Getting Started In Momentum Based Swing Trading
Getting Started In Momentum
Based Swing Trading
What is momentum based swing
trading?
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Short-term
positions taken with the trend.
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Normally held for 2-7 days.
Why Swing Trade?
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70% of a
Market’s Move Occur in 20% of the Time.
Mark Boucher
Who Should Swing Trade?
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Those Seeking Short-term
Gains With Definable Risk
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Daytraders Looking To Gain
An Edge
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Longer-term Traders
Looking To Help Time Entries And/Or "Trade Around" positions.
Momentum–The Main Ingredient
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Momentum Based Swing
Trading Is About Trading WITH The Trend.
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It Is NOT About
Picking Tops/Bottoms Or Fading The Market
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Of Course Tends DO NOT
Last Forever, BUT They Often Last Much Longer And Go Much Further Than Most
Are Willing To Believe.
Identifying Momentum
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Computerized Methods: ADX,
RS.
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Trend Qualifiers
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Strong Trends Leave
"Clues" Behind
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I Have Dubbed These
"Trend Qualifiers"-
Gaps,
Laps, Base Breakouts, Strong Closes (for uptrends), Wide Range Bars
(i.e. Thrusts), New Highs (for uptrends).
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Moving Averages
Slope
Daylight
Proper Order
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Identifying Trends IS
NOT Rocket Science.-
If Can’t
Decide If A Market Is In A Trend Then:ASK A 6-YEAR OLD KID!
If He/She Cannot Tell
You In Which Direction A Market Is Headed, Then It’s Probably NOT A
Trend.
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The Pullback–The Concept
Behind Momentum Based Swing Trading
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Trend Trading Is NOT About
Blindly Jumping On A Trend
You Are Much Better
Off Waiting For A Normal And Often Health Correction To Occur And THEN
Look To Position Yourself If AND ONLY IF! The Trend Begins To
Re-assert Itself
Money Management–A Crucial
Element
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The Best Method In The
World Is Completely Worthless Without Proper Money Management
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The Goal Of Money
Management Is To Protect You From Excessive Losses While Still Allowing You
To Capture Extraordinary Gains
Protective Stops On EVERY
Trade
Take Partial Profits
When Presented
Trail Stops To (hopefully)
Capture Extraordinary Gains
Putting The Pieces Together
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Market
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Sector
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Stock
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You