Swing trading can be a great way to profit from market upswings and
downswings, but it’s not easy. Mastering the swing- trading techniques
takes time and effort.
Rule
1: If you have to look, it isn’t there.
Forget your college degree and trust your instincts. The best trades
jump out of nowhere and create a sense of urgency. Take a deep breath,
then act quickly before the opportunity disappears.
Rule
2: Trends depend on their time frame.
Make sure your trade fits the clock. Price movement aligns to specific
time cycles.Success depends on trading the right ones.
Rule
3: Price has memory.
What happened the last time a stock hit a certain level? Chances are
it will happen again. Watch trades closely when price returns to a battleground.
The prior action can predict the future.
Rule
4: Profit and discomfort stand side by side.
Find the setup that scares you the most. That’s the one you need to
trade. Don’t expect it to feel good until you take your profit. If it
did, everyone else would be trading it. Wisdom from the East: What at
first brings pleasure in the end gives only pain, but what at first
causes pain ends up in great pleasure.
Rule
5: Stand apart from the crowd at all times.
Trade ahead, behind or contrary to the crowd. Be the first in and out
of the profit door. Your job is to take their money before they take
yours. Be ready to pounce on ill-advised decisions, poor judgment and
bad timing. Your success depends on the
misfortune of others.
Rule
6: Buy the first pullback from a new high. Sell the first pullback from
a new low.
Trends often test the last support/resistance before taking off. Trade
with the crowd that missed the boat the first time around.
Rule
7: Buy at support. Sell at resistance.
Trend has only two choices upon reaching a barrier: Continue forward
or reverse. Get it right and start counting your money.
Rule
8: Short rallies, not selloffs.
Shorts profit when markets drop, so they start to cover. This makes
it a terrible time to enter new short sales. Wait until they get squeezed
and shaken out, then jump in while no one is watching.
Rule
9: Manage time as efficiently as price.
Time is money in the markets. Profit relates to the amount of time set
aside for analysis. Know your holding period for every trade. And watch
the clock to become a market survivor.
Rule
10: Avoid the open.
They see you coming, sucker.
