Swing Trading Strategy | Day Trading Strategies For Beginners | Trade Room Plus


Swing trading strategies can be highly
profitable, but you have to know the right techniques in order to take the
trades. in this video I’m going to teach you the techniques so you too can take great
swing trades. So as usual going to be looking at some live trade examples, you
can see here currently have a couple of large swing trades on that are still
currently open at a time of recording this video, which makes some fantastic
examples to talk you through and teach you about. Again, it would be very easy
for me just to take some charts like this and say, ‘Oh go long here
you could read lots and lots of money in hindsight’, but that’s not going to help you
learn to trade. The reality is you need to know what a setup looks like before
is actually occurs. You know most people who do sort of trading education
in these sorts of videos they’re just going to take charts in hindsight and that
doesn’t really help you learn you know you can’t trade what’s already happened.
Now the most important part is I’m going to show you live trading examples. Make sure you stay to the ends of the video to watch those because they’re
going to reinforce all the techniques I’m about to teach you. Now swing trades
are ideal for trading every type of financial instrument whether you want to
be looking at forex or indices or stocks or gold or commodities or anything else
that takes your fancy, or that you’re attracted to for trading, you could apply
these techniques with minor modifications to every single market. Now
for me there are two types of swing trading strategies that I found success
with over the years the first are reversal swing trading strategies. Now
that’s when you take a market like this look at these lows and have a strategy
and technique to ride on board as the market reverses and rallies back up. Now
the second type are breakout / momentum swing trading strategies that
would look more like this when a market breaks into a new range. Now we’re going to be focusing on the breakout / momentum swing trading strategies, so
why is that? quite simply they’re the strategies that
are working in the current market conditions. It’s very very important to
recognise when a strategy is suitable for the current market conditions. A
failure to do so will result in losing trades that you don’t necessarily need
to take, frustration and it almost feels like you’re trying to hammer a square
into a circle hole at times and we’ve all been there when we’ve got a strategy
that works in one market condition the market changes we try to make it work we
try to force different market conditions, and all it
leads to is trading disaster. Step 1: Recognising momentum and a trending
market. Now equity markets are very very good for this if we look at the DOW
Jones Industrial Average when we take it over quite a lot of years, you’ll see
there’s a monthly of candles, you can see that the markets generally go up and
every time the market has gone down whether it’s the DOTCOM bubble, the 2008
subprime mortgage crisis or some of the volatility we saw at the end of 2018, the
equity markets will generally recover and that always gives us a great
opportunity to take these sort of swing trades. Now we could recognise momentum
for using some technical analysis for example we could put on an ADX
indicator, that you can see here, but rather than me explaining what all this
does and all this means just have a look at the market. I mean take the DAX for
example, if we turn onto the German stock market the DAX here, which is one of
examples we’re going to be using today, just have a look at it visually since
the beginning of 2019, like equity markets across the globe, it’s just gone up in a
straight line you don’t need technical analysis or any fancy indicators tell
you the market is going up. Now a really good exercise to sort of reinforce this
step one is to take a chance and strip it down just to the candlesticks. So if
we have a look here we can see we’ve got a very very simple chart we don’t need
moving averages we don’t need technical indicators we don’t need anything else
to develop these trading skills. Now what you need to do is identify whether the
market is suitable for this breakout / momentum swing trading strategy. If
it is then we put it on to our shortlist as a potential opportunity to trade. Now
if we see a market like this and we identify it as a sideways market we
can see all the characteristics of a sideways market. The market comes up to
these highs, reverses and goes back down. Market comes down to these lows, reverses
and goes back up to these high. So we would filter that out that is not
suitable for looking for. Again change to another chart, we can see the market
is trending up nicely so all the classic signs of trending with this pattern,
higher-highs, higher-lows, so we know we could potentially look a trading this
market. If you go away and do this exercise it wants to be really really
obvious and instinctive and quick. You want to be able to look
at a market and straight and say, ‘That’s in a trend’. The more obvious and quicker
it comes to mind the better and more powerful it will be. So if this is
starting to make sense to you think that this might help your trading then please
