Swing trading strategy suitable for those who trade several times a week on 4H or Daily charts.
Basic strategy for swing traders
1. Tools
Chart: 4H or Daily (H4 / D1)
Indicators:
50 EMA (exponential moving average) — for trend
RSI (14) — for assessing overbought/oversold conditions
Price Action — support/resistance levels, candlestick patterns
2. Conditions for entering a buy (long):
1. Price above 50 EMA (uptrend)
2. RSI bounced from 30–40 (not overbought)
3. Price retraced to support (or 50 EMA)
4. A reversal pattern formed (e.g.: 'pin bar', 'engulfing')
Example:
Price rises, then corrects to 50 EMA → RSI ≈ 40 → bullish pin bar appears → enter long
3. Conditions for entering a sell (short):
1. Price below 50 EMA (downtrend)
2. RSI bounced from 60–70
3. Price retraced to resistance (or 50 EMA from above)
4. A bearish candlestick signal appeared (pin bar, reversal, inside bar)
4. Target (Take Profit):
Nearest resistance/support level
Or fixed target: 2:1 or 3:1 to risk
5. Stop-loss:
Beyond the local extreme (candle's low/high)
Or 1 ATR (average daily range)
Example of a deal on the chart:
Scenario:
Tesla stock price on D1 above 50 EMA
RSI around 40
Price bounces off the support level
Bullish engulfing pattern is forming
➡ Entry: on the breakout of the candle's high
➡ Stop: below the low
➡ Target: nearest resistance level or fixed Risk/Reward
Useful tips for swing traders
Check the news before entering (reports, economic events)
Keep a trading journal: write down entry, reason, result
Don't overload with indicators — 2–3 at most
Focus on quality, not quantity of trades