Introduction — Swing Trading Strategy That

Works
Our team at Trading Strategy Guides has already written
about other swing trading strategies that work. Read
the Harmonic Pattern Trading Strategy , or MACD Trend
Following Strategy. These are some of the most popular
strategies ever posted at Trading Strategy Guides.
This time around, we’re going to outline a simple swing
trading strategy. It’s similar to what Jesse Livermore used to
trade. Let’s review the swing trading strategy Livermore used
to help forecast the biggest stock market crash in history. It
is the Wall Street crash of 1929, also known as Black
Tuesday. Here is another strategy called a weekly trading
strategy that will keep you sane.
By the way, after the 1929 stock market crash, Livermore
reportedly made $100 million, which if it’s adjusted to
inflation is estimated to be about $1.39 billion today.
Quite a lot of money, wouldn’t you say so?

Swing
trading
If you were to take a swing trading course right now, I believe
the current market conditions would allow any trader to use
the proper trading technique to achieve solid results. There
are a few things that I think we should consider before
getting started. If you’re interested in hearing from Casey
Stubbs talk about swing trading strategies, he talks about it
here on The Desire to Trade Podcast.
One of those is to determine if we should trade a counter
trend system or a trending stock setup. Either one can work,
but it is up to you to determine which one you want to use. I
recommend using paper trading on a stock swing the next
time you see one develop.
This article is going to go in-depth about a key swing trading
technique on daily charts. While this may be considered
advanced swing trading, this strategy is suitable for all
investors. It is perfect for home study. We will tell you how to
do proper technical analysis and show you when to enter the
trade and when to exit the trade. We will do this by teaching
you how to set the right profit target.
It is important to make sure you have a fully developed
training plan before starting to trade any swing trading
system. This will help you prepare to become more
successful and join the ranks of professional day traders. It is
our goal to give you the trading opportunities, as well as help
you in every way that we can to become the best swing
traders around. You can also learn the way bankers trade in
the forex market.
Before we get into the strategy I am going to give you a few
basics about swing trading.
What is Swing Trading?
Swing trading strategies are pretty simple. Using an
intermediate time frame (usually a few days to a few weeks),
swing traders will identify market trends and open positions.
The name swing trading comes from the fact that we are
looking for conditions where prices are likely to swing either
upwards or downwards.
Swing traders can use a wide array of technical indicators.
What makes swing trading unique is that it blends several
components of day trading, with the speed of position
trading. Swing trading indicators are primarily used to find
trends that play out between 3 and 15 trading periods. After
we analyze these periods, we will be able to determine
whether instances of resistance or support have occurred.
The next step is to identify the bearish or bullish trend and
look for reversals. Reversals are often referred to as
pullbacks or countertrends. Once the countertrend becomes
clear, we can pick our entry point.
The goal is to enter into a position where the countertrend
will quickly reverse and prices will swing. This is exactly what
enabled Jesse Livermore to earn most of his fortune.
Now…
Before diving into some of the key rules that make a swing
trading strategy work, let’s first examine the advantages of
using a simple swing trading strategy. You can also read
about budgeting in Forex for better trading.
3 Fast Benefits of Our Simple Swing Trading
Strategy.
The main advantage of swing trading is that it offers great
risk to reward trading opportunities. In other words, you’re
going to risk a smaller amount of your account balance for a
potentially much bigger profit, compared to your risk.

Swing trading
The second benefit of using swing trading strategies that
work is that they eliminate a lot of intraday noise. Now you’ll
be trading like the smart money does, which is in the big
swing waves. Also, read our ultimate guide on the Ichimoku
Cloud.
The third benefit of swing trading relies on the use of
technical indicators. Using technical indicators can reduce
the risks of speculative trading and help you to make clear
decisions. While some swing traders pay attention to
fundamental indicators as well, they are not needed for our
simple strategies.
[wd_hustle id=”22″ type=”embedded”/]
The last benefit of using a simple swing trading strategy is
that you won’t need to be glued to the screen for the whole
day like with day trading strategies. A swing trading plan will
work in all markets starting from stocks, commodities, Forex
currencies, and much more. If you are interested in learning
about other methods of trading our Trading Strategy master
post is a great resource.
Like any trading strategy, swing trading also has a few risks.
Because swing trading strategies take several days or even
weeks to play out, you face the risks of “gaps” in trading
overnight or over the weekend.
Another risk of swing trading is that sudden reversals can
create losing positions. Because you are not trading all
throughout the day, it can be easy to be caught off guard if
price trends do not play out as planned. To decrease the risk
of this happening, we recommend issuing stop orders with
every new position. Stop orders can help you “lock in” your
gains and can also help you cut your losses.
Next, we need to make sure you have access to the proper
indicators for this strategy.

