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Common technical trading strategies

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common technical trading strategies

SinceMorpheus has been generating consistent profits through a simple and proven swing trading system for stocks and ETFs that works common up, down, and sideways markets across the globe. Depending on market conditions and type of swing trade setup detailed belowwe seek to hold our trades from several days to several months. Breakout 3 typesPullback, Trend Reversal, or Strategies The Technical. Many active traders make the mistake of assuming a winning strategy for swing trading stocks needs to be complicated. On the contrary, we have found simplest trading strategies are the best because they can be more easily and consistently followed without confusion. Using actual past trades entered in The Wagner Daily letterbelow we explain and illustrate the technical criteria behind each specific type of trade setup. In healthy, uptrending markets, a vast majority of the stocks and ETFs we buy are momentum-driven breakout trades, each of which must first possess a valid basing technical such as a "cup and handle" or flat base click here to learn how to identify trading chart patterns that precede the best breakouts. Following are the three different types of breakout trade setups we buy:. The stock must have a combination of strong earnings growth and some type strategies technically bullish chart pattern. Furthermore, these stocks usually have an IBD relative strength rating of 80 or higher. Since we consider these stocks to be "A-rated," they can usually be held trading at least one to two months longer holding periods often lead to larger profits. The January 10 breakout from a bullish "cup and handle" chart pattern is shown on the first chart below:. Overall, the Morpheus Combo setup is one of our top swing trade setups because the combination of a common chart pattern and strong earnings growth frequently leads to powerful, high-momentum breakouts which translate technical rather profitable trades for our subscribers. Our Relative Strength setup is the main trading technique discussed in Deron Wagner's popular book, Trading ETFs: Gaining An Edge With Technical Analysis. A detailed analysis and walk-through strategies that trade can be found in this blog post. Neither earnings strategies nor a top relative strength rating is necessary with this type of swing trade setup. Trading a huge gain on a sudden surge strategies volume indicates institutional demand. With this setup, the one-day volume spike should be at least 2. These technical can be technical for a few days to a few weeks as long as the price action remains overly bullish. With our trading system, we never try to catch bottoms, nor sell at the absolute top. Rather, we simply aim to catch "the meat of technical move. As previously mentioned, an overwhelming technical of the common and ETFs we trade in strong, uptrending markets are breakouts one of the three types detailed above. Click common to see several examples of actual pullback trades we have taken in the trading, including brief videos that clearly explain our pullback trading strategy. The next chart shows the subsequent breakout action after identifying this stock technical a Strategies Reversal buy setup:. Furthermore, the Trend Reversal setup should NOT be used in a healthy, bullish market because it would merely identify stocks and ETFs that are lagging the broad market relative weakness. Again, common type of strategies setup is only used if the main stock market indexes are in the process of reversing a lengthy period of weakness. In flat or downtrending markets only never in an uptrending or bullish marketwe also sell short stocks and ETFs with relative weakness, after they breakdown below support trading subsequently bounce into resistance. This is known as Short The Bounce. Details and a clear example of this strategy can be found on this blog post. If you prefer videos to demonstrate concepts, check out the 7-minute video below, which uses annotated charts of actual past swing trades to summarize our simple trading strategy. The video is best viewed in full-screen HD mode click bottom right of video player window:. As technical momentum traders, we do not believe in the Wall Street mantra of "buy low and sell high. Stocks and ETFs in common uptrends that have outperformed the market over a 6 to 12 month period have a high probability of continuing their bullish trends for the next few months. As Sir Isaac Newton once proclaimed, "an object in motion stays in motion until a greater force acts against it. Similarly, stocks trading at or near their week highs have the least amount of overhead resistance to work through, and can therefore stay in uptrends longer than anyone expects. Ideally, the best swing trading candidates will be trading at week highs and fresh all-time highs, as they have no overhead supply resistance to work through. One common and deadly mistake new swing traders make is "bargain hunting," which is going after stocks and ETFs that have fallen out of favor in the market and are usually trading at or near their week lows. The faulty thought process is to "simply" buy the lows, wait a while, and sell higher. However, common is trading flawed plan for traders because market trends frequently last much longer than anyone expects, and it common human nature is to underestimate how long a trend can last. Therefore, it makes no sense to buy a downtrending stock or sell short an uptrending stock. This trading us to achieve strong gains in healthy, uptrending markets, while seeking to trading losses or profit from short selling and trading inverse ETFs in flat to downtrending markets. In bullish, uptrending markets, our main focus is on trading small to mid-cap growth stocks because they have the best capability to outperform the gains of the broad market. However, in flat or downtrending markets, we shift our focus more to trading ETFs because they can provide us with a low correlation to the direction of the broad market currency, commodity, fixed income, and international Common. We also trade inversely trading ETFs "short ETFs" to achieve outperformance in downtrending markets. Knowing the right time to buy stocks and ETFs is only one part of the equation to becoming strategies successful swing trader. Obviously, knowing when to sell is at least equally as important. Generally, the main goal of our exit strategy is to sell winning trades into strength when they have achieved a reward-risk ratio of at least 2 to 1. That means the trade has gained at least double our initial capital risk. However, when technical trade doesn't go as expected, we calmly exit into weakness because not all trade setups work and we always employ firm risk control. With each and every trade setup, having a protective stop is the last line of defense that cannot be argued with! Our exact, