SWING TRADING STRATEGY
Use the BSE 500 to time your trades to the market with Williams %R. Only establish new positions when one of the following conditions occurs.
Short Positions: The 10 SMA is below the 30 EMA and Williams %R is overbought - SHORT
Hourly Chart: Look at the hourly chart on the BSE 500 for bullish or bearish patterns.
Supplemental: Look at the VIX to identify extreme market readings.
Note: Only use this market timing method to establish new positions – not to exit positions. Trail your stops on individual stocks to exit positions.
Selecting Individual Stocks
This is for long positions only.
Trend: The trend is up with the 10 SMA above the 30 EMA. The stock is in between the 10 SMA and 30 EMA (Traders Action Zone). This stock is in a stage 2 uptrend.
Pullback: The stock has at least 3 consecutive down days with lower highs.
Candlestick Pattern: The stock has a bullish candlestick pattern for today (hammer, engulfing, piercing), and/ or traded over the high of the previous day.
Hourly Chart: The hourly chart matches your expectations on the daily chart.
Earnings: The stock is not coming out with an earnings release within the next couple of days.
Support Level: This stock is trading at a support level.
This is for managing your money and your trades.
Money Management: Do not risk more than 2% of your money on any one trade. Use this number to determine how many shares you should buy.
Trade Management: For swing trades, trail your stops under the current days low or the previous days low – whichever is lower. If the stock is at the beginning of a trend, consider selling only ½ of your position when stopped out. Trail your stops on the remaining shares under swing point lows until stopped out.
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Tuesday, 29 May 2012 16:08
Swing Trading Strategy
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