered as a dzy trade early in the day, you would still hold 1/2 the position into the close fora swing trade, with a trailing stop at 18 1/2. If the stock gaps over 20 the next day, you would add te the position. Ifitgaps down a bit, use a trailing stop Icss at no lower than 16.
10-Day RHAT Chart:
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4-Day RHAT Chart:
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Buying Pullbacks in Uptrends:RHAT Example
You can see that RHAT hasbeen climbing for days inarow. Do you sell or buy? I wouldbuy ifthe stock climbed over 364#4 on volume; if | was already inI would have sold the 10:00amtop this am at 35 3/4 and waitedfor a lower point to re-enter.
Ifyou are entering a newposition, you would place a stop 3 3 Gat 33 here. 3 1/2 if you wisk). tet
 
‘What does the volume tell you?Buyers in the am, low volume therest of the day.
1-Day RNWK Chart: 10-Day RNWK Chart:Risky Bottomfishing #4: RNWKExample
it's important to know the tradingrange and trend for your swingtrades. Here is RNVWK, it broke over44 resistance a few days ago andhas dropped to near that leveltoday.
| entered a small-share longposition on the close at 46 1/16th inRNWK, with a wide stop at 44 1/2
Why? The stock had plenty ofouyers for at least 1/2 of theprevious 10 days (closed higher), noadverse news has come out, andthe stock lost 12% for no ‘goodreason’.
Risky Bottomfishing #2: DCLKExample
| bought DCLK on the close at 407/8. hmmem...why did i do that?
No buyers anywhere in sight forDCLK, is this a bad entry?Maybe, except | know thal DCLKtends to gap up on the open aftera selling day. Previous support isat 38, which is where my stop isat. Let's say it gaps open to 411/2, and starts to clirnb the nextday Where da | sell? Right underthe previous days" major trendline,at 43. So, I'd sell at 42 7/3,
 
 
Why is this a nsky play? 10-day support is at 40, and it's at 30 for a month-long timeframe. | am risking an open gap tothe downside, as low es 40, but more likely in the 42-44 range. | believe that it will retest 50 within a week, however, so |am walling to chance it | still have a firm stop al 44 1/2, (fit gaps lower than 45 on the open and continues to sell IMl exitthe pasition, and not re-enter til t has climbed over 47 again. If had been playing it earlier in the day, 50 was the supportlevel and | would have exited once it lost 50, or entered a shart position.
1-Day DCLK Chart: 10-Day DCLK Chart:
 
 
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These are a nsky type of swing trading, buying a down close at the end ofthe day. Some guidelines:
If buying at the end of dey low for a swing trade, make sure the stock has sold off significantly, eg over 3%. |like ta buy especially if t's éropped aver 15% for no ‘good reason’ the price tends to correct hack up within 1-2days for at least a few percentage paints,
Stops are still important. Do not ganic out, however, ifthe stock gaps down premarkel. Remember buyerstend to be attracted by large gaps down. Only sell out if the stock heads lower 10-18 minutes after the openafter the open gap down
Take an open profit f the stock gaps up on the open a decent amount, eg 4-5% above what it closed at. |tend to do well on overnight holds that gap up.
Remember that gaps on the open of over £% on volume above 20K attract traders ..both on the upside anddownside Be prepared to trade gaps, they are among the most profitable of trading opportunities Remembernot to trade the first 10-15 minutes of the open, except to close out open gaps up
Watch time and sales..,| remember seeing a lat of traders getting bumed on shorting ISLO after a gap up, onlyto see it continue higher Remember, open gaps up dont always sell aff, and apen gaps dawn do not always getbuyers... watch time and sales the first 18-20 minutes to get a clear picture of the market's direction. Cup andhandle patterns are important to look for using your 3-minute bar or candlestick charts during the first 20minutes of the market openModule Swing Trading Strategies ies wee
FourBack to© How to Clear Your Profits in Swing Trading: Taking Money off the MODULE 4Table at the best time
@ Main Points:
© As in any type of trade, when you sell is much Since you are risking more, in terms of 2 bigger
more important than when you buy. Let's look stop, in your swing trades, you must develop theat how to know when “enough is enough" and patience to let the trade work in your favor, andyou can exit your position with a solid profit not sell to soon at the first sign of green
The challenge Is to let your profit run, but not © Map out your trade ahead of time and write downto wait so long that other sellers core in and where your stop loss is and where you will look tothe price drops to below where you would want take profit atto exit. © Ifthe stock youve been holding for several days
* Nobody can pick tops and bottoms exactly, has a teific breekout day and runs, go ahead andthe key is to manage your trades, stops, and take the profit dont give up a nice profit becauseexits carefully. youte only a day or two in a trade that you had
expected to need to hold on to for longer. Teke
In swing trading, | tend to look at ChartPattems/TA, Percentages, and Exit Targets. the money.Let's look at some specific strategies below
Always Sell Right Under "Decade Resistance" and Buy Back if It Breaks Through
Always Sell Right Under "Decade Resistance" and Buy Back If It Breaks Through
 
Thisis an excellent quideline to fANWK Pi[V @/Sea|4| ofr (GRfollow for helping you exit yourtrades with the maximum profitpossible. The only time you don'tsell as it approaches wholedecades is if it's running upthrough the pnce point on goodvolume.
 
