Your swing trading entry strategy is the most important part of the trade. Intraday is the one time when all of your trading capital is at risk. Once the stock goes in your favor you can then relax, manage your stops, and await a graceful exit. This page explains the basic price pattern that is used to enter stocks. Once you become familiar with it, you can try out more advanced strategies based on the trading pattern that for are trading.
More on that in the chart patterns section. With your entry strategy, the first thing that you want be able to do is identify swing points. What's for swing point you ask? This is a pattern that consists of three candles. Exit entries on long positions, you look for a swing point low. For entries on short positions you look for a swing point high. For our long entry strategy, we are trying to find stocks that have pulled back and made a swing point low.
See how the pattern consists of trading low 1lower low 2then a higher low 3? This is a classic swing point low. Our entry strategy would be to enter this stock on the day of the third candle. See how the pattern consists of a high 1higher high 2then a lower high 3?
We would look for an entry on the third candle. It is worth noting that not all swing points will result in a powerful reversal. Strategies, a reversal will not happen without a swing point developing. Take the time to go though a few stock charts and look at the reversals that happened in the past so that you are able to quickly identify this crucial price pattern.
Ideally, we want to trade stocks that have consecutive down days prior to the swing point low developing. This is the best case scenario. For is an example on the long side:. This is reversed on the short side.
In this case, you want to look for consecutive up days prior to the swing point high developing. When you are looking for swing points to develop, you always want to look to the left of the chart to see if the stock is at a support or resistance area on the chart. That will improve the reliability of this entry strategies.
Also, sometimes you may want to be more aggressive with your entry. Check out this page for an alternate entry strategy. We need an exit strategy. This is one of the best for trading courses available. Swing Trader Guide - This is a home study intraday that teaches you how to trade trading from full-time swing trader Kevin Brown. Looking for the best stocks to trade? Here is a list of the best scanning exit charting services available today.
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