#SwingTradingStrategy Core Elements of a Swing Trading Strategy
1. Market Selection
Stocks with good volatility and liquidity (e.g., mid/large-cap).
ETFs, Forex, or Crypto can also be used if they meet technical criteria.
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đ Step-by-Step Swing Trading Strategy
A. Trend Identification
Use moving averages to find trending markets:
50 EMA and 200 EMA:
Bullish: 50 EMA above 200 EMA
Bearish: 50 EMA below 200 EMA
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B. Entry Setup: Pullback to Support/Resistance
Use a combination of the following indicators:
Price action near trendline/support
Fibonacci Retracement (38.2%, 50%, 61.8%)
Candlestick patterns: Bullish engulfing, hammer, etc.
Indicators:
RSI (30-70): Enter near 30 in an uptrend or near 70 in a downtrend
MACD crossover confirmation
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C. Entry Trigger
Break above previous swing high (in uptrend)
Bullish candle close above resistance
Volume confirmation helps
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D. Stop Loss Placement
Below recent swing low (for long trades)
Use ATR (Average True Range) for buffer (e.g., 1.5 Ă ATR)
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E. Target/Exit Strategy
Risk-Reward Ratio: At least 1:2
Use previous resistance/support as target
Optionally, trail stop with moving average (e.g., 20 EMA)
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F. Position Sizing
Risk no more than 1â2% of total capital per trade
Calculate lot size based on stop-loss distance
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đ Example Swing Trade (Bullish)
1. Stock is trending up (50 EMA > 200 EMA)
2. Price pulls back to 50 EMA + 50% Fibonacci
3. RSI dips to 40, MACD shows bullish crossover
4. Bullish engulfing candle forms on support
5. Entry above high of bullish candle
6. Stop-loss below recent swing low
7. Target 2x risk at next resistance level
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đ Recommended Tools
Charting Platforms: TradingView, ThinkorSwim, MetaTrader
Screeners: Finviz, TradingView, TrendSpider
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â ď¸ Tips for Swing Traders
Avoid trading around earnings or major news events.
Maintain a trading journal.
Stick to your plan: entry, stop, target.
Review trades weekly.