Swing Trading indicator you need.

The ONLY indicator you really need:
Bollinger Bands Indicator: This is a technical indicator
developed by John Bollinger. Bollinger Bands are designed to
spot overbought and oversold territory in the markets. They
also gauge the market volatility.
Our swing trading indicator makes it easy to manage the
risks of trading and also make use of price changes. Using a
candlestick trading chart can also be helpful. These charts
provide more information than a simple price chart and also
make it easier to determine if a sustained reversal will occur.
Many swing traders also keep a close watch out for multi-day
chart patterns.
 Head Shoulders Patterns
 Flag Patterns
 Cup and Handle Patterns
 Moving Average Crossovers (also consider the Ichimoku
Cloud)
 Triangle Trading Patterns
When there are higher low points along with stable high
points, this suggests to traders that it is undergoing a period
of consolidation. Consolidation usually takes place before a
major price swing (which in this case, would be negative).
Learning about triangle trading and other geometric trading
strategies will make you a much better swing trader.
This swing trading indicator is composed of 3 moving
averages:
 The central moving average, which is a simple moving
average.
 And then on both sides of these simple moving averages are
plotted two other moving averages at a distance of 2
standard deviations away from the central moving average.

Bollinger bands
The figure above should give you a good representation of
what Bollinger Bands look like. Most trading platforms come
with this indicator in their default list of indicators.
If you’re interested in learning more about how one can profit
from this amazing indicator – Bollinger Bands – look no
further than our Bollinger Bands Bounce Trading Strategy.
The preferred setting for the swing trading indicator is the
default settings because it makes our signals more
meaningful. We reached this conclusion after testing the
strategy based on several inputs.
Now, let’s move forward to the most important part of this
article, the trading rules of the swing trading strategy that
works.
Before we go any further, we always recommend writing
down the trading rules on a piece of paper. This exercise will
step up your learning curve and you’ll become a swing trader
expert in no time.
Let’s get started…
Fast Action Steps For Out Swing Trading
Strategy That Works 2023
(Trading Rules – Sell Trade)
This strategy is really only made of two elements. The first
element of any swing strategy that works is an entry filter.
For our entry filter, we’re going to use one of our favorite
swing trading indicators aka the Bollinger Bands. The second
element is a price action based method.
Step #1: Wait for the price to touch the upper Bollinger Band.
The first element we want to see for our simple trading
strategy is that we need to see the stock price moving into
overbought territory. Any swing trading strategy that works
should have this element incorporated.
Bollinger bands strategy 1
Note* The preferred time frame for this simple swing
trading strategy is the 4h time frame. This strategy
can also be used on a daily and weekly time frame as
well.

Step #2: Wait for the price to Break below the Middle Bollinger
Bands.
After we have touched the upper Bollinger Band, we want to
see confirmation that we are in overbought territory and the
market is about to reverse. The logical filter, in this case, is to
look after a break below the middle Bollinger Band.
The break below the middle Bollinger Bands is a clear signal
of the shift in market sentiment.
Bollinger bands strategy 2
We at Trading Strategy Guides don’t trade breakouts without
determining whether or not there are real buyers/sellers (in
our case, sellers) behind the breakout. This brings us to the
next step of our simple swing trading strategy.

Step #3: Swing Trading Indicator: The Breakout Candle needs to

be a Big Bold candle that closes near the Low Range of the
Candlestick. → Sell at the Close of the Breakout Candle.
So far our favorite swing trading indicator has correctly
predicted this sell-off, but we’re going to use a very simple
candlestick based method for our entry trigger. For entry, we
want to see a big bold bearish candle that breaks below the
middle Bollinger Band.
The second element of this candlestick based method is that
we need the breakout candle to close near the low range of
the candlestick. This is indicative of strong sellers, which
really want to drive this currency pair much lower.
Bollinger bands strategy 3
Every swing strategy that works needs to have quite simple
entry filters.
Now, we still need to define where to place our protective
stop loss and where to take profits, which brings us to the
next step of our simple swing trading strategy.

Step #4: We hide our Protective Stop Loss above the Breakout
Candle.
The breakout candle has a lot of significance because we’ve
used it in our candlestick based entry method. We assumed
that this candle shows the presence of real sellers in the
market. If the high of this candle were to be broken, it’s clear
enough that this is simply a fake breakout as there are no
real sellers.
It’s nothing complicated about it, right?
Bollinger bands strategy 4
If you want to learn more about this breakout technique and
how to manage breakout trades, please read our Breakout
Trading Strategy Used by Professional Traders article.
The next part of our simple swing trading strategy is the exit
strategy which is based on our favorite swing trading
indicator.

