Learn how to swing trade: 🚀Expecting a move and entering a move are 2 entirely different matters

Swing trading offers an exciting route to navigate the market's ups and downs, aiming for profits over days to weeks. Yet, grasping the difference between anticipating a move and jumping into action is key. Inspired by the rich insights of a trading strategy video, this guide zeroes in on this critical distinction, using practical examples from the Dow Jones Industrial Average (DJIA) and its futures (YM). Whether you're a market veteran or a curious newbie, you're about to unlock the secrets to swing trading success. 📈

How to trade: Expecting vs. executing🧐🚦

  • Expectation vs. Execution: How to trade - expecting a move and entering a move are two entirely different matters. Here's how to bridge that gap:
    • Anticipation: Spotting the potential for a market move.
    • Action: Deciding the precise moment and manner to enter the trade.
    Key strategies for swing trading:

Recognizing technical patterns as maps 🔄

  • Technical pattern orientation/map: In the video, just as an example, my techical map is rising channel that is also a potential bear flag, that signals a potential downward move if broken. Look for this or other pattern as a precursor to selling, in the case shown within the above video.

Choosing entry points for your swing trade 🎯

  1. Wait for confirmation, increasing your probability to win in the trade but paying in a later entry, thus lowing your reward vs risk potential: As explained in the video, you would wait for the bear flag to 'activate' by price breaking down lower than the bottom band of the rising channel, and preferably a further confirmation by looking for two consecutive candles below a key level, like that lower bottom band, to avoid false breakouts.
  2. Channel Mid-Points: Consider entry near the mid-point of a larger channel for a balanced risk-reward.
  3. Seek the higher reward vs risk and paying the price of lower probability, in most cases: Consider a possible reversal at the end of a range, like the top ban of the chanel and potential bear flag, as shown in the video above. Or bet that the price will fake a breakout up and fail, then reversing harder.
How to trade - expecting a move and entering a move are 2 entirely different matters
How to trade - expecting a move and entering a move

Managing risk on your swing trade ⚖️

  • Stop-Loss Orders: Place them above a recent high to limit losses.
  • Partial Profits: Take profits at strategic points, like the channel's lower bend, to secure gains.

Contrarian thinking, sometimes 🔄

  • Sometimes and moreso with trading ranges, bet against the trend, rather bet on a reversal: Sometimes, betting on a rejection of an upward move can pay off, based on pattern analysis.

Timing and patience with your swing trade ⏳

  • Avoid just entering straight away when you have a read/opinion: Don't jump in without clear signals. Market reports can disrupt expected movements, leading to quick stop-outs or losses.

Practical tips for swing trading execution

  • Technical analysis is key: Use it to identify patterns, trends, and potential entry and exit points.
  • Emotional resilience matters: Stay calm and collected, even when the market moves against you.
  • Risk management is crucial: Always know how much you're willing to lose on a trade and set your stop-loss orders accordingly.
  • Stay informed: Keep up with market news and reports that can affect your trading strategy. Don't trade into a key event without knowing it.

Swing trading is as much about timing and strategy as it is about understanding the market's language. By focusing on the difference between expecting and entering a move, you equip yourself with the insight needed to make more informed decisions, potentially leading to better trading outcomes. Happy trading! 🚀💼