Sunday, October 04, 2009

Passing the Plate: Swing Trading With the Trend

A while back, in my "passing the plate" post, I requested trading ideas from readers. So far, I've passed along ideas regarding overbought and oversold markets and also shared some of my own market indicators, including intraday new highs/lows; volume distributions to identify trending markets; short-term transition patterns; and non-confirmations in NYSE TICK.

This week I will be featuring reader submissions. Here is a post from Lionel, who trades out of Malaysia. He works full time and so trades on a swing time frame, rather than intraday. His rules follow a trend following logic, using pullbacks to enter on the long side. He gauges risk/reward for each trade and trades with defined profit targets. In his post, he illustrates a trade in WMB that followed his rules.

From a psychological vantage point, Lionel is accomplishing several things:

1) He has found a trading style to fit his lifestyle;

2) He has distilled his trading to explicit rules, which helps him maintain discipline;

3) He has focused on exits as well as entries, with an eye toward minimizing losers and maximizing winners.

As traders lengthen their time frame, they have time to research markets and stocks and apply rules to their trading. For some, this makes greatest use of their strengths, while avoiding impulsive trades without an edge. Thanks to Lionel for passing his ideas along.


sandp emini said...

One of the things that you emphasize is on average volume for a given period. (In your case you track for 30 minutes). I found out that we can track it in MarketDelta using session statistics Indicator. (Please view the video on marketdelta website for setup.) It is very helpful.

Thank you as always for your sharing.

Swing2Freedom said...

Hi Brett Steenbarger,

Thanks for the kind and encouraging words :)