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Swing Trading

 

Swing Trading

This is just an idea for working with other beeline traders looking to improve their analysis of swing trades.

For definition, I am referring to the bear/bull channels where you can draw a trend line and see a pair moving up and down within the channel while it follows it's current trend.  

First and foremost in importance is we must always remember swings/channels are not never-ending.  The more cycles it completes the bigger the chance of a break out.  So if the trend is a downward channel then you would count each bear pivot in the cycle and give a point value based on how many cycles it has completed.  For example if it pivoted 4 times and appears to be ready to head for it’s 5th then you know the channel has been going on for at least 4 cycles and probably starting to show bigger wicks with each cycle.  That would be a low point value because the channel is old.

 For that example we would award points based on rules we make up as a group.  1 point if it has pivoted more than 5 times, 3 points if it has only pivoted 3 times etc.  Points can be determined and awarded for several criteria, this is just one example.  If we, as a group, determine that the number of cycles already completed is important then we can award heavy or light points.  If the same trade has had 3 wicks break out of the channel and fall back in, we can award points for that as well.  Once we determine what is important and should be noted then we begin adding up the points and determine if we should get into the trade and at what point we should exit to avoid getting caught in a break out.

 It’s just a beginning idea, but it would provide focus for us and a lot of useful discussion to determine whether or not we should trade the swings in a channel.  I think it would help us all to pay more attention to price action and less reliance on indicators and oscillators.

Again, just an idea.  The examples are basic and need discussion.

Anyone interested?

Thu, 09/17/2020 - 9:53am
 
FrankS

What Timeframe (TF) will be used? D1, H4? H1??

 
triguylm1

Here is what Shawn says about swing trading.

See at:
https://www.youtube.com/watch?v=VRKxqH3qaUQ

He specifically measures swing trades on an 1 hour chart. The result is about 80 Pips on average for EUR/USD, One can double that to 160 pips for GBP/USD.

I have seen price move over 600 pips in just 10 days with GBP/USD. See Chart on Sept. 1 to Sept 10 GBP/USD went bearish from 1.3400 down 600 pips past 1.2750

So swing trades can be short term as well, depending on one's risk tolerance. More on that in the video.

 
Rookie

Thx Lindsey, I watched this video now for XX times,
Shawn makes a great connection to the types of trader defined buy the number of price cycles.
and then about the probabilities percentage of 1, 2 or 3 price cycles completing consecutively.

So I relate this to the probility of what is the percentage of the next candel, 1 is very high, 2 not bad, 3 about 50% 4 maybe 20% and after that it gets really low.

For me, it is good food for thought. But for Shawn is why he trades one price cycle.

 
dcame

FrankS

The timeframe would vary because a channel may show up clearly on a D1 but will get completely lost when you drill down to H1 or vice versa. I currently check D1 first and work my way down. Since I am Prefund I have to be careful about price and time cycles and the number of open trades. Balancing the differentials can be tough, however that is by design, Gold II is meant to get us honed in on our stats, not profits. Right now I am focused on price action and consistency.

My original post was an idea to recognize probability not profitability. It is not meant to be a strategy by any means, just a measurement tool at best.

 
FrankS

I'm open to a collective or team of watchers of the cycles and channels. Many traders here are already sharing their thoughts and views. It would be a positive and worthwhile seeing a team approach, so to speak, would work, even though all have our own style of entry, SL, and TP.

I'd be willing to share my TDAmer chart snapshots using Lin Reg Channels if that would help. I would just need an agreed TF for the snapshots as well as the length of the channels.

 
Rookie

Not during the NY Open, I would be interested in this group.

 
FrankS

Rookie, I merely see this as a data-sharing group. And that data would be limited to the prev day close unless there is a need for something faster or more responsive. But that can become a burden. Heck, all of us do that type of research anyway, and sometimes we're so busy, we don't always keep it current. It could work for the benefit of all, I think.

Consider the GBP/USD trade that TriGuy brought to our attention. I did well on that trade, in spite of the fact that I seldom trade that pair.

 
Rookie

We are on the same page,

I think it was James Clear that wrote the following;
Onward to Consistency, Both Individually and in a Group Setting

1. the Focus must be on the accuracy
2. all members must be held accountable for their trades (statistics, record keeping with analysis)
at a min Apiary back-office trading stats, Plot Trades and weekly bullet points for improvement)
3. a member must be open to diverse opinions
Ergo if the group focuses on the process and not be or become a self-serving bias.
This bias can be very hard to identify, from truly wanting to help to self-justification.

In any case, I would be most appreciative to learn from other long term traders.