 
 
Always always sell your stock asit approaches a “cecade"number, such as 10 20 20 40 5060. You can always buy it back4/4 point above the decadenumber if it keeps going up, butyou should Always take yourprofits right under the decadenumber.
Example: ‘You bought RNWK at42 for a swing trade on 4/24/00.
You set your stop at the support > 5level of 39 3/4 (right under a TrsevelChat aN SE
whole number).
 
 
 
 
“Your profit target is high 40s.You get ready to sell at 47. Thestock gets buyers, You fire off asell order at 49 5f&, booking 9SE points profit in 1-2 days
Mhi iny
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Look at RIMM - same story, it 1approached but could not get
buyers to bid over 50 for it. It fellback into a trading range here.The next ime to buy would be offa dip to 26-38 or above abreakthrough at 44.
 
Take Profits if the Daily Percentage Is Over 15% in Your FavorKeep a portfolio tracker where you can see it at alltimes. (eg esignal or quotetracker.com etc).
The more a stock goes up, especially above 15% on theday, the more likely you are to get sellers in this region.OF course, you should use trailing stops, don't exit theposition prematurely... However J find that I'm antsy tofut the sell button if the stock is up over 15-18% on theday, that's a bit extended to the upside.
Talways keep a portfolio list sorted by Percentage, withthe greenfup stocks atthe top ofthe lst, Im looking atthe deep reds (eg over 8% in the red) for posablebounces if the reason they sold wasn't earings or othermajor “real reason for selling A selloff above 6-8% inan otherwise lau market on no news is always a goodcandidate to look for bounces
In this example, we called VISK as a sell fom a previoushold since it's up 18.6% on the day.
 
Look at the Big Picture: 6-month, lO-day, Intraday Charts
fo — =] SENSE] P/V Ql] | 8s) SaNaRI
  
As we mentioned in Module 1,you should use a "zoom"approach to TA for your stocks,eg start by looking at the 6-monthor yearly chart far major trend,support and resistance
Inthis VISX example, you can seewe had a nice long consolidationperiod fromm 14-19, with a recentbreakout. Resistance is at 19-20.
What's the 6-rmonth chart also tellyou? Look at the MA lines, we'refinally above the 20MA, whichisbullish here, and we have a green"yolume spike", so we are goingup on decent volume. That's 4good sign
sk El inewaicrot =] P| [¥/ Sea] 4) Ss) ir | GRNeod, take a look at the 10-daychart. What's it telling you? No.sellers anywhere
The stock has been in a steadyuptrend for the last 2 weeks, andfinally on Friday we had a volume:breakout above 20, a very bullishsign.
\We exit the position right at 193/4, however, and Sit Out the tugof war between buyers and sellersas it tries to take out theresistance at 20. Thats a low-percentage battle to be involvedin, So you want to take your profitout beforehand If it breaksthrough the decade resistancelevel and conscolidates aboye it,then we can buy back in
 In our 2-minute intraday candlechart with MACD and stochastics,we see that the stock trended upnicely all day long. The stackconsolidated right at 20, which weexpected over a week ago.
So, we exit righ under 20 to takea healthy profit and wait foranother profitable tradingOpportunity in this stock
The fact that the stochastics are ina wiggling downwards trend isbearish, plus the MACD looks tobe weakening, so It's a tripleconfirmation of a time to exit thetrade.
USe all 3 of these rules profitably
inthe market and you'll be ahead
of the "herd" of paperfnew traders‘out there.
 
 
P/[V Qlcles|a! 9/77 snore
Knowing when to take your profits is always a struggle - I've often left large amounts of money on thetable as | sell with a nice profit, only to see the stock move much higher. | aways say "Dohl" like HomerSimpson when that happens
But, for every time I leave money on the table | sell at the top 2-3 times as often. So, | learn that nobodycan picktops and bottoms, you just need to have a solid, disciplined riskimoney management strategyin place.
Your losses must be small, your wins must be moderate and consistent Don't ry for "home run" swingtrades of mary points, if you're up with decent profit, then sell and rotate your capital into the next,higher-potential trade that presents itself.
Module: Swing Trading Strategies CBAs eadBack to* Making the transition from swing trading into day trading, and MODULE 4vice-versaeo Me sz
 
