How I became a Consistently Profitable Trader! Swing traders try to capture the short-term trend as price moves from a swing low to the next swing high or from a swing high to the next swing low. Their trades tend to last from a few days to a couple of weeks. They make use of the four-hour and daily timeframes but, occasionally, come down to the hourly timeframe to pick better entry price after spotting their setup in the usual timeframes. Here I will share with you some of the proven technical strategies that swing traders use to trade the market. Some of these strategies have ‘funny’ names as different traders prefer different names. Strategy used by Legendary Traders Spring and Upthrust This strategy is also called “stuck in a box”. It is used to swing-trade the range market — price moving between established support and resistance. The first thing is to identify a range market and mark the support and resistance zones.

For upthrust:

1. Price breaks out above the resistance
2. Gets strongly rejected and closes below the resistance.
3. Go short with a market order immediately.
4. Place stop loss about 1 ATR above that swing high and profit target before the support.
5. Manage according to your style.

For spring:

1. Price breaks down below the support
2. Gets strongly rejected and closes above the support.
3. Go long with a market order immediately.
4. Place stop loss about 1 ATR below that swing low and profit target before the resistance.
5. Manage the trade accordingly.

Catch the wave

This is also called buying the dip in an uptrend and selling the rally in a downtrend. Here you try to catch the impulse wave in a trending market — just like catching the ocean waves in surfing. So the idea is to wait for the corrective wave to exhaust and jump in with the next impulse wave in the trend direction. This doesn’t work all the time though; there are certain factors you can use to identify the high probability setups. For example, a deeper pullback up to 50 to 76 percent Fibonacci, a support or resistance level, a trendline, or a moving average (50-period moving average) will increase the odds of success for the trade.

Now, see how you can catch the impulse waves in a trend:

1. Identify a trend and have your trendline and moving average as usual
2. Wait for a pullback to start and fix your Fibonacci retracement tool on the preceding price swing.
3. When the pullback gets to the 50% Fibonacci and beyond, the moving average, or the trendline, watch out for signs of price rejection and reversal — reversal candle patterns such as hammer, shooting star, engulfing etc.
4. Once price reverses to the trend direction, enter with a market order.
5. Set your stop loss 1 ATR beyond the current swing low/high — as the case may be — and take profits just before the preceding swing high/low.
6. Manage the trade accordingly.

Fade the move

This is a countertrend trading. It is meant for the contrarians — those that love going against the crowd. The trades do work on several occasions if you can identify high probability setups. What factors can create high probability setups for this type of move? You are absolutely correct if you answered... strong resistance and support levels.

This is how you trade it:

1. Identify a big price move to a strong resistance or support zone which takes out the previous high/low as the case may be.
2. Watch for a strong price rejection and reversal.
3. Enter with the next candle and set your stop loss 1 ATR beyond the high/low.
4. Place your take profit before the nearest swing low/high.
5. Manage accordingly.

Swing trade management strategies

Managing your ongoing trades is as important as identifying profitable trade setups. Here’re the two main approaches to managing your trades.

Passive trade management

This is a hands-off strategy; you’ll let the market hit either your stop loss or profit target. You should have a good risk-to-reward ratio (2 or more). It is recommended for the less experienced trader. Though it offers more relaxed trading, you may see a profitable trade turn to full loss.

Active trade management

Here, you actively monitor the trade to see how it’s progressing and decide whether to exit the trade or still keep the trade and trail the profits. Monitor the trade on your entry timeframe (or higher and never lower). There are several strategies for trailing profits such as

• ATR trailing stop indicator
• Preceding candle high/low
• Moving average

Conclusion

Swing trading can be very profitable if you have good strategies. If you learn these ones, you will do well swing-trading.