Step #5: Take Profit once we break and close back above the
middle Bollinger Bands.
In this particular case, we’re looking at a short trading
example. So, if the price breaks back above the middle
Bollinger Banks it’s time to get worried and take our profits
as it can signal a reversal.
The reason why we take profit here is quite easy to
understand. We want to book the profits at the early sign the
market is ready to roll over.
Bollinger bands strategy 5

Note* The above was an example of a SELL trade. Use

the same rules but in reverse for a BUY trade. In the
figure below, you can see an actual BUY trade
example, using our simple swing trading strategy.
Bollinger bands strategy 6
There are lots of other swing trading strategies out there.
You could consider joining a swing trading service where they
do the heavy lifting on which strategies to use and exactly
when to use them. We like the swing trade alerts offered
at Stock Market Guides. They know which strategies have a
track record of success for each stock, and they send text or
email alerts when they find good trade setups

You can notice that the above trade is still running as

we have yet to break and close below the middle
Bollinger Bands.
This just proves that the higher the time frame the
more powerful our simple swing trading strategy is.
Simple Swing Trading Strategy FAQ
What is the difference between swing trading and day
trading?
The main difference between day trading vs swing trading is
the time frame on which the trade makes its trading
decisions and the length of the trade. By comparison, day
trading works on short-term time frames and positions are
closed by the end of the day, whereas swing trading works on
medium-term time frames.
How to learn swing trading?
To master the art of swing trading, it simply comes down to
following these 5 time-tested trading principles:
-Trends depend on their time frame.
-Buy the first pullback from a new high and sell the first
pullback from a new low.
-Short rallies, not selloffs.
-The best trades show major convergence.
-Bulls live above the 200-day moving average, while bears
live below it.
This set of swing trading rules were first adopted and
developed by the author of “The Master Swing Trader,” Alan
Farley.
What is a swing trading strategy for a stock market crash?
The Double Death Cross strategy is the best swing trading
strategy you can use during a stock market crash. This is not
a matter of “Will the stock market crash again?” but it’s
really only a question of when is the stock market going to
crash again.
What is the best swing trading strategy for stocks?
Follow these 4 simple steps to start swing trading stocks:
-Find stocks that are ready to make a big move soon
-Enter a position
-Wait for a swing wave to develop in the direction of the
primary trend
-Scale-out of your stock in 3 to 10 days to cash out profits
What is swing trading strategies for beginners?
The basic principles for swing trading that every beginner
should adhere to is to only buy uptrends and only sell
downtrends. But in order to take advantage of the ebbs and
flows of the market you need to learn how to identify the
 right swing high and low. Here is a quick trading guide to
spotting correctly swing highs and swing lows in any market.
Does swing trading work?
Yes, swing trading can work well as a trading strategy.
When done properly, swing trading can be a profitable
approach, If you as a trader can execute your plan. Being
aware of the risks and time involved using this method of
trading.
As with any trading strategy, success will depend on several
factors such as market conditions, trader experience and risk
management practices.
Simple Swing Strategy Summary
Some complex strategies can be too overwhelming and
confusing. Using a simple swing strategy can be all it takes to
succeed in this business. Albert Einstein, the greatest
scientist of all time once said that “everything should be
made as simple as possible, but not simpler.” You can also
read how to make money trading.
A swing trading strategy should be made of a swing trading
indicator that can help you analyze the trend structure, and
secondly a price entry method that looks at the price action
which is the ultimate trading indicator.

We understand that there are different trading styles and if

swing trading is not your thing you can try our Simple
Scalping Strategy: The Best Scalping System which
attracted a lot of interest from our community.
Here’s what we learned in today’s article on our simple swing
trading strategy:
 Swing trading is a short-term trading strategy that involves
holding trades for a few days to a few weeks.
 The steps for a successful swing trading strategy include
identifying trends and chart patterns, selecting the right
indicators, setting entry and exit points, and managing risk.
A swing trading strategy video provided valuable visual
demonstrations of how to trade the strategy.
 Swing trading strategy FAQs include questions about how to
identify the right indicators to use, how to set stop-loss
orders, and how to manage risk in volatile markets.
Today you learned how to use our swing trading
strategy, please leave a comment, we want to hear from
you.
Thank you for reading!