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How to Swing Trade: My System - The pattern (Part 1)


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This is part 1 in a series of presentations that outlines my swing trading system. Here I describe the pattern that I swing trade, showing you the basic move up and down that I look for.

For more info on my thoughts about swing trading this pattern, or swing trading in general, visit my blog:

Published in: Economy & Finance
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How to Swing Trade: My System - The pattern (Part 1)

  1. 1. How I Swing Trade Part 1 - The move up & the move down
  2. 2. The move up & the move down: AAPL
  3. 3. The move up & the move down: AAPL The move up (GREEN arrow) I always scan to the left to view the pricing action going back over the previous month. You can see that right around the start of November, AAPL moved sharply higher. That is a pretty powerful move. It lasted about 9 days (each candle is a day) after trading in a relatively quiet period through October. After that initial move that lasted about a week and a half, AAPL traded sideways for the most part and then... The move down (RED arrow) The bottom fell out.
  4. 4. AAPL: Psychology behind this chart The move up (Green arrow), was relatively fast and quick. Those that bought here, I call Phase 1 buyers. There is another "hidden buyer", which is the one who regretted not buying in during the sharp move up which occurred during the GREEN arrow time-frame... Hidden Hillary's I like to call them. The move down (Red arrow), was relatively fast and quick. Many of those that sell here, are the same Phase 1 buyers that now have a loss.
  5. 5. AAPL: Phase 1 buyers during the Green up period ● They got in, expecting the sharp move up to continue. ● It didn't do much... trading sideways. They held. ● Then comes the sharp move down. The recent buyers are now showing a loss. They watch as each day, their loss keeps increasing. ● Finally, they've had enough. They throw in the towel and sell on the way down shown by the RED arrow. ● Those previous Phase 1 buyers (GREEN), become Phase 1 sellers (RED).
  6. 6. AAPL: The “Hidden” Buyer Steps In ● Hidden Hillary, who was sitting there watching the sharp move up and didn't participate. Maybe she was already a holder and regretted not adding more. Maybe she wanted to buy, but was uncertain of the direction. Well, in any case, she watched as AAPL rocketed higher and completely missed out, kicking herself each day. ● Then, the decline happened (RED arrow)! Now she's got a potential bargain on her hands, thinking to herself: "This is a buy! I’m buying shares on this dip and don’t want to miss out on the move like I did last time” ● So she gets in on the trade. There actually there are tons of Hidden Hillary's out there...buying in to get a bargain. ● This the classic definition of support. The reversal happens at the prior point of the breakout.
  7. 7. Let’s look at another chart: ON
  8. 8. Example Chart that I would never trade
  9. 9. Example Chart that I would never trade
  10. 10. Up Next: Part 2: Using Moving Averages 1. Visit my blog: 2. Sign up for my email list 3. Follow me on Stocktwits: 4. Subscribe to my YouTube Channel