sale animal vb منتديات حيوانات للبيع

forex thread 2012 best trading with

Saturday, February 4, 2012

How Do You Identify Stocks that are Appropriate for Swing Trading?

All of the methods that are used to identify stocks that are appropriate for swing
trading are based on technical analysis. Technical analysis is a way of using
historical price/volume patterns to predict future behavior. It is not necessary to
have a detailed understanding of technical analysis in order to swing trade.
There are tools available that can assist investors at every level – from novice to
expert. While there are many sources of information and tools that help identify
swing trading opportunities, this book will focus on those provided at Once you understand the principles, you can explore other
sources of information.
What Tools are Available?

• Subscriptions services that provide daily swing trading recommendations – offers a service called MasterSwings. Larry Swing uses
technical analysis and pattern recognition software (SwingTracker) to
identify candidates for swing trading. Every evening, subscribers receive emails
that identify several different types of patterns that are conducive to
swing trading. Aside from showing you the pattern, the email indicates the
current price, the entry price, the target (limit) price for taking profit, and the
stop loss price for limiting downside risk. This service can be used by
investors at all knowledge levels.
An example of a MasterSwings email alert for Lockheed Martin (LMT) is
shown on the next page. A candlestick chart shows the recent price action for
LMT, and a table indicates the closing price and all three action prices – the
price to buy (using a buy stop order), the target price which is 7% above the
purchase price (using a buy limit order), and the protective stop price which
is approximately 4% below the purchase price (using a sell stop order). The
20- and 50-day moving averages (MA) are also shown so that you can more
easily visualize the direction of the trend.
The rational behind these prices are discussed in the section entitled The
Master Plan.

Introduction to Swing Trading

To make money in the stock market it is necessary to have a disciplined approach to
trading. We also believe that it is also important to keep things simple. While our
goal is to keep things simple, the trading rules might initially seem a bit complex.
However, once you learn the rules and you trade with discipline, you will make
money in the stock market.
Swing trading allows you to make money when the market is bullish, or bearish, or
just going sideways. That is why it has a distinct advantage over other approaches
to investing. The goal is to make money, not to rest one’s hopes on the future of a
stock, a sector, or the economy.
4.1 What is Swing Trading
Everyone is familiar with waves. A wave alternates from positive to negative, then
to positive and negative, and so on. Waves are found in nature – you see waves
when you throw a rock into a lake. Sound is transmitted in waves. And when stock
prices change, they follow a wave-like pattern. The wave is rarely as orderly a sine
wave, but they are waves nevertheless, and we use these waves in Swing Trading.
4.2 Let’s Look at an Up Trends
The chart below shows the price movement of Myriad Genetics (MYGN) in an
uptrend. Notice that after the price moves up, it takes a rest, or pulls back. When
we swing trade an uptrend, we buy on the pull-back.
An uptrend can be identified by a series of higher highs and higher lows (the bottom
of each pull-back). In other words, an uptrend is a series of successive rallies with
each rally going higher than the previous one and each pull-back stopping above the
previous one.
The price movement looks more like the zig-zag of a saw blade than a sinusoid, but
once an uptrend is established the pattern tends to repeat itself. In swing trading
we capitalize on the predictability of the pattern. We buy during the pull-back to
increase our chances of making a profit.

The Steps in Swing Trading
First, restrict your selection to the universe of stocks that fulfill certain criteria.
Choose stocks that …
• Have a price of at least $7
• Have an average daily volume of at least 500,000 shares
Then …
STEP 1 – Identify a stock that is in an uptrend or a downtrend.
STEP 2 – For stocks in an uptrend, identify those that are experiencing a pull-back.
For stocks in a downtrend, identify those that are experiencing a pull-up.
STEP 3 – Once an appropriate candidate is identified, place a limit order to buy
(uptrend) or sell short (downtrend) the stock based on the Master Plan.
STEP 4 – Once a stock has been traded (a position opened), place a stop-loss order
to limit downside risk and place a limit order to identify the price at which
you will take profits. (Ideally, these two orders are placed together as an

OCO (One Cancels Other) order; this is sometimes called an OCA (One
Cancels All) order.
STEP 5 – At the end of each day, adjust the stop loss prices based on the Master
4.5 What Can You Expect?
First – only a portion of your trades will be executed. The Master Plan is designed
to only trade stocks that initially move in the anticipated direction. If the
price moves in the opposite direction (continues pulling back or pulling
up), the trade is not placed.
Second – you will be holding positions for a limited amount of time. While swing
trading is not day trading, you are only holding positions until targets are
Third – some of your trades will result in losses, however losses are minimized by
the Master Plan which raises the stops as the stock price rises; this is
known as trailing stops. Being disciplined, and following the Master
Plan will insure that profits exceed losses which means you will make