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Sri Lanka Equity Forum » Stock Market Charts & Graphs » Swing Trading - New era of the CSE

Swing Trading - New era of the CSE

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1 Swing Trading - New era of the CSE on Sun Jun 19, 2011 6:41 pm

Prince

avatar
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Swing Trading

The Swing Trading Strategy, is a short term investing strategy in the stock market, that involves a two-to-five-day market cycle, and identifies high and low points in short-term cycles.
The stock trader can then move in and out of stock positions methodically.
While the big institutional investors such as mutual funds have an advantage over the individual retail investor and stock trader - more money, better research, broad diversification, the Swing Trader has flexibility and mobility as an advantage.
They can make decisions quickly, pay attention to the subtle, short-term price movements that characterize market cycles and focus on a few key stocks.
Short-term price movements can be defined in terms of three emotions:
• Fear
• Greed
• Uncertainty

This is where the Swing Stock Trading strategy has it's main advantage. Rather than making decisions based upon emotion, this technique is based upon logic and technical analysis.
A Swing stock trader can make profits in both short and long time frames, but only if they can see past the emotional and psychological reactions that govern the thinking of the crowd mentality.
Swing stock traders observe how emotions affect price, and act when those emotions exaggerate a trend to present a profit opportunity.
A "swing" is a change in direction. So a stock that has been trending upward will swing to the downward and visa versa.

Swing stock traders use the timing of short-term stock trading patterns to take advantage of the swing tendencies of stock prices.
These tendencies are to trade in brief waves in which stock prices rise and fall. After specific patterns and signals occur, a reversal often takes place and this is where swing trading becomes a powerful timing strategy.
For example, after a stock's price has risen in a specific trading pattern, based upon certain technical analysis and using specific technical indicators and pre-determined support and resistance levels, the swing trader recognizes a sell signal and exits the trade.
And visa-versa for when a stock price falls.


Because swing stock trading involves timing a trade in anticipation that prices are going to go the opposite way, this style of trading is a short-term style of contrarian investing.
Most people buy when they should sell and visa versa.
The ideal swing trading stock pick, is one with the company having strong fundamentals, but with short-term volatility. This means that the trading range (the price between typical high and low prices) is broader than the average stocks.
So Swing stock traders need well managed stock market companies whose stocks are somewhat volatile. In other words, the ideal stock would be one with strong long-term fundamentals and very short-term technical signals.


Swing Trade Strategy

A simple stock market Swing Stock Trading system, is illustrated above, selling short on a down-trend.
Lets go through it in detail:

1. Confirm the strength of the trend.
2. Look for a price pullback c/w at least 3 consecutive up days with higher highs. Volume should be lower on the pullbacks.
3. The 5 Day RSI Indicator should be above 50. When the RSI forms a top and begins to turn down, you should look for a share price retracement to bounce off the 20 day simple moving average (SMA).
4. Look for key Candlestick reversal patterns at the top of the pullback such as the Harami, Engulfing pattern, Dark Cloud Cover or the Evening Star Doji.
6. Insure your position sizing and money management rules are in place.
7. Make the stock trade!

This is just one of many Swing Stock Trading System techniques.

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2 Re: Swing Trading - New era of the CSE on Sun Jun 19, 2011 7:29 pm

chamarahs


Manager - Equity Analytics
Manager - Equity Analytics
Smile

3 Re: Swing Trading - New era of the CSE on Sun Jun 19, 2011 7:41 pm

smallville

avatar
Associate Director - Equity Analytics
Associate Director - Equity Analytics
In a downword pattern still you can look for a swing point low (low, lower low, higher low) for a small reversal on a short term trade.
Just like in the chart where a bit of down to the place it marked second sell point from top (March 22-23)..
Look at the first big red candle - low, second low candle - lower low, third white candle - higher low.
This is where you can enter for a small profit when the trend is down

But for you to have a profit you cant wait till the pattern formation.. This is where u take a RISK and enter the second day where it hit the lowest. (This is to max the profits and benefit from volatility but jumping in at this point is a big RISK..)
Also u should sell it on the first sign of price trend changes without being greedy.. Wink
If u become greedy u end up with big losses than a normal trade.. Keep in mind..

4 Re: Swing Trading - New era of the CSE on Sun Jun 19, 2011 7:46 pm

tubal


Vice President - Equity Analytics
Vice President - Equity Analytics
The ability to sell short is essential for swing trading. Unfortunately in SL you can't do that. But still it's possible after a great deal of practice to make money with swing trades. But expect to lose money (lots of it) initially.

