In technical terms we called position trading as swing trading. These swing trading strategies are very useful for those investor who are looking for long term profits.
Apart from these swing trading strategies , here you will also get knowledge about some positional trading tips that you can use while purchasing and selling any share. I am writing this article on the believe that you know Technical analysis already and know how to apply Technical Indicators on the chart.
There are many ways through which you can find swing trading opportunities; we will discuss each in detail. This strategy is based on the contra view of the market. In this strategy we are trying to predict the first reversal from the uptrend and first reversal from the down trend.
When a stock making continuously higher high higher low pattern is called uptrend and vice versa when stock making continuous lower highs and lower lows the trend is called down trend. See pictures below for more clarity:.
First, you need to identify the uptrend and downtrend stocks, if any stock is continuously making 4 to 5 waves of higher highs or lower highs is the right candidate for swing trading. See the example below. As seen from the above chart that Nifty is currently in uptrend, continuously making higher high and higher lows. Now, the next step is to create the trend line on the chart and wait the price to breach the lower side of the trend line.
More clarity comes from the next chart posted below:. So, the rule here is that price has to breach the lower side of the trend line and on the next day, price must breach the low of the yesterday low of the stock.
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Once these conditions are satisfied you can go short in the nifty and this is called a swing trade. As seen clearly from the above chart that Axis bank is in continuous uptrend. It breaches the lower trend line and on the next day it the breaches the low of the yesterday at and thereafter made a low of So, as you can see it is a good swing trade setup and currently the position is still in sell mode.
In this swing trading strategies, you need to identify the swing points to enter. Now, the question arises what are swing points? Answer is there are two swing points swing high and swing low. For entries on long side you look for swing point low, for entries on sell side you look for swing point high. Concept here is that third candle will tell us that seller is going to weak and the stock will likely reverse.
We clearly marked the swing pivot low level. So, you must buy above the high of 3 rd candle and keep the stop loss of 2 nd candle. Same concept as describe above, third candle tell us that buyer gotten weak and stock likely to reverse.
Example of swing point for sell opportunity: First strategy that we discussed is a contrarian strategy which is also called counter trend strategy or fading strategy.
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This strategy works against the trend, in this we try to pick the bottom or you can say we are looking for first sign of reversal from uptrend and downtrend. Traders who are conservative or risk averse can follow this strategy as this strategy will give you good risk reward ratio setup.
Means for every one single rupee risk the gain would be minimum two rupees and maximum it can go up to rupees five. In this strategy at the time of pullback in an uptrend you must look for swing point low and enter on the 3 rd candle high. It is also a good risk reward ration strategy as your stop loss is just placed below the low of the second candle.
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This strategy is based on Relative Strength Index and I found this strategy quite profitable with very good risk reward ratio. In this strategy stop loss is placed below the last pivot of the candle, by applying this strategy you can hold the stock from 2 days to week and get good profits. This strategy combines the use of technical indicators.
As you can see from the above chart that it is a very profitable strategy and you can apply this strategy on large cap stocks. It is one of my favourite strategy so far. Let me know if you have any questions regarding this strategy. In this strategy you need three type of moving averages, in this strategy you need to keep lots of patience because trading is a game of discipline. This strategy is based for the conservative traders. Once both the 50 days exponential moving average trades above day exponential moving average then long entry price triggers vice versa if both the moving average trade below day moving average then sell entry triggered.
See the example below:. Once 20 day exponential moving average crosses 40 day exponential moving average from below and ADX 14 period showing level of 30 it confirms that stock is in uptrend. Now, the question arises where to enter? Answer lies in the pullback, once price gave pullback to near 20 or 40 period moving average, vice versa for sell trade.
Before trading these strategies on live account, I suggest to practice them on paper for at least period of three month, once you will get accustomed to this strategy the you will do live trading. Home Live Trading Signals -free Trading Tips Featured new business ideas latest news. Next article top free best nifty bse intraday trading stock tips for indian Investors.
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