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
www.mrswing.com. Once you understand the principles, you can explore other
sources of information.
What Tools are Available?
• Subscriptions services that provide daily swing trading recommendations –
www.mrswing.com 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.
No comments:
Post a Comment