#SwingTradingStrategy

Buy on the dip, sell at the top: Easier said than done!

Buy on the dip and sell at the top – sounds so simple, right?

But determining which dip is actually the last one or when the top has been reached is far from easy.

Even experienced traders often get it wrong. There are simply too many factors influencing price movements.

That’s why risk management is strategic.

It's better to secure smaller, consistent profits because it's hard to completely avoid losses than to risk everything by waiting too long and potentially losing it all.

My primary swing trading strategy revolves around identifying strong trends and taking advantage of pullbacks. I prefer assets that show clear upward or downward momentum on daily or 4-hour charts.

My “favorite” strategy involves a combination of technical indicators, primarily moving averages (MA) and the relative strength index (RSI).

For entries, I wait for a price dip towards a key moving average, typically the 20- or 50-period EMA, within an established trend. Then I look for reversal candlestick patterns (e.g., hammer, bullish engulfing) that confirm the end of the dip and the resumption of the trend.

Confirmation from the RSI is also crucial, ensuring that at the entry point, it is neither overbought nor oversold.

Exiting the trade is just as disciplined.

My profit target is usually set at the previous level of resistance or support, or at a specific risk-to-reward ratio (e.g., 1:2).

I also use stop-loss to protect profits when the trade moves in my favor, and I consider early exits if significant bearish/bullish divergence appears on the RSI, signaling a potential trend reversal.

This methodical approach helps me capitalize on short- to medium-term price movements while effectively managing risks.