This article is an introduction to swing trading, and highlights the best timing indicator – to time you swing trades for big profits.

What is Swing Trading?

Swing trading sits in the middle, between day trading, and trend following – and swing trades normally last a few days. The swing trader will enter a position one way, and exit with a profit – and enter a possible position the other way.

The Swing Traders Best Market

For the swing trader, it’s best to trade, when a market is going nowhere fast.

Swing trading does not work in strong bull and bear markets – where price moves strongly in one direction – without a swing in the other direction, the swing trader will lose.

The problem with both swing trading, and long-term trend trading, is that success is based on identifying what type of market weâ??re looking at – i.e. bull, bear, or a period of consolidation.

Once you’ve identified a market as moving in a sideways channel – then it’s time to look for swing trading opportunities.

The Best Tool for Swing Traders

The best tool by far – the Stochastics Indicator – which is ideal for swing trading. The stochastic indicator is a momentum oscillator, which can warn of strength, or weakness in the market – often in advance of a final turning point.

The logic of the stochastic is based on the assumption, that when a market is rising, it will tend to close near the high – and when a market falls, it tends to close near its lows.

The Calculation

The stochastic oscillator as developed by Dr. George Lane, is plotted as two lines called %K, a fast line and %D, a slow line.

· %K line is more sensitive than %D

· %D line is a moving average of %K

· %D line gives the trading signals

Although this sounds confusing, it’s actually very similar to the plotting of moving averages.

For example, take %K as a fast moving average, and %D as a slow moving average.

The lines are plotted on a 1 to 100 scale. “Trigger” lines are normally drawn on stochastics charts at the 80% and 20% levels â?? this indicates when markets are overbought, or oversold.

Using Stochastics

The 80% value traditionally is used as an overbought warning signal, while the 20% is used as an oversold warning signal.

The signals are most reliable if you wait until the %K, and %D lines turn upward, below 5% before buying – and in reverse, above 95% before selling.

For swing trading, look to trade the crossover confirmations.

For example, buy when the %K line rises above the %D line, and sell when the %K line falls below the %D line.

Beware of short-term crossovers that may generate false signals. The best crossover is when the %K line intersects, after the peak of the %D line (a right-hand crossover).

Don’t worry if the above confuses you – you don’t need to understand the logic. When you look at stochastics on a chart, all you’re looking for is the visual signals – not the calculation behind them.

Do some research and practice, before trying swing trading with stochastics – but if you want an indicator to help you swing trade, and make some big profits – check stochastics out.

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Advanced Swing Trading is the title of a book by John Crane that gives step by step instructions on how to profit from short-term price moves. Action/reaction is a theory of a natural cycle throughout the market. When the action ends, the reaction begins and the trader can use this Reaction Swing to identify short-term trading signals and
target projections based on time and price. Profits can be gained as the market goes through this predictable cycle.

There will be an identifiable patter to market trends called the Reaction Cycle with the way to determine when the price is right for swing trading exit strategies. Long term big profit is not about insider information, but about knowledge, hard work and patience understanding market behavior.The market can be a chaos that need order to make big profits.

Market behavior is affected not only by economic supply and demand but also by human emotions. There is a deliberate pattern in these market forces and advanced swing trading takes advantage of that knowledge. You will be able to see clearly current market action and reliably predict what is going to happen next.

There are reversal days, also based on a natural cycle, in Advanced Swing Trading, when natural support and resistance levels work with the reversal dates. Price patterns also have characteristics and foretell market action.

Entry and swing trading exit strategies are determined by a time, price and pattern that work together. When the patterns do not match exactly, as sometimes they will one Reaction Swing can be used to project many reversal dates.

When you are familiar with how to use these strategies, short-term trading opportunities can be taken with confidence and much better results. These concepts can be applied to any portfolio because they are clear and precise and always work. Short-term trading has never been so lucrative and swing trading exit strategies have never been so clear. Great losses could have been avoided if traders had learned to read the market behavior. The signs were there but inexperienced investors were buying when the market was signaling a slow-down.

The really successful traders know that patience, discipline and hard work are what it takes to be successful in the long run. This success comes from understanding of the affect of human behavior on the market, not insider information. Advanced swing trading is free for any trader or personal investor and John Crane is offering his and his staff’s help to anyone who wants to take advantage of the amazing resource. The trader can calculate with advanced swing trading, if the market will make a major correction or a small correction against the trend.