Trading Style- Swing Trading
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Swing trading refers to a style of trading attempting to capitalize on the price movement of an instrument as it transitions from a period of sideways price action, then makes a strong directional move either up or down, over a period of days or weeks. In essence we are short term trend followers.
Identifying periods of sideways market action can lead to inflection points where directional moves have a slight edge and we aim to capture such moves when they occur. Potential trades are derived from a universe of 38 liquid US futures markets. By analyzing price structure, entry points (if any) are established for each market. Along with the entry price, a stop loss point and profit target are calculated. The objective is to capture a clean price swing if the market moves in the desired direction and to exit as soon as the swing is over. We do not stay in the market once the original edge of the trade has been exploited. The edge of this method derives from finding markets that have an imbalance between buyers and sellers and have the potential to make a directional move. We want to trade in the direction aligned with the subsequent price action. In addition correct risk and money management principles must be applied, such that if a trade doesn't work out as expected, a small loss is quickly taken. |
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