Swing Trading Intensive - Swing Trader's goal

Swing Trading is a wave trade - so the goal of the swing traders is to catch the bullish or bearish wave of the market to make a profit.

You all know that the market moves not in a continuous up or down pattern, but in a pair of waves: including corrective push-waves, and these wave pairs only appear when the market is trending...

In an uptrend, we will have a push wave of a strong and long uptrend, and a corrective wave of a smaller, weaker, and shorter downside wave. On the contrary, in the downtrend, we have a push wave that is a large, strong, and long downward wave, with a correcting wave of the small and weak uptrend.

Thus, the aim of a swing trader is to capture push waves - upside waves in an uptrend and a downside wave in a downtrend. So they will exit when the market goes out of the wave and will re-order when a new push wave continues. This is different from Position traders (position traders) when they will keep their orders when the corrective wave takes place, while the swing traders will exit when the push wave ends.

Swing trading is like a trading form between short and long-term trading. Short-term traders (scalpers) are players who like to get in and out quickly, catch short waves and take profits early. And the long-term position trader (position trader) will hold the position for a long time until the full trend breaks, they will exit.

The preferred time frame for the swing traders is D1 (day). As such, they still have the comfort of trading, and still, be able to make a big profit.

Swing Trading Intensive - Market Stages

Before trading, swing traders will usually determine what stage the market is in to have a sound strategy. Actually, position traders will also do this, even more often.
The market has 4 phases: accumulation - increase in price - distribution - decrease price.

The basic wave structure is a framework of the way the market moves, which tends to repeat on all timeframes and all different markets. All markets tend to move in a structure of 5 waves including the push wave phase and the corrective wave phase. With swing traders, the period of a push wave is when we will aim to make a profit.

The push wave phase of an Elliott wave cycle consists of 5 waves. You can see the waves marked from 1 to 5. This phase is similar to a small uptrend.

The corrections are marked as Wave A, Wave B, and Wave C. This is the period when the market corrects after the bull run. This will be the time when we stand outside the market looking for new trading opportunities.

Wave 1: This wave breaks the previous downtrend and initiates a new uptrend. This is the beginning of the uptrend. The best trading opportunities are when this wave 1 corrects, called entry at the first pullback trade. This is a trading setup that is believed by swing traders to have the highest probability because it is only at the beginning of an uptrend when the momentum is still strong.

Wave 2: The first corrective wave. This is when we look for an entry opportunity as mentioned above. The Setup to enter the order can be a candlestick pattern, the price retest the MA line, or re-touch the 50% / 61.8% Fibonacci regression point, etc.

Wave 3: The longest and strongest wave of 5 waves. That is why we must try to enter when wave 2 ends, or at least when wave 3 starts.

When you buy stocks that have just entered wave 3, try to hold the position for a while. You will be grateful for yourself when you keep the command long and ride a long wave. Why? Because you guys already have 1 big win - a reward for good swing traders.

Wave 4: Pretty bad if you buy at this wave. The market will move more slowly, increase weaker, and are signals that the best part of the trend is over.

Wave 5: The last rally before a correction begins, often weak and easy to lose momentum.

Wave A, B, and C: The correction phase turns to a downtrend. Wave A is a bull trap, wave B cannot overcome the top of wave 5, and wave C is the third wave in a downtrend.

Lesson 4: The 3-step technique of catching the top bottom with the win rate of 80%

Here are 3 easy steps to catching the top of the market bottom with an 80% win rate. This three-step bottom-fishing method is that of Trader Victor Sperandeo as instructed in the book “Trader Vic - Methods of a Wall Street Master”. You can use these 3 steps to trade trend reversal or to take profit on profitable positions, in any case, it is also extremely effective.

The three steps include:
  1. The trend line is broken
  2. Price retest (retest) resistance and then fall further
  3. The price hit the bottom before
These 3 steps apply the exact opposite of the bearish to bullish reversal.

For example:

Step 1: the trend line is broken

In the example we see the trend line has been broken and the candle closed below. However, as learned in the previous lesson, breaking the trend line does not mean trend reversal, it is just an early sign for us to be more cautious about holding positions. With traders reversing this is the first sign to look out for.

Step 2: Price hits resistance again and then falls again

We know that in an uptrend there is a higher high-low; when the price hit resistance again and turned down it was unable to make a higher high. Thus, it is possible to place a big question mark for this uptrend. We just question that the trend will reverse only, there is no confirmation signal.

Traders who are currently in a profitable position can close half the position; Reversing traders prepare their position to enter.

Step 3: The price broke the previous bottom

At this time, we confirm that the trend has reversed to bearish. Why? Because the price was unable to make a higher high AND made a lower low. A lower high and lower low is a clear definition of a downtrend.

Now that the trader has a position that should be completely closed, the reversing trader can immediately short-sell with the stop loss above the nearest swing High peak.

Reverse example:

Price breaks the downtrend line -> re-touches support and moves up -> breaks previous top, confirming trend reversal.

It seems that all trend reversals on all markets go through these 3 steps, and its correct rate is 80%. The remaining 20% is when price creates a complex pullback wave, in which the recovery wave is also a complete trend (small trend inside a big trend).

Intensive Swing Trading - Uses moving average crossings

For example:

MA 10 is about to cut MA30, which is a sign of trend reversal. A confirmation signal appears when the price breaks down to the nearest swing low.

Lesson 5: Using MA to catch big waves of the market like Pro Swing Trader

Use 2 MAs to signal waves

Two different periodic moving averages have a cross that will signal the market has a new wave. In fact, this signal always goes slower than the price, ie the market has waves, then the new MA line will cross, but it is still a little slow but still better.

Use an intersection between MA 10 and EMA 30 to create an intersection:

We have a bullish crossover which means the market has started a new uptrend. The principle of following the market wave is very simple: only buy when the MA 10 is above the 30 EMA; sell only when MA10 is below 30 EMA.
Note that moving averages only work well when the market is trending, when the market accumulates or trades sideways, the MAs will have a random intersection.

Here are the guidelines to keep in mind for BUY orders with high probability:
  1. MA10 must be above 30 EMA
  2. There must be a relative gap between these two lines (ie these two lines are not twisted together, usually the market is then going sideways and there is no trend).
  3. Both roads must be facing up
Swing Trading Intensive - MA 200

The MA 200 is an extremely important and special moving average. It is the boundary between a bull market and a bear market. As long as you comply with the MA 200 principle, you already have quite a few advantages over other traders.

Rule: Buy only when the price is above MA200, sell only when the price is below MA 200, on all timeframes.

Especially for the stock market, the MA 200 is the most important line. It shows whether a stock is in a bull market or a bear market.

Intensive Swing Trading - Avoid trading when the price is too far away from the MA

Any MA shows the average market closing price, roughly the price at which the market is in the normal state, without being stretched.

When the price is too far above the MA, the price is being overbought; when the price is too far below the MA, the price is being oversold.

Rule: Don't buy when the price is too far above the MA; not sell when the price is too far below the MA.