High Probability Swing Trading Strategies Pdf – There is a rule that the market always follows. No matter how strong the uptrend or downtrend is, the price will always fluctuate. For example; if the price is in a strong uptrend, the price will still make smaller fluctuations before continuing with the trend.
As a swing trader, you can take advantage of these swings by making entries in the best zones and taking advantage of the next swing in the market.
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In this post, we’ll look at exactly what swing trading is and how you can use it to find profitable trades.
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When you swing trade, you want to take advantage of the next swing higher or lower in the market.
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Although many swing traders will use larger time frames like the 4 hour time frame and more, you don’t need to use larger time frames to be a swing trader.
Although a trending market is much more conducive to swing trading, you can still use a range to trade highs and lows.
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As a swing trader, your goal is to find profitable trades and ride the next swing or wave in the market.
See an example chart below. The price is in a clear upward trend. You don’t want to enter the top of the trend, so wait for the price to drop, where you can then enter a long trade.
Unlike scalping or breakout trading, you will have to be more patient and will not have as many trading opportunities.
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These trades will often be with the trend. Since the trend can sometimes continue to run for long periods of time, you can take swing trades that are in your favor for long periods, giving you profitable trades with very high risk.
Swing trading can also be done on many different time frames and as long as the Forex market or pairs are liquid then it is suitable for swing trading.
At its simplest, you are looking to trade from a swing point and ride the wave up or down to make a profit.
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For an example, see the diagram below. The price is in a lower trend. As a swing trader, you look for a price that swings high in this trend to give you a chance to take a short trade.
When the price goes up, you can enter that short trade and start going back down.
While there are many different methods and strategies for doing both, the simplest is to use a moving average crossover.
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Using a moving average crossover like the 50 EMA and 200 EMA crossover will show you when the trend started and also how strong the trend is.
You can also use the 200 EMA (exponential moving average) as a dynamic support or resistance level to find swing highs and lows.
First, the shorter period 50 EMA crosses the longer period 200 EMA, showing us that there is a new higher trend.
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Using the 200 EMA, we can then look for times when the price turns lower to test the longer-term moving average and swing low to go long-term with this uptrend.
The other simple swing trading strategy, which does not include indicators and uses only raw price action, looks for swing highs or lows at key support and resistance levels.
This is an extremely popular strategy because of how often this pattern repeats itself over and over again.
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First you see that the price is in a lower trend and has found a support level. You then see prices move down and break above that level.
When the price rises, see if this old support level will act as a new role reversal and change a high resistance level. This is the level at which you will look for potential short trades.
Swing trading is not suitable for all traders and certainly won’t be mastered in a weekend of backtesting.
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This strategy will require a lot more work than using indicators or a more automated strategy.
That being said, if you want to trade for longer time frames, find high probability trades and make trades that have a chance of very high rewards, then swing trading is for you.
If you want to start testing swing trading strategies, then the best thing to do is to download some free demo trading charts and test different methods, markets and time frames to see what works best for you.
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Pip Hunter I hunt for pips every day in charts with technical analysis and price action indicators. My goal is to get as many pips as possible and help you understand how to successfully use indicators and price action together in your own trading. Twenty-four chart patterns have been discussed in this post. Retail traders widely use chart patterns to predict prices using technical analysis.
In this article, you will get a brief description of each chart model. You can also learn the chart patterns with the trading strategy by clicking the Learn More button. At the end of the article, you will get a PDF download link with sample charts for backtesting purposes.
Chart patterns are natural price patterns that resemble the shape of natural objects, such as triangle patterns, wedge patterns, etc. These patterns repeat over time due to natural phenomena. Traders use these repeating patterns to forecast the market.
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Chart patterns are made up of price waves or candlestick chart variations, such as head and shoulder, double and triple patterns.
These two patterns are classified into many chart patterns based on market shape and structure.
There are several repeating charts in technical analysis, but I will only explain the first 24 charts here. These models have a high probability of winning.
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A double top is a bearish chart reversal pattern that indicates the formation of two price peaks at a resistance level. After the breakout of the neckline, a downtrend occurs.
The neckline is outlined using the last sweep down after two peaks. The previous trend to the double top pattern must be up and must form at the end of the uptrend.
A double bottom is a bullish reversal chart pattern that indicates the formation of two consecutive bottoms in a support zone. After the breakout of the neckline, there is a bullish trend reversal.
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The neckline is emerging on the last price swing after two price declines in this pattern. The previous trend to the double bottom pattern must be bearish and it must form at the end of the bearish trend.
Tripa top is a bearish chart reversal pattern where the price forms three consecutive peaks at the same resistance level. It is the most basic chart pattern and is widely used by traders in technical analysis.
The neckline is formed after connecting the last two bottoms with a trend line in this pattern. The break of the trend line confirms the triple top pattern.
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A triple bottom is a bullish reversal chart pattern where the price forms three consecutive bottoms at the same support level.
The neckline is formed in the triple bottom pattern after connecting the last two swing highs with a trend line. A break of this trendline confirms a bearish reversal.
The head and shoulder is a reversal chart pattern that consists of three price swings. The largest price swing is called the head, and the other two waves to the left and right of the head are called shoulders. That’s why it’s called a head and shoulders pattern.
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This is a recurring pattern on the chart and after its formation, a bearish trend reversal occurs in the market.
A head and shoulder reversal pattern is the opposite of this pattern and is a bullish trend reversal pattern.
A cup and handle is a continuation chart pattern where the price forms a round bottom with a handle shape at the end of the pattern.
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This chart pattern can also act as a trend reversal pattern. It depends on the location whether it forms during an uptrend or starts at the end of a bearish trend.
It is best to note that there is a clear difference between a V-shaped wave and a round-bottomed wave. A rounded bottom is rarely formed on the price chart. That’s why you need to properly test this model.
This is a reversal chart pattern that shows three consecutive attempts by large traders to break through or approach a certain key level. Then there is a market trend reversal.
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The 3-unit chart pattern consists of three impulse waves and two pullback waves. The number three is also a Fibonacci number and has great significance in trading. Therefore, the three-unit model is also a natural phenomenon.
The pennant is an ABCDE pattern on a five wave continuation chart. It shows the continuation of the trend after a small break in the trend.
This chart pattern consists of two impulse waves and three pullback waves. During the pullback, the market consolidates inward, indicating indecision in the market. After indecision, when the price breaks the trend,