August 18, 2011
- in Uncategorized by schooloftrade
One of my favorite trading tools; Swing Highs & Lows
Higher-Highs (swing highs) are when price makes a new high and then pulls back no more than the original high.
Lower-Lows (swing low) are when price makes a new low and then retraces up no higher than the previous low.
What does this mean? Tell us?
– Swing high tells me the buyers are in control
o Announces that EVERYONE is away buyers in control
o Swing Highs are BULLISH sentiment
– Swing Low tells me the sellers are in control
o Announces to EVERYONE that the sellers are in control.
o Swing Lows are BEARISH sentiment.
When do we use these?
– For determining market sentiment
– For triggering the entry on a trade
– To find where my stop loss will be
– To find where my profit target will be
Example:
– Long trade: entry is the break above a swing high, and the stop loss uses the most recent swing low.
– Short trade: entry is below the swing low, and the stop is at the Swing high.
They will work the best when you look for these opportunities around the levels identified by the AUTO LEVELS INDICATOR
Which higher highs/lower lows are MOST important? Slower timeframes have more important levels.
Swing high on the 89range chart is much more important than a swing high on a 4range chart.
Tomorrow we will have crude contract rollover.
Use the BIG MONEY as your trigger for the best trade potential
Look for the trade confirmation/trigger/signal to enter a trade, we dont simply buy the lows.
