Dominant Moving Average Strategy For Swing Trading (Part 2)

Step-by-Step Swing Trading Strategy Tutorial

1. Determine Your Swing Trading Zone:

• Identify a 3 to 5 bar move in the trading time zone for your swing trade.
• The sweet spot for a swing play is a 3 to 5 bar move.

2. Implement a Trailing Stop Method:

• Use a trailing stop method to manage your trades effectively.
• Adjust your stop loss under each bar as the trade progresses.

3. Maximize Profits with Proper Stop Adjustment:

• Have a proper swing stop adjustment program in place.
• Take partial profits and trail out of the rest to maximize gains.

4. Focus on 3 to 5 Bar Pop:

• Look for a 3 to 5 bar pop in the duration of your chosen time frame.
• The odds of a successful trade increase after 3 to 5 bars of consecutive movement.

5. Recognize Market Conditions:

• Monitor moving averages on different time frames (hourly, four-hour, daily).
• Look for a macro narrow state where all three moving averages are relatively flat and close together.

6. Identify Trading Opportunities:

• Watch for the first pullback after a stock emerges from a macro narrow state.
• Look for a color change play above the 20-period moving average as a potential entry point.

7. Utilize the 20 MA Halt Strategy:

• Pay attention to the 20-period moving average halt as a signal for enduring runs.
• Wait for a color change play after the 20 MA halt for confirmation.

8. Manage Overbought Zones:

• Measure the distance a stock peaks above the 20-period moving average as a guide for overbought conditions.
• Use the overbought zone and pullback zone in conjunction to make informed trading decisions.

9. Distinguish Between Swing Trading Styles:

• Differentiate between the 3 to 5 bar swing play and the power trend swing play.
• Understand which type of swing play suits the current market conditions to optimize your trading strategy.

10. Apply the Right Approach:

• Choose the appropriate swing trading approach based on the type of trade setup.
• Avoid using the wrong strategy that could potentially lead to missed opportunities or losses.

By following these steps and incorporating the strategies outlined in the video, you can enhance your swing trading skills and make more informed trading decisions. Remember to adapt these techniques to your own trading style and risk tolerance for optimal results.