Steps to Swing Trading:
1. Find a trend: uptrend in bull price action chart, or downtrend in bear price action chart.
2. Analyze the trend to find the best entry points on that trend. That means finding the HL higher low points in and bull market, and LH lower high points in a bear market. Look for HLs in a bull market, and LHs for a bear market.
3. Confirm the best entry points in the trend with supporting candlestick patterns. Find a good bullish candlestick pattern on the HLs of a bullish market, and good bearish candlestick patterns for LHs of a bear market. These include pin bar patterns, engulfing candlestick patterns, inside bar candlestick patterns. They confirm a reversal
As a general rule of thumb, entry points above 30 Day and 50 Day EMA lines provide more confirmation of the direction of the trend.
To be most successful, remember to never go short in the bullish/uptrend market, and never go long in a bearish/downtrend market. This manages risk.
Uptrends:
Wait until an uptrend is confirmed before investing: uptrends are confirmed by two higher highs, with two higher lows on the chart.
To elaborate, that means if we have two back-to-back HHs and HLs, that indicates the uptrend is confirmed and it's time to look for strong bullish candle or bullish reversal candlestick patterns at the third HL.
Downtrends:
To confirm downtrends, wait until two lower highs and two lower lows have formed in the price action chart.
If you find two recurrenct LHs and LLs in a chart, then this price action setup marks that a new downtrend has been confirmed and the bear has begun.
Start selling/short trading from LH 3 IF you find a strong bearish candle pattern or a strong bearish reversal candlestick pattern at the lower high level 3.
Conclusion:
This is the main process for swing trading strategy. Practice this process on historical charts to improve your understanding and mastery of the strategy, then manage your risk investing.
1. Find a trend: uptrend in bull price action chart, or downtrend in bear price action chart.
2. Analyze the trend to find the best entry points on that trend. That means finding the HL higher low points in and bull market, and LH lower high points in a bear market. Look for HLs in a bull market, and LHs for a bear market.
3. Confirm the best entry points in the trend with supporting candlestick patterns. Find a good bullish candlestick pattern on the HLs of a bullish market, and good bearish candlestick patterns for LHs of a bear market. These include pin bar patterns, engulfing candlestick patterns, inside bar candlestick patterns. They confirm a reversal
As a general rule of thumb, entry points above 30 Day and 50 Day EMA lines provide more confirmation of the direction of the trend.
To be most successful, remember to never go short in the bullish/uptrend market, and never go long in a bearish/downtrend market. This manages risk.
Uptrends:
Wait until an uptrend is confirmed before investing: uptrends are confirmed by two higher highs, with two higher lows on the chart.
To elaborate, that means if we have two back-to-back HHs and HLs, that indicates the uptrend is confirmed and it's time to look for strong bullish candle or bullish reversal candlestick patterns at the third HL.
Downtrends:
To confirm downtrends, wait until two lower highs and two lower lows have formed in the price action chart.
If you find two recurrenct LHs and LLs in a chart, then this price action setup marks that a new downtrend has been confirmed and the bear has begun.
Start selling/short trading from LH 3 IF you find a strong bearish candle pattern or a strong bearish reversal candlestick pattern at the lower high level 3.
Conclusion:
This is the main process for swing trading strategy. Practice this process on historical charts to improve your understanding and mastery of the strategy, then manage your risk investing.