e Decide whether your trade is a day or swingtrade Before you get into it. You are natallowed te rationalize and let a losingdaytrade become a “swing trade" and hope itgoes up again someday.
© You may at some point in your trading life
want to spend more time with one type of
trading than another, or, de both types oftrading.
recommend that you use 4 low-cost online
broker (like datek.com or
Interactivebrokers.com etc) for swing trades
and a DAT (direct-access trading) broker for
daytrading. Have Two Separate Accounts,one for your daytrading, the other for yourswing trades. That's what | do (cyber fordaytrading, datek for swing trades)
Going from Day Trading to Swingtrading:
© If you are unsuccessful In your current trading efforts,remember to 1) trade the market the way it's trading,eg don go long in dewntrends, ar expect big runs inchoppy trading times like summer 2) be flexible and trya different trading style, using papertrading and/or small100-share trades to test out your approach.
Be patient with yourself, making the transition from onetrading style to enother is time-consuming and takeshard work, patience, consistency and discipline onyour part.
People who have been unsuccessful at day trading canbe highly successful swing traders, and vice versa... itdepends on your personal trading style,equipment/tools, and other factors That's why it'simportant to experiment with different trading stylesuntil you find one that works for you - that's why I'mIncluding this lesson, to help you with some ideas fortrying out a different style.In changing (or adding) swing trading to yourarsenal of trading styles, you take on addedrisk and potential added reward as well.
Your timing does not have to be as precise, as you areshooting to enter towards the lower end of a trading range (or
# breakout above resistance), and sell at the hich end of a
trading range
Your slops should be wider, and the size of
your trades should be smaller (ag 100-300
shares).
Trading Signals to Watch:
MA crossovers, 2g 20MA,Eq/100/200 MAs
Here are some ot the things to do keep in mind te help you
adopt swing trading as a personal trading st¥le:
Equipment Needed:
* Asingle PC monitor,slow 56K modem and
Trade Sizes/Picks:
+ Recommend that you trade a“hasket" of 3 ta stacks
Personality:
© Abh, this is fun Theswing traders’
online brokerage accountis fine for swing tradesYou do not need toinvest in the commissionload of a daytradingbroker and data feed ifyou're solely swingtrading
10- and 30-day trading rangesupport and resistance levelsand trendlines
eamings release datesnews-related gaps, eitherdirection (up/down) on theopen
buying/sellng pressure in theentire sector the stockbelongs to over a 10- dayperiod, eg §GIN chart forintemets, $SOX for semi'sete.
Seasonal fluctuations, egretailers, anergy strong in thefallwinter season etc.Candlestick reversals (1-daycharts)
a]
Swingtraders think
personality needs to bea bit more relaxes thanthe daytraders, eg youcant panic if the stockloses 1/2 pointConservative,deliberate, patient,analytical personalitytypes do well withswing trading. Thosewho are impatient willstop out of their swingtrades prematurely. ittakes patience to “let
simultaneously with smallshares, eg 100 - 200 sharetrades for your swing tradesRemember that bad news cancut a stock in half, sa you wantto minimize your risk exposurefor the multiple overnight holdsyoulll be trading.
Picks can be “dead catbounces", eg buying ICGX DCLKor others that have sold off andconsolidated for awhile at a keysupport level, or breakouts, Goodcompanies whe have hadoverreactions to news and whose the winners run" andprice has attracted buyers would not take profits toobe good trades to enter (eg open. early.
gaps down, just like daytrades,
but with a longer halding time
honzon)
Ok, I'min now, I'll let the trade work itself out this week - let me study the chart pattern and see where
it goes. This is an occasional tracing style, may look at realtime quotes on occasion during the
trading day
Going from Swingtrading to Day Trading:
If you are like me and are impatient, waiting a fewdays or a week for a trade to pay off can seemlike an eternity, and you'd rather play the merketlike a video game, taking fast profits based onacomplex set of indicators that you depend on tohelp you navigate your trades.
Trading Signals to Watch: Equipment Needed:
Daytrading requires iron discipline and a moresophisticated set of trading tools and knowledgethan swingtrading does. . Making the transitioninvolves gradually increasing your trade size tawhere you can trade blocks of 500-1000 shares inshort timeframes, almost exlusively under 20.minut2 round trip trades. It's like racing on a track,you need to know what you're doing
Trade Sizes/ Picks: Personality:Gap fills on the open,eg bounces off af majorgaps down or short
Minurnum of two monitors isRequired net optional fordaytrading.
* You can still makehandsome profits with 100-share trades on stacks w/3-5
intraday point trading rangesfeg PHCM MRVC DCLKISLO), but in general we wantto trade 300 to 1000 sharelots, Add to andbuild/subtract from yourposition, scale in and out tormanage risk dynamically.‘We are always monitoringthe realtime financialnewwires for breaking storieswe Can profit from. Ve alsomonitor the realtime days’gainers/losers to play off theretracements
We play picks that aremaking new highs or lows,we play the extremes,
We keep extremely tightstops and use L2ime &sales resistance and supportto enter & exit positionsPrecision micro-trading forfast money