Day Trading These Stock Market Swings
| January 30, 2010 | Posted by admin under Day Trading Ideas, Intro to Trading, Swing Trading Ideas, Techncial Analysis Tutorials |
I got asked to post a chart of the intra-day trends I mentioned in Stock Market Outlook – Key Support Broken. What follows is not my actual chart from the last two days, but have recreated here to show the general idea. I have used SPY in the chart. There are fantastic tradable moves which are capturable, the only caution is avoid lines on extreme angles. These will of course be broken, but does not in anyway confirm a reversal. Also, look for simple signals of reversal, such as moving higher to take out a recent swing high after failing to move below a low, or vice versa (heading lower after failing on an attempt to move past a swing high). The idea is to enter with trend as price moves to the trend line. Trade the micro trends, but be aware of the dominant trend and give credit to the dominant trend if micro and dominant paths converge. Exits should be near or just past recent swings (lows in the case of downtrend, highs in uptrend). This does work best in volatile markets, but can be used even ranging markets as price moves back and forth within its box.
As one trendline is broken, another can be drawn as swings are made in price. Broken trendlines are not always reversals, but simply a change in the angle of the current trend. By drawing trendlines of main trends present it should become apparent when this is occurring in real time.
Not all trendlines have been drawn, but the more obvious ones have. Having the trendlines as well as marking horizontal support/resistance on the chart as they occur intra-day can provide key insight into the dynamics of how the market is moving.
SPY - Intraday trendlines
You might be interested in the four complimentary videos on Trend TV:
VIDEO 1. Basic Indicators to Analyze Markets
VIDEO 2. Advanced Trading Applications of Candlestick Trading
VIDEO 3. Day Trading Made Simple
VIDEO 4. Using “Differences” to Spot Shifts in Momentum
There is no cost as this is part of an educational program that we thought you would find beneficial. Please click the link below for access to Trend TV:
Watch Now – http://www.ino.com/info/488/CD3784/&dp=0&l=0&campaignid=16
Cheers,
Cory Mitchell, CMT
~Know your risks when trading. Please read the Legal Disclaimer page.
[...] after about the first half hour of trading to zero in on reversals in the short-term (see Trading These Stock Market Swings for more info). Positions are taken aggressively on the short side when intraday trendline is down. [...]