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Trade the Chart
Trade
the Trend
Position Sizing
Trade Exits
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Because stock
trading is not
a game
There are several fundamental ways to trade stocks, such
as trade the quick pullbacks after sudden large movements in
the stock price, trade breakouts, and trade the trend. Trading
the
trend comes in two flavors, trading longer term trends and trading
shorter term trends. The latter is also known as Swing Trading.
In
the following pages I will explain in simple terms how to do Swing
Trading, and I will highlight what to look for, such as:
- Trade the short term trend
- Short term trend can be quickly seen by using
the 30 day linear regression line
- Look for long entries when the short term trend
is up, ignore shorting opportunities
- Look for shorting opportunities when the short
term trend is down, ignore long opportunities
- Look
for stocks that had recent deep swings up and down
- In
neutral trends, stochastics give good signals for overbought and
oversold
- In
uptrends, stochastics give good signals for overbought, but cannot be
used for oversold signals.
- In
downtrends, stochastics give good signals for oversold, but cannot be
used for overbought signals.
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