Important...... If you want short term trades!!!

IF YOU WANT TO TRADE SHORT TERM READ THIS TILL THE END, IT WONT TAKE 5 MINUTES. 

Some time ago I mentioned about the Swing High and the Swing Low. Spotting them are very important to trade. If spotted at the right time makes you a SURE WINNER.

We had some swing low opportunities when the Market nose dived at the beginning of the year till the 19th. Then what happened? it turned, and still going up. When some of you asked me whether to buy I said wait, why? because if that low was the end of the down trend then we will have safe and better  chances in the next uptrend.

But lets brush up and get ready to TRADE WITH SWING LOWS AND SWING HIGHS.

Swing low is the lowest low on the 2nd day within 3 days, Swing high is the highest high on the 2nd day within 3 days. That is not the real definition but this way it is easy to remember. When the swing low has happened you BUY on the 4th day. If you can buy at a price within the range of the 3rd day it will be great, but sometimes you may have to take the risk of buying even a little higher. Then when do you sell? In a typical swing trade you wait for the swing high to occur, but I tell you to take a % of profits. May be you sell half of what you bought at that % profit , and wait to sell the  next half at the swing high when it occurs.

Now lets take an example.

Grain Elevators dropped with the market till the 19th and then rallied. The low of the 18th was 72.10, the low of the 19th was 62.00, then the low of the 20th was 69.00. Thus the swing low was formed. We buy on the 4th day. At what price? between the price range of the 20th. That is between 69 and 75.50. The 21st was the 4th day and you could have bought a decent amount between 72 and 75.50 during that day. Once you bought you must have the guts to sell on the swing low of 62.00, which is your stop loss. If you have bought between 72.00 and 75.50, you could have sold them by now as it went up over 86.00 yesterday, that was 6 market days. If you had bought at 75.50, then you would have made a profit of 9.17 after cost or 12%.  OK why I'm telling this now without doing it at that time. The reason was that I want to see whether the market is staying above the lowest of the 19th, which was 6235 points. As long as we are above that then the Market will give us many more swing trades in time to come. Grain Elevators is only one example, because there were many like that happened on the 19th. BFL, TAFL, TJL, AEL, PLC, PARQ, ALUF are some that saw swing lows on the 19th. They too would have given some decent returns. So let's watch and keep reading my posts, as and when I talk about Swing trading opportunities in the market.