Using Pivot Days In Swing Trading. How To Locate The Best Swing Trading Setups In this article I am going talk about tactics using Pivot High and Pivot Low days in Swing Trading and give to give strategies a basic strategy that you can begin using right away that keys points of pivot days. Active traders are always on the lookout for new stock trading strategies and stock trading tools to help them increase their edge. First, lets talk about what works and what doesn't work in Swing Trading. We pretty much know what doesn't work in swing trading. For instance, trying to play "earnings roulette" where you bet on how a stock is going to react to an earnings release, or trying to trade off of breaking news, both pivot losing propositions over time and give you the same odds as a trip to Vegas. Also, when you are doing shorter term swing trading, the longer term fundamentals don't really don't play a key roll in how a trade will follow through, so a heavy reliance on fundamental stock research is usually a waste of time in swing trading. So everything I am going to be discussing in this article will be based on the daily stock chart and the short term swing cycle. The Basic Concept In Swing Trading. A basic concept of Swing Trading is that we locate, either through the review of lots of stock charts, or the use of various types of stock scans, high momentum stocks that are currently in a strong uptrend. Once we build a watchlist of strong stocks that are trading higher, we wait for them to pullback. Identifying the proper time to enter the stock on a pullback is the key to this type of Swing Trade Setup. We want to get into a stock just before the trend strategies. If we take a trade in a stock, and the trend does not resume as expected, we have a stoploss in place to take us out of the trade. Hanging on to losing trades is a major way to reduce your success rate in swing trading. Swing Trading is a process over time. In other words, you will be taking many trade over the course of your career as a trader. There are 3 things we must focus on to be profitable swing traders. If you use proper initial stop loss placement, and understand how to pick good price targets for you swing trading exits, and allow your winners to run, you should be able to end points with bigger winning trades versus losing trades. And finally, always using a stop loss on your trades will help guarantee that you never find yourself taking a catastrophic loss on any individual trade. It only takes one major loser to wipe out all of your hard earned swing trading gains and run your trading account into the ground. What Is A Pivot Day? Pivot Days, not to be confused with Day Trader Pivots are daily price bars that stick out from the crowd. Over the years Pivot Days have been identified by different names. For instance, early on, Henry Wheeler Chase and then later, the famous commodity trader Larry Williams referred to Pivot Days as "Ringed Highs" and "Ringed Lows" due to the fact that in the days trading computers when people still graphed charts out by hand or received printed charts from a service, they simply circled or ringed the highs and lows of the pivot days with a pencil. Other names used by technical traders are, Swing Highs and Swing Lows, Reversal High and Reversal Low, Fractal High and Low and finally Buying Climaxes and Selling Climaxes as many times there is a noticeable spike in volume seen on Pivot Days. An official pivot low has four HIGHER lows just before and four higher lows just after, making the pivot day itself look like a spike protruding down. An official pivot high day is just the opposite. We look for four lower highs just before the pivot day and four lower highs just after. The Pivot High day should resemble a small antenna projecting up above the surrounding days. First of all, it is one pattern that is universal trading any time frame, and you will notice that it repeats itself over and over with great frequency. One out of every ten-fifteen price bars will become a pivot bar. As we progress forward in this article examining an actual Pivot Day setup strategy, you will see that Pivots are a consistent and accurate means of finding great trades and are excellent visual reference points on your charts to work with. We will break the strategy down into sections A-B-C and take a look at several examples. What Is A Pivot High? We look for a stock that is experiencing a strong price trend to the upside, then wait for a Pivot High Day that has three lower highs just before the pivot day and three lower highs just after. See Below The high of the day will look like a small needle poking up higher than all of the surrounding days. Points order for a stock using to be able to reverse course and go the opposite direction, in this case a rebound to the upside, the selling pressure must dissipate. When this occurs, any small amount of buying pressure can act as a catalyst and get a new price rally under way. Here the Swing Trader has two options. An aggressive trader can take a position intra-day as soon as he or she see the price begin to cross above the strategies. A more casual Swing Trader who may not have the luxury using being around a computer during market hours can place limit order to buy shares the next day at the open after spotting 1 successful CLOSE ABOVE 5-Day SMA. In either case, the move back above the 5-Day SMA represents the first hint of renewed buying pressure and an increase of the upward momentum for the stock, after a pullback. Is the Pivot High Day, B. Is the Days of selling exhaustion, C. Is the Entry Trigger. The closes count can include days that are part of the Pivot High pattern. This is your trigger to get LONG on a Swing Trade. The closes count can include days that are part of the Pivot Low pattern. This is your trigger to get SHORT on a Swing Trade. They are, points the low of the current bar, below pivot low of 1 day back, and the 3rd is below the using of 4 trading days. Placing a stop below the current day's using might be a tigher stop and allow you to aggressively trade a bigger position because if the stop gets hit it could be the same dollar loss as if you traded less shares but used a wider stop. One way pivot perhaps increase the accuracy rate of follow through on a trade setup like we have discussed here in this article is to look for a trade setup that occurs just ABOVE AN UPWARD SLOPING KEY MOVING AVERAGE. When you get the Pivot Setup just above lets say, an upward sloping day SMA or day EMA for example price may get the added effect of a moving average bounce. Automation Is The Key. What if you had a piece of software that automatically did pivot the processing for the above Pivot Strategies setup, in addition to 10 other Swing Trading Setups on your entire watchlist of stocks with the single click of a mouse button? This could help you save a ton of time each evening and prevent analysis mistakes you might make. Meet Jeffrey - The Developer of the Stock Pivot Trade Analyzer Software System Besides being a full time Swing Trader and Day Trader for the past 10 years, Jeffrey has been a Software Engineer for most of his adult career working with numerous Fortune companies designing and developing dozens of large scale software systems ranging from Corporate Accounting Systems, Scheduling and Forecasting Systems and Statistical Data Analysis Programs. Over the past 5 years he has been able to devote all of his skill and experience from the Software Industry into developing one of the finest and most sophisticated pieces of Stock Signal Analysis Systems for use by himself as well as his fellow Swing Traders Jeffrey's Trading Workshop The Stock Pivot Trade Analyzer Picks Off Every Entry With Precision. Here is an example of the Pivot Trader in action calling out every single entry on a high flying stock with cool precision. Our Newest Swing Trade Setup. We call this the SUPER DEEP PULLBACK. Have you have seen the stock of a really great company start to selloff, trading lower and lower. You know it is becoming way undervalued and must be getting ready to bounce, but you are just not sure when it is safe to buy. Well the new Super Deep Pullback performs unique analysis to get you in just before the big bounce occurs and the price attempts to retrace back to previous levels. Cool Export Features Of The Software. Each evening when you auto-analyze your favorite watchlist of stocks for potential Swing Trading Setups, you can easily print or export to an excel spreadsheet all the Trade Alerts that the software finds. The Stock Pivot Trade Analzyer not only does all of the hard trading analysis and number crunching for you, but allows you several easy ways to export the results for futher study. Think of it another way, if the Pivot Trader can just keep you out of one BAD TRADE going forward, your entire 1 year membership is covered. Ready to get started?
How To Trade Pivot Points In The Futures And Forex Markets
How To Trade Pivot Points In The Futures And Forex Markets
3 thoughts on “Trading strategies using pivot points”
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