What a Successful Swing Trade Looks Like Let's look at some examples of the kinds of successful swing trades that made Tudor Jones and Simons billionaires. Candlestick charts offer a wealth of information on where a stock is headed next. Swing traders look for streaks. They want to identify periods where every day is the same color. In the chart above, you can see instances where the stock goes red many days in a row because traders are trading in lockstep... pushing the stock down... Then the reversal happens. All it takes is one upward swing, and suddenly the algorithms of large traders change course. They swing back to buying instead of selling. When this happens, the days afterward all go green. Let's look at another example. You can clearly see here that this stock suffered several big consecutive down days. But then it reversed. It began with the first green bar. And then the stock swung higher. On this swing trade, you could've made 125% in nine days. Here's another example... There's a drop of six consecutive days. Then a reversal day, followed by the inevitable swing upward. This single trade would've made you 104% in less than a week. In all these examples, you are seeing algorithmic trading in action. Again, the quant algorithms are programmed to pick up similar patterns. They often operate in lockstep. So when one trading system is selling, most of the others are too. Then, as the sentiment swings in a positive direction, the same stocks rebound, almost as predictably as day follows night. In my Oxford Swing Trader trading research service, I use sophisticated software similar to what the biggest hedge funds use. So if my computers switch from selling to buying, it is very likely that the other computers are doing the exact same thing. All this is invisible to most investors. But computers programmed with the right algorithm can recognize these patterns in milliseconds. Once you know what to look for, predicting these movements becomes straightforward. Now, there's no guarantee that all swing trades will generate big gains within 10 days or so. But many of them do. My Oxford Swing Trader trading research service recommends an average of two swing trades like this each week. So you have plenty of opportunities - about 100 trades a year, in fact - to generate quick gains using swing trading methods. Good investing, Nicholas | 
No comments:
Post a Comment