subscribe to us by clicking here in the bottom corner because there’s going be
so much more of this content coming on this channel that’s going to help develop
you as a trader. Step 2: Identifying an entry. Okay, so we’ve
managed to find out when a market is trending and when it’s got momentum just
by looking at it trends would be very very obvious we’ve already stated, but
how do we get on board with the move there’s nothing more frustrating for a
trade than to think a market is going to do something or see a market moving in
a direction and not getting on board of it. Perhaps you didn’t have the technique
or the courage to do so, perhaps you’re a little bit fearful regardless of the reason if
a market moves without you then it can become very very frustrating and it can
lead you to do stupid things in your trading like trying to get in a entry
that’s too late or trying to chase the market or revenge trading or trying to
go in the opposite direction to prove the market you’re right. Any such
behaviors are just going to lead to trading disaster and that’s what we need to be
avoiding. Now one of the ways we can get on board with these trades is they break
into a new range. If you have a look at this chart here, you can see the market
has tested this resistance level several times, before it eventually breaks up. So
what we’d want to do is be long at the point that it breaks up and hopefully
we’ll see a continuation of that momentum now this is essentially a break
out technique now I did a video recently on break outs, that was more aimed at day trading than swing trading, so a little bit more longer-term there, or it can
be a lot more longer-term in fact, but exactly the same techniques are
applicable so if you don’t learn a little bit more about that before you
come back to this video then you can click up here. Now another way we can get
on board with these moves is to wait for a pull-back now what I mean by that is
this let’s have a look at the cable forex pair which is the pound and dollar.
We can see in April 2018 the market started to really sell off. Now that’s
great unless you live in England like I do and travel to America and you don’t
get as-quite-an exchange rate. Anyway, so we needed to step one to
establish itself we needed to visually see the market in a downtrend which took
us probably about six weeks in order for us to have confidence and it was in a
downtrend, and then we could have either taken new breaks of a low,
which was a break sort of maybe down here, or wait for a pull-back. Now it
wasn’t until June that we got on board with this market because it took us a
little bit of a while to be confident that this was in a downtrend. Remember you’ve
got to wait for the right market conditions. Now in June we were patient
and we waited for the market to pull-back to this red moving average. Now a quick tip: The 10, 20, and 59 exponential moving averages are fantastic for
pullbacks across a range of instruments particularly indices, stocks and forex
pairs. Now you can see how the market came to this 20 EMA and we ended up
getting short down here and riding this trade. I don’t actually have that
recorded in his live trade so we’re not going to dwell on it, but that gives you
an example of when you can look for a pullback. And there are other ways of getting
on board of pull-backs which I’ll have a look at, but remember that 10, 20, and 59
EMA are very very good for spotting pull-backs Step 3: Trade management. So having a look at this S&P chart, we can see how the
market has been trending up nicely for step one, and step two we’ve defined our
entry above here at 2861 the reason being that were found resistance on the
high of Thursday the 21st of March. We’re interested in taking a break long of
that which we do and we’ll have a look at in a live trade later, so that’s where
we get into the trade, the next question is ‘Where do we put our stop loss and our
profit target?’ Well we can see we’ve got a pretty significant pull-back on the S&P
down here, you’ve got a few downward candles here and one day 25th and Wednesday the 27th, so we’re gonna put a stop loss just around there and it’s also going to
be below these two moving averages well. Then we want to set our initial profit
target at least a similar distance away from the entry as we placed our stop to
make sure we’re getting good risk reward ratios. And if we combine that with a
positive win percentage i.e. above 50%, then were well on our way to having a
fantastically profitable trading strategy. Now one of the challenges
you’re gonna have with swing trading strategies is just leaving the trade
alone, you know these trades are going to be lasting days potentially even months and
if you’re keen on day trading or you like to press lots of buttons and get in
on the action as you may well do as a trader, and particularly as a beginner
trader, then you’re going to find it very difficult to leave it alone, particularly if
you’re staring at your screen all the time, and that’s quite a difficult discipline
technique to develop. Now this video is not going to
be discussing the vast area of trading psychology, but there’s something very
important you need to be aware of. Just leave the trades alone and allow
them to play out, if you strangle them, if you snatch profit you’re just going to ruin
these strategies and they’re not going to work out for you.
