Best High Probability Swing Trading Strategy


By that what I mean to say is that there is a point of diminishing returns. In other words, you should utilize two or three unique trading tools to find high probability trade setups. Many traders are under the impression that confluence simply means that all of your preferred indicators should be providing you confirmation on the trade. However, some of these traders fail to realize that many technical indicators are redundant and as such they may not provide unique information. There are many chart patterns that can occur in the market. Some of the more common chart patterns include the head and shoulders, double top and double bottom, rectangle, wedge, triangle, flag, pennant, and cup and handle.

He provides his Tim Alerts daily newsletters with penny stock picks every market day around 8am EST / 5am PDT with a set of stock watchlists for the day. You can receive this by email, SMS or even push notifications in real time throughout the trading day. Tim Sykes rose to fame by taking around $12,000 in bar mitzvah financial gift money and day trading it on penny stocks. By the time he’d graduated college, he’d become a self-made millionaire with the intent of teaching others how to replicate his success. You can use this paid swing trading alerts service to take advantage of short-term movements in the market. As the market evolves, Trade Ideas’ software adjusts levels and the trading plan to match.

high probability swing trading strategies

For example, the Chicago Mercantile Exchange Group requires an account maintenance balance of $1,100 on E-Mini S&P 500 futures and $55,000 on S&P 500 futures. Before you begin, take advantage of paper trading, which is the process of making hypothetical trades as if you were trading real funds. Let’s take a look at some examples of where and when a market might have a decent amount of potential directional energy. At the high of the range, there’s the maximum potential for price movement possible, without the need for the balanced ranging behavior to change.

Ross Cameron’s experience with trading is not typical, nor is the experience of students featured in testimonials. Becoming an experienced trader takes hard work, dedication and a significant amount of time. And when you’re selling to green-pea traders, the best way to get them to hit that buy button is with the allure of never losing a trade. Cutting losses quickly doesn’t mean to just close trades soon as you see red in your P&L. The size of your partial profit target in terms of the percentage of your total position size isn’t immensely important. I personally like to use around 25%, but that’s just what I’ve found benefits my style and psychology the best.

Daily Zone which was created all the way back in January 2018, where price showed a beautiful trendline break and a huge crash in price. Overall the monthly time-frame was sitting at major value as well together with the weekly chart being in need of a reversal… Hedge For my newer followers or those that missed this post previously, here’s a generic trade plan explaining all those horizontal lines on my charts. Minor and minute waves are shown, but this method can be used on any time scale / Elliott Wave degree.

Highest Probability Trading Setups That Actually Work

The triangle is formed by a trendline that is moving towards horizontal support or resistance area. Many trading guides will tell you to buy the breakout over those resistance or support zones. When swing trading stocks it is essential to choose the right assets to trade, as bad market selection could be a major weakness in your trading strategy.

One of the reasons why swing trading is an effective yet less stressful trading strategy is that you have the time to eliminate as many unknowns as possible. You know how much you will likely make or lose within a given trade. You can identify your most opportune setup, market, and timing for futures trades. Use our free Optimus Flow trading platform to seek swing trading opportunities and plan your setups. Utilizing tools such as Volume Analysis, TPO Profile charts, Power Trades, and other unique indicators can help with the strategies described above. If price breaks below support, traders who entered “long” positions will often sell.

The downside to short-term trading is that the risk is much higher. Short-term trades are usually highly volatile, and this can lead to dramatic losses if you are not careful. We discovered many helpful training resources as we learned how to trade.

Combining a good entry setup and technique with good location, can give your strategy the best chance of generating winning trades for you. Are these high probability trading setups at these locations? The point to recognize with balances is that they are far more reliable in their action when they are based on a longer time frame.

Each of these patterns has a unique visual appearance, and when traded properly, they can provide for high probability trade signals. However, I recommend to buy at the trendline though and anticipate the move of the price before it happens. More often then not you will see fake breakouts over support or resistance areas where price comes right back down and reverses.

In Figure 1, the stock was moving in an uptrend for a the entire time, but some moments within that uptrend provide better trade opportunities than others. These involve understanding you strategy and plan, identifying opportunities to know your entry and exit targets, and knowing when to abandon a bad trade. Learn how swing trade scanner to capitalize on both sides of the market by taking advantage of bearish chart patterns that allow you to profit from declining stock prices. Like #5 on this list, this swing trade alerts service also comes from Motley Fool. Mindful Traderprovides members with swing trade alerts that have a track record of success.

The focus is typically put on maximizing the probability of each trade’s success in a vacuum. If you want to be a successful trader, consider checking out our free trading guide. Take 50% (or 75%) off and let the rest ride to low of day. The up-trend has been established and I can look for setups. When we look at the price continuation of this stock, we can see that the uptrend continued significantly. The price has been moving up several days with at least one higher low .

Trending stocks rarely move in a straight line, like Usain Bolt running the 100 meters. Instead, they usually move in a pattern that looks like a set of stairs. For example, a stock might go up for several days, then down for a few days after that, before rising again.