5 Re: Swing Trading - New era of the CSE on Mon Jun 20, 2011 6:29 pm

mono

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
this is generally what i do. But be careful you can get bad burns.

6 Re: Swing Trading - New era of the CSE on Mon Jun 20, 2011 7:43 pm

gann

avatar
Senior Manager - Equity Analytics
Senior Manager - Equity Analytics
Your successful daytrade can be converted to a swing trade. Thats what I do with proper money management.

7 Re: Swing Trading - New era of the CSE on Wed Dec 28, 2011 5:18 pm

Kumar

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Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
Well for this particular time this post will help a lot.
Thanks a lot mate.

8 Re: Swing Trading - New era of the CSE on Wed Dec 28, 2011 6:57 pm

bakapandithaya

avatar
Vice President - Equity Analytics
Vice President - Equity Analytics
Good point price, thnkx

9 Re: Swing Trading - New era of the CSE on Fri Jan 20, 2012 8:13 am

Light of Hope


Vice President - Equity Analytics
Vice President - Equity Analytics
thanks, good for these days

10 Re: Swing Trading - New era of the CSE on Fri Jan 20, 2012 9:16 pm

Roboticfx

avatar
Senior Vice President - Equity Analytics
Senior Vice President - Equity Analytics
I also follow this method usually. But there are two sides like hell and the heaven. I think slow shares are more effective in swing trading.

Message for new investors!

If you don't know about this much and if you heard this for the first time, it is better to keep away from this because it's too risky and a very small mistake can be a reason for a big loss at once. If you are interesting on this subject please learn and practice the basic things first and then come to these kinds of complex things. If you have the ability and the knowledge to do a successful day trading, you can try this little by little like climbing a mountain. If you start this at the peak, you may fall down. So, be careful!

11 Re: Swing Trading - New era of the CSE on Sun Mar 04, 2012 2:35 pm

Redbulls

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Director - Equity Analytics
Director - Equity Analytics
Thanks for sharing a good one.

12 Re: Swing Trading - New era of the CSE on Sun Mar 04, 2012 2:49 pm

market bull

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Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Prince thank you for sharing...

13 Re: Swing Trading - New era of the CSE on Fri Aug 03, 2018 11:03 am

yogi11137


Stock Analytic
Stock Analytic
How to Swing Trade?

14 Swing Trading on Wed Aug 08, 2018 12:19 pm

yogi11137


Stock Analytic
Stock Analytic

SWING TRADING FUNDAMENTALS


In this particular case, we will talk about the AUD/USD and that should lead us to study two economies:





THE AUSTRALIAN ECONOMY


The Australian economy has experienced steady growth and enjoys low unemployment, contained inflation, very low public debt and a robust and established financial system. With an average growth of 3.5% per year, by 2012, Australia had experienced more than 20 years of continued economic expansion.
Demand from Asia
Demand for resources and energy from Asia, in special from China, has grown rapidly, creating a channel for resources investments and growth in commodity exports. The high Australian dollar has hurt the manufacturing sector, while the services sector is the largest part of the Australian economy, accounting for about 70% of GDP and 75% of jobs.
Australia and the global financial crisis
Australia was practically not affected by the global financial crisis as the banking system has remained strong and inflation is under control. Australia has been highly favored from a sudden surge in its terms of swing trade in recent years, originated from rising global commodity prices. The country is a significant exporter of natural resources, energy, food and its abundant and diverse natural resources attract high levels of foreign investment including extensive reserves of coal, iron, copper, gold, natural gas, uranium and renewable energy sources.
Let’s us show you, as an example, how the Australian labor market has been performing in the past few months:




Australia’s Employment Change:
Date                Actual              Forecast          Previous
17/08/2017     27.9k               19.8k               38.0k
20/07/2017     14.0k               14.4k               38.0k
15/06/2017     42.0k                  9.7k              46.1k
18/05/2017     37.4k                  4.5k              60.0k
13/04/2017     60.9k               20.3k                 2.8k




This indicator measures the change in the number of employed people during the previous month and traders are particularly interested in it because job creation is an important leading indicator of consumer spending, which accounts for a majority of overall economic activity.
As we can clearly observe, jobs creation in the Aussie Economy has been thriving lately with the actual figures released 2 and even 3 times more than the foretasted figure. That is a sign of a very strong and stable economy.

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