This is my Swing Trade Template I've been working on for StockFinder. I have the basics of the signals completed, but still need to add some indicators and a possible market index/breadth indicator so you know when the timing is best for a potential swing trade. This basically shows you some entry points, what is important in the swing trend and what is just noise as well as exits.
I prefer using this on an intraday basis as far as entries/exits are concerned, there's no need to wait for the daily close when a swing pivot has been taken out as the entire concept is based on Swing pivots. Remember that Swing trades aren't meant to be long trending position trades, although you could certainly use this chart on a multi-day timeframe to define longer trends.
If you are running StockFinder as your charting platform and are interested, I can give you what I have so far or you can wait until I finish the template.
Here's an example chart to explain the concept of pivots and noise.
This is the daily Swing chart, you could even use this intraday for intraday trading, but as far as Swing trading, use the daily chart.
From left to right, in Green we have our first Swing long entry, although you may have used other indicators to enter the trade earlier, this template is still helpful in identifying noise in the trend. Now we have a swing uptrend, the yellow arrow denotes the pivot candle, it is the last candle in the trend that makes the highest high. The white candles are noise, however once again, other indicators can be used to supplement and quantify the noise, whether it is just noise or whether it should be taken more seriously and stops tightened or partial profits taken. The next red arrow is the exit from the Swing Trend and if conditions are right, it is a swing short entry. This candle made a high lower then the pivot candle's low, thus we don't have to wait for a closing basis to execute the stop. Next we have a swing short trade, the yellow candle is the pivot, it made the lowest low in the series, therefore its high is what we want to watch. The first green candle made a low higher then the pivot candle's high and thus closes the swing trade and if conditions are right, opens a long swing trade. Next is the long swing candle pivot at the yellow arrow, it made the highest high of the series and its low is the stop. The white candles are noise within the trend, next we get a stop on the long swing trade at the next red arrow and a short swing trade which makes a long legged doji star, a hint that a reversal is coming. Two days later that short trade is stopped and a new long swing trade is in effect, again the yellow candle is the pivot and the red candle is the stop out.
Using this same layout on a 5-day chart can be helpful in trading WITH the trend. Some of the indicators I still have to add will identify the trend, but even the direction of a simple moving average can be used, the length depends on the timeframe you are trading.
Here the general trend is down, all of the same concepts apply, except this is on a 5-day chart, the idea is to only take the short trades as they are with the trend and to be out of this particular market when the trade ends and wait for the next set up. As you can see, there were 4 winning trades, 1 break even and 1 slight loss. Additional indicators and analysis can certainly improve your entries and exits, but if for no other reason, the template is valuable for understanding noise candles in white.
Email if you are interested in the layout.
No comments:
Post a Comment