So on to our live trades. Step one is the market a trending market? Yes, the market
is we can see throughout the entire of 2019
the market has trended. Now how can we get on board with this trade? Can we take a
breakout or can we take a pullback? Well we can see the market started to go
sideways in April and we can see it is rolled back to the moving averages, it’s
come down to the 10, the 20 and 59 EMA. Step 2: How can we get
an entry? We come down on to the 5-minute time frame on a Friday the
12th of April, and we can see this pattern started to form. We had a gap
down when the market opened. The market then form resistance, and then the market
then broke above that resistance, so it was almost like a combined breakout on
the 5-minute time frame, but on the longer-term time frame it was a pullback.
So step three: Our trade management, you can see we have our stop-loss just below
this higher-low, we also have a profit target equidistant away from our
entry as our stop loss. Now the key thing with a profit target is that we scale
out here and that means we don’t close our entire position, so we still have
some profit banked when it gets to the profit target, but equally, we still have
the trade running if it carries on going up which it did. Now one thing that
professional traders are very very good at is adding to winning positions. Now
that’s because they’re able to separate each trade and each opportunity. Now the
amateur trader may see that we’re in a long from the 12th and they may say, ‘Well
I don’t want to add to this position or take another position because what if it
turns into a loser?’ Now you’ve got to separate the trades
into sort of individual components rather than a series or you end up
getting in the mindset where you’ll be fearful and you won’t take further
trades. Now if you look here you can see such an opportunity.
We know step one that were in a trending market but look here for step two, our
entry, we can see the markets found resistance on the 12th and then twice
again on the 15th, so we’re looking like the market is going to break into a new
range and that gives us an opportunity take a new trade. So we place our entry
at 12,032, and then step three, the management of this trade. We put our stop
loss down here at 11,97.0 Because if the market rolls over we don’t be
in the trade anymore, and we have our initial profit target up here at 12,096 Because that’s about equidistant away from our entry
to make sure we get some good profit banked as the market moves up, which it
does very very quickly on the 16th. But equally, again, we scale out to allow
part of our trade to carry on if the market moves up and turns into a swing
trade. So where does that leave us in terms of P&L? We can see we scaled out on
the 12th that left us with £750 pounds. We’ve scaled out on the 16th that left us
with £636, but as we can see without open positions that’s where we’re really
starting to see the strong P&L. Now I think adds up to about £7000 in
total, so you can see here these swing techniques when we really start to get
on board with a nice trending market with good momentum is when we could
start making the serious sort of money we all want to make from trading. We also
have two other longer-term swing trades on the S&P 500 which is a big American
stock market index with lots of companies that you’ve probably heard of. So step one: Is the market trending? Yes the market is very clearly trending
2019. We can see a very very strong uptrend, so we’re interested to see if we
can get on board with this trend. Step two: How do we define our entry? Well we
can see here in March we set a resistance level before the market
pulled back nicely down here so we set in order to get long just above there
that’s triggered it off on the 13th of March. Step 3:
How do we manage the trade? Well this pull-back here, the low of March, we place
our stop loss below there. If the market rolls over and goes below there, we no
longer want to be in the trade and then we set our profit target up here at 2927, which is just near the all-time high where we expect resistance. And we know
looking at the volatility of this market in our daily ranges that we’re going to
be in this trade for some time and we are still in this trade over 6 weeks
from taking it so this is what I mean about having that patience and
discipline just to leave the trade alone and let the market play out, and find the
momentum that we know it has. But as professional traders we’re looking to
add to positions we’re not just going to sit on
one trade. If the market’s moving nicely and we want to add to winning positions
to make sure we maximise the opportunities the markets offering us. So
step one: We know the market is moving up we know it’s got good momentum, we know
it’s trending. Step two: Where can we place an entry? Well look at the high of
March that’s set on the 21st of March, before it pulls back nicely. It’s another
resistance point. We can take a break into a new range. So what do we do, we set
a trade just above there using step two and then the market trends up again and
we place a profit target up at 2927, and we have a stop-loss down
here at 2790. So again following the techniques following the
rules we add to a second position. So we haven’t scaled out in these positions
but you can see position one is up about £1800 pounds and position two
is up about £900, which is not as big as the first trades but it
certainly adds to them and makes for a very nice and very profitable trading
month. Step one: Identify a trending market with momentum.
Step two: Define your entry
Step Three: Manage your trades. Use them, make profit. Now watch another video to continue your learning Click on the video above!

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