Product Description
In this book Victor de Villiers shows you how to successfully forecast market prices and determine what action should be taken. The Point & Figure Method is divided into ten chapters, containing charts, pattern examples, and a wealth of historical information. A must-read for those who want a true understanding of the point and figure method…. More >>
The Point & Figure Method of Anticipating Stock Price Movements
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Swing trading within the primary trend can be highly profitable and offer low risk.
Here we are going to look at a simple 4 point system for swing trading that any forex trader can use novice or pro.
Its simple effective and can be highly profitable.
You can look and test this method on any free chart service on the web and a good one is futuresource.com
You need to know the logic of support, resistance, Bollinger bands and stochastics and thatâ??s it.
If you donâ??t simply check our other articles.
Most swing trades done using this method last just a few days, but you will find you can bank some fantastic profits.
Step 1
Look for important points of resistance within the trend.
This can be done by simply looking at support or resistance points on both the daily and weekly charts.
Step 2
Look for a sharp move toward these levels, with price volatility high and with the top of the Bollinger band near the highs or lows.
Now you have spotted the opportunity, itâ??s time to look for entry levels.
You Need Confirmation
As we all know trading into support or resistance can be successful.
Of course in many instances support and resistance give way, so you need a method to time your entry.
Look for price momentum that is carrying price action toward to support and resistance to falter or reverse
Step 3
There is no better timing indicator than the stochastic â?? which measures short-term price strength or weakness.
When prices approach support or resistance the stochastic lines should be pointing in up (into resistance) or (down into support) wait until you see the following:
The stochastic lines to cross and show short-term momentum has changed.
With a test of resistance they will cross with bearish divergence and with a test of support they will cross to upside with bullish divergence.
This is the key to take your position confirming that price momentum has run out of steam and that resistance or support will hold.
Step 4
You need a target to take profits and this can be provided by the middle of the Bollinger band and or support or resistance levels.
Note
1. Only trade this method into significant support or resistance.
2. Look for a quick high volatility move
3. Never trade without getting the confirmation of the stochastic
4. Target â?? Your better to liquidate your trade as soon as target is hit, do not trail stops.
Thatâ??s it.
It sounds simple but I have been using this method for 25 years and it is one of the most effective ways of isolating high return and low risk trades.
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