13. My Swing Trading Method
• The method has rules for
• 1. what share
• 2. Entry
• 3. Exit
• 4. Position sizing
14. Swing Trading
• Stock selection
• I only swing trade “Long” in shares that have good RV
values above 1.25 and acceptable RS numbers
• What's unacceptable to me may be fine for you.
• I am travelling to much for lots of surprises and like RS
numbers about 1.15 at the very minimum.
15. Swing Trading
• The technical position of the overall market is vital
• If the overall market is rising that’s the best and only
time to be taking long position.
• Clearly the opposite is true for shorts.
• If the VV composite is above a 200 day moving
average and VV has given a confirmed call then I
want to be in long only trades.
• Conservative I know but that’s MY plan
16. Swing Trading
• The basis of my trade is the AB=CD pattern
• I like to see a pullback to an old high that occurs
ABOVE the 89 average.
• Over the years I have noticed that pullbacks that
extend well below the 89 turn too often into reversals.
• The pullback should occur on falling volume.
• That’s what happened in Telkom and its shown in the
next slide.
18. Swing Trading
• The stochastic adds the last dimension to the trade
entry.
• The best entries occur when the stochastic is below 20.
• The best entries occur when the stochastic is showing
reverse divergence with the price.
• That’s shown next and I will explain on the flip chart at
the UG in detail.
• Its visual and a real edge in markets.
20. Swing Trading
• I use the VV stop loss for my swing trades.
• I could get closer to the market action but then the
stop is in the TRAFFIC and its easy to die in a sea of
stops. Calculate the number of shares to buy so as if
the position fails you lose no more than 2% of your
account.
• My entry is confirmed by the first solid green bar at the
level when the stoch is showing reverse divergence.
• A knowledge of candle patterns will be useful here.
There is plenty of free analysis all over the internet.
21. Swing Trading
• The target is vital in short term timing especially if you
are using leverage.
• I split my position into three pieces.
• Exit the first 1/3 when you have made as much as you
have initially risked. This brings the total risk to initial risk
on 1/3 of the position. (2/3 left but you have made 1/3)
• Exit the 2nd 1/3 at the old high and get the stop to entry
at this point.
• Exit the last 1/3 at a 1.618 extension of the last
pullback.
22. Swing Trading
• If the fundamental position of the share is good. If the
technical position of both the share and the general
market are also good then I can predict the future with
an accuracy that is uncommon in this line of work.
• The trades don’t come along as frequently as I would
like but I can have my cake and eat it. I have taken
trades where all the conditions haven't been met and
many have been fine. I will leave that to your own
research.
• The Telkom trade was broadcast last week in a
webcast prior to the move