Swing Trading Strategy #3: Trade Against The Momentum

If you’re going to use indicators to identify overbought/oversold areas, then use that only. In the real world, your trading strategy should have anywhere between 2 – 4 confluence factors. You’re not going to enter a long trade just because Stochastic is oversold, or the market is in an uptrend. Support is an area where price may potentially trade higher from. In other words, it’s a “barrier” that prevents further price decline. A structure stop takes into account the structure of the market and set your stop loss accordingly.

  • Rayner I really improve my trading stragedy by watching your videos.Thanks a lot.
  • If you follow this simple rule, you can “predict” when a pullback will usually end.
  • Chart Patterns – Identify high probability chart setups.
  • We’re also a community of traders that support each other on our daily trading journey.
  • If the MACD line crosses above the signal line a bullish trend is indicated and you would consider entering a buy trade.

I was never able to sleep properly while loosing, always thinking about my open positions and where market might open tomorrow. This set of swing trading rules were first adopted and developed by the author of “The Master Swing Trader,” Alan Farley. The reason why we take profit here is quite easy to understand. We want to book the profits at the early sign the market is ready to roll over. The central moving average, which is a simple moving average.

You Might Not Want To Be A Swing Trader If:

In other words, you’re going to risk a smaller amount of your account balance for a potentially much bigger profit, compared to your risk. With the help of extensive technical analysis of stocks, the analysis of financial charts, trading strategies, and more. I hunt pips each day in the charts with price action technical analysis and indicators. My goal is to get as many pips as possible and help you understand how to use indicators and price action together successfully in your own trading. When price makes a swing higher you are looking to see if this old support level will act as a new role reversal and swing high resistance level. This is the level you will look for potential short trades.

high probability swing trading strategies

You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This strategy aims to enter trades after the pullback has ended and when the predominant trend is likely to continue. It is important to remember that every trading style has its pros and cons, and it is up to you the trader, which one you will choose. You are willing to take fewer trades but more careful to make sure your trades are very good setups. A breakdown strategy is the opposite of a breakout strategy.

What Is The Difference Between Swing Trading And Day Trading?

The trader must have the proper technical or fundamental tools for market forecasting, along with the right mental perspective when interacting in the financial markets. Both are important in achieving consistent trading results. In this lesson, we will discuss what high probability trading entails and how we can gain an edge from our market analysis. Reducing the size of your losses isn’t about having a super tight stop loss. It’s about setting reasonable risk levels that are proportional to your profit targets and sticking to the game plan.

Swing Trading Strategy #1: Buy Low, Sell High

These lower-cost stocks can provide many opportunities for quick profits, though, precisely because they do not have price stability or solid business fundamentals. Would you rather hold a stock for two years and make 20% or hold a stock for two days and make 20% profit? We do this every Over-the-Counter week, often making a 20% profit on a position overnight or over the weekend. This is the difference between a trader and an investor. We have found that stock trading has a steep learning curve to conquer, but it offers the most substantial potential income with the least amount of work.

This is an extremely popular strategy because of how often this pattern continues to repeat itself time and time again. First the shorter period 50 EMA crosses above the longer term 200 period EMA showing us there is a new trend higher. It can also offer you the chance to enter large reward trades. Forex Pops Provide Free MT4 indicators and tools for help all beginners. So, be careful and start gaining knowledge about swing strategies and it will be very easy for you.

SwingTradeMAX also differs from DayTradeMAX in another way. With swing trades that last a few weeks, we get the benefit of less noise in the charts, indicators and signals. The net result with less noise is that we’re able to clearly identify both entry points and exit points with SwingTradeMAX, whereas in DayTradeMAX the exit points are not so clear.

There’s no best trading strategy out there and it all depends on your trading style to see which approach resonates with you. This technique involves using a moving average indicator to trail your stops. Basically, you’re trading against the momentum (also known as counter-trend). Autotrading is a trading plan based on buy and sell orders that are automatically placed based on an underlying system or program. Once you know the entry and stop loss price, you cancalculate the position sizefor the trade. Before a trade is taken though, check to make sure the trade is worth taking.

If you’re more of a contrarian trader, then Strategy #3 might be more suitable for you to fade the move. So, if you’re the trader that likes to “go against the crowd”, then this trading strategy is for you. A sideways market or sideways drift occurs when the price of a security trades within a range without forming any distinct trends. Having the right conditions for entry and knowing your trade trigger isn’t enough to produce a good trade.

If you do not agree with any term or provision of our Terms and Conditions you should not use our Site, Services, Content or Information. Please be advised that your continued use of the Site, Services, Content, or Information provided shall indicate your consent and agreement to our Terms and Conditions. If you’ve been trading for a while, you’ve probably been introduced to the concept of ‘R.’ One ‘R’ is basically one unit of trading risk. So let’s analyze how we could reduce the size of our losses and expand our winners’ size. Consider that factors like the size of your average win or loss and your maximum drawdown are typically inversely affected by your win-rate.

Author: Maggie Fitzgerald


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