Isolating Longer-Term Swing Trades In The Stock Market

Swing trading is about taking trades that align with a solid strategy and that have a good risk/reward ratio, but swing trading is also about perspective. You can zoom out on a chart and a get a much different perspective, just as you gain a different perspective by zooming in.

By changing our perspective, we open ourselves up to more trades, and to seeing opportunities that we may not have seen otherwise. For example, many of the strategies I use can be applied to long-term trades as well as short-term trades.

On our Facebook page I recently wrote:

The Stock Market Swing Trading Video Course can be used to isolate potential trades both in the short-term and the long-term. For example, I used the reversal strategy to load up on gold stocks at the end of 2016, right as it was bottoming from a correction.

This was a long-term pattern, but these longer-term patterns can be extremely useful for isolating potential trades. Look a multi-year chart of GLD (gold ETF). It broke out of its downtrend in early 2016, signaling the trend was now up. The reversal strategy dictates that we then wait for a pullback into the specified percentage area and then wait for a specific price pattern to form. We had one false start around the 60% area, but the next buy signal near the 75% level has resulted in a strong move to the upside…getting us in right near the bottom of the correction. That signal in gold could have been used to isolate a whole bunch of trades in the gold mining stocks have rallied substantially since that buy point.

Just another way to utilize one of the strategies covered in the course.

Let’s look at this big up-move and correction in the gold ETF (GLD). If you view that big rally as one move up, then a correction lower is a buying opportunity as it pulled back into our designated retracement area and formed the correct price pattern to trigger a long trade.

This is a long-term pattern, which means it could take many months for the price to reach a profit target based on this type of long-term pattern. But it highlights the flexibility of the strategy, which can even be used to make investment trades, not just swing trades.

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Disclosure: This article should not be viewed as investment advice, and is not a recommendation for you to buy or sell. These are trade examples of a specific strategy. Past performance is not necessarily indicative of future performance. Unless expressly stated, I don’t have positions in the stocks mentioned..they are just examples for educational purposes.

Losing trades WILL happen. Don’t risk more than 1% of your trading account on a trade (risk = difference between entry price and stop loss price, multiplied by the number of shares). There is always a risk in trading, and you can lose much more than you expect (even when you think you are only risking 1%). Don’t risk real capital unless you know what you are doing and have proven yourself profitable in a demo account.

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