Trading Equities Basic Strategy, Input Appreciated

Discussion in 'Strategy Development' started by SusanaDT, May 24, 2008.

  1. Swing trading Equities - Basic strategy

    Determine the trend of the market by analyzing SP500, Nasdaq, Dow daily and/or 240 min charts.

    If the market trend is down (Lower Lows - Lower Highs)

    - Determine the weakest sectors of the market
    - Determine the weakest stocks on the sector
    - Short on retracements, downtrend lines, areas of resistance
    - Cover on lower lows
    - Reapply as conditions remain intact

    If the market trend is up (Higher Lows - Higher Highs)

    - Determine the strongest sectors of the market
    - Determine the strongest stocks on the sector
    - Long on retracements, uptrend lines, areas of support
    - Sell at higher highs
    - Reapply as conditions remain intact

    If the market trend is sideways, stay put.

    I would appreciate any comments and constructive criticism on this swing trading strategy and any possible addendum's you could think of to improve it, particularly from experienced swing traders.

    Thank you for reading,
  2. C- kid

    C- kid

    no your approach is wrong

    not that it can't work, but it takes too long you would not even be able to quit your job trading

    so are you rich yet, if you are then go ahead make 20% a year

    but I bet you ain't, in which case, you need to learn to trade single price chart. you need to learn to trade short term you need to learn to trade a price chart be it price of EGGS or tomato

    and all this without any market outside crap

    if you want more PM and be nice
  3. sg20


    For stocks, swing trading usually doesn't coincide with the market cycle although some are; it's the individual stock's cycle. You can find swing patterns by looking at the charts; the ideal patterns can move in an upward, downward or side ways, typically in a channel like pattern. When you see a compressed or expanded pattern then you have a flag pattern, they and can also be traded as well, a little tricky but can be highly rewarding. From what you describe as trends with higher highs and lower lows may be considered trend trading although it also considered swing if it move in a wider ranges. Hope that doesn’t confuse you too much.