Complete Guide to Swing Trading
A Mega Thread 🧵
With Live Charts and Examples
Comment " Yes " and Retweet if You want PDF version
Criteria for Swing Trading :
Uptrend HH HL Structure
Stage 2 Uptrend
Volume Expansion during Breakout
Pullbacks with Lower Volume
Base Formation ( Rectangle , Vcp Etc)
Relative Strength > 0
21 ema > 50 ema > 200 ema
Stocks near 52 week High
Stocks near All time High
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What is HH HL Structure ?
1. A stock Maintains Bullish Momentum till it holds the last Swing . 2. Swings is an area from where stock reverses 3. As it is widely known Trend is your Friend A structure of Higher High is good for buying as overall momentum is in buying side
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A structure of Lower Highs is good for selling side , as each bounces will be sold off
Previous Swings will now act as Resistance in Downtrend and Support in Uptrend
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Enter Stage 2 Uptrend
Stage 2: The Ideal Buy Point for Traders Traders should look for bases within an existing Stage 2 uptrend and focus on breakouts on volume. Intermediate term traders can also use investor buy points 5/n
Traits in Stage 2 Breakout above the resistance zone & 30 week MA on big volume Post initial breakout, there is usually a retest of the breakout point 30 week MA starts turning up shortly after the breakout 6/n
Volume Expansion on breakout :
Volume Plays an important Role in Sucess of Breakout.
If Breakouts occur on Low Volumes its is likely to Fail , But breakdowns can happen on Low Volumes
Pic :Distribution to be looked at top of trend 8/n
Pullback with less volumes
Low volume pullbacks are often a sign of weak longs taking profit, but suggest that the long-term uptrend remains intact.
High volume pullbacks suggest that there could be a near-term reversal. 9/n
Price Volume Analysis 10/n
Base Formation
Basing refers to a consolidation in the price
Basing periods are accompanied by declining volume and there is an equilibrium between supply and demand.
It could be rectangle base , Cup and Handle Base or Volatilty contraction pattern 12/n
Relative Strength
Relative strength is a strategy used in momentum investing and in identifying value stocks.
It focuses on investing in stocks or other investments that have performed well relative to the market as a whole or to a relevant benchmark.
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Type
“Relative Strength”
Choose any
By bharattrader
By traderlion
By Modhelius
I use by bharattrader
In setting use 65 period for 3 months of Trading 14/n
0 line that helps to differentiate between underperformer and outperformer
>1 Outperforming the markets
<0 Underperforming the markets
When RS Goes above 2 its too much heated and generally goes into consolidation. 15/n
Select Stocks where RS Line is postive and continously outperforming
These stocks tend to outperform in strong and weak markets
So stick to selecting stocks that are outperforming where RS line is Postive
Read More on RS :
Role of emas
21>50>200 ema
Signifies Strong Uptrend
Moving Averages plot the Avg price which will help us identify the overall trend
These Avgs give Dynamic Support to price and hence price bounces off these emas 17/n
Whenever 21 ema is sloping upwards its called uptrend
Whenever 21 ema is sloping downwards its called dowtrend
Whenever 21 ema is sideways its called consolidation
Buy in uptrend
Sell in downtrend 18/n
52 WEEK high Stocks :
Stocks near 52 week high have a lot of demand
We basically want stocks that are in demand where prices keep going up
Buy High Sell Higher should be thinking in Swing trading
Screener : 52 week breakout Stocks chartink.com/screener/copy-…
20/n
SWING TRADING MENTORSHIP :
Don't waste This Dip to Buy Multibagger Stocks !✅Mentorship starting in mid March on weekends only .
✅Covering Stage Analysis ,Relative Strength,Moving Average and How to find Super Stocks and more ...
A Thread on Risk Management and Art of Position Sizing 🧵
⏺️A part of Risk Management that could make or
break your trading career
⏺️Position sizing refers to the number of units an
investor or trader invests in a particular security.
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Determining appropriate position sizing requires
an investor to consider their risk tolerance and
the size of the account.
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POSITION SIZING :
In simple Language how much Percentage of your Portfolio you should invest in a particular Script .
This is very important factor that changes your returns drastically .
There are rules to be followed
Either Fix Risk per Trade
Or Capital Allocation
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How to use Top Down Approach for Stock Selection ?
Concept : Relative Strength
Weak Vs Strong Sectoral Analysis
Weak Vs Strong Stock Analysis
A thread 🧵
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Step 1 : Choose the Strongest Sector
Use The concept of Relative Strength to identify Strong Sector .
Example Comparing Auto Vs Nifty
Here we can See the 65 RS line is Positive and Increasing meaning A outperformance of AUTO index 2/n
How to use HEIKINASHI CANDLESTICK Charts ?
Trading Strategy and Its Rules
A thread 🧵
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What is Heikin Ashi? 1. Heikin-Ashi, also called Heiken-Ashi, is translated as an "average bar" in Japanese. 2. The Heikin Ashi strategy is a useful tool used in identifying market trends and
predicting the future prices of assets.
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3. The Heikin Ashi can be used alone or in conjunction with candlestick charts. 4. These charts can be very useful as they make it easier to read candlestick charts
and analyze market trends , without noise 3/n
About Darvas :
In the late 1950s, Nicolas Darvas was one half of the highest paid dance team in show business.
Darvas turned a $36,000 investment into more than $2.25 million in a three-year period.
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It was on a two-year tour of the world that he initially developed his ‘Darvas Box’ method of screening stocks – a method of picking stocks based on the stock’s price and volume .
1. Avoid Stocks Below 200 ema 2. Sell Stocks in Stage 4 Down Trend 3. Dont Trade Stocks that are moving in Circuits 4. Avoid News based Trading
A thread With examples
Retweet to Educate
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A Study Shows that 90% of the winning Stocks stay above 200 ema before a big Advancing Phase
1. Simply Not Holding or Buying Stocks below 200 ema Saves a lot of time and Money. 2. You can looses opportunity Cost if you buy stocks below 200 ema. 3. TimeFrame: Daily 200 ema
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B. Sell Stocks in Stage 4 Down Trend
1. Stocks Exhibiting this are in complete Bear Grip 2. The 30 week ema acts as reference for stage analysis 3. These Stocks can be short sold on pullback to 30wema 4. Happens after Topping Phase 5. TimeFrame : Weekly , 30 Week Ema
What is Breakout ?
A breakout is a stock price moving outside a defined support or resistance level with increased volume.
Always trade breakouts in uptrend for high win ratios
Retweet and Share :) 1/n Source : Google
What to Look before entering a breakout ?
Look for Volume Spikes on Up days and Down Volume on down days.
Simply Volume Should Dry during Pullbacks
This is a sign of Accumulation by Bigger Sharks.
As they buy in huge quantities they have to buy in parts to avoid price spikes 2/n
They dont only buy on Uptrend but continue holding during pullbacks for bigger gains .
Important thing is pullbacks should always have less volumes . 3/n