Swing Trading with PowerRatings
Today’s
PowerRatings
article is going to cover an advanced PowerRatings strategy taught by Steve
Primo, TradingMarkets Director of Education. Steve teaches advanced PowerRatings
classes every week day (click
here for more info).
Swing Trading with PowerRatings
Here are the Swing Trading rules:
- Stock makes a new swing high/low
- Stock retraces between 50% and 75% of prior
move - Stock has a PowerRating of 7-10 (buys) or 1-3
(sells) - Place stop loss above/below swing high/low
- Exit at old swing high/low
And here are some examples:
Advanced Micro Devices
(
AMD |
Quote |
Chart |
News |
PowerRating) makes a swing high, retraces 75%. On 01/17/06
it had a high PowerRating triggering an entry either late that day or early the
next. AMD hit its target price (swing high) on 01/19/06.
Arena Pharmaceuticals Inc.
(
ARNA |
Quote |
Chart |
News |
PowerRating) makes a swing high, then retraces 75%.
ARNA had a high PowerRating on 01/13/06, triggering an entry. Ten days later,
ARNA hit its target.
Panacos Pharmaceuticals inc.
(
PANC |
Quote |
Chart |
News |
PowerRating) is an example of a short sale. It makes
a swing low, retraces 50% with a low PowerRating, triggering a short sell entry.
Eight days later, PANC hit its target.
SanDisk
(
SNDK |
Quote |
Chart |
News |
PowerRating) is an example of what to do when this strategy doesn’t work.
SNDK makes a swing high, retraces 75% with a high PowerRating, rallies for two
days but fails to hit its target. SNDK keeps on falling until hitting your stop
loss (rule 4 above).
In the final example, Volterra Semiconductor
Corp.
(
VLTR |
Quote |
Chart |
News |
PowerRating) makes a swing high, retraces 75% with a high PowerRating
before rallying to hit its target seven days later.
As these charts show, “Swing Trading with PowerRatings” can be a very
powerful technique. But as the example with SNDK shows, it’s important to have a
stop loss to control risk.
Having a profit target is also useful, as it allows you to calculate risk/reward
ratios.
Click here
to take a free trial of
You can also
attend a free
class on how to use
PowerRatings
presented by Steve Primo, our Director of Education.
Ashton Dorkins
Editor-in-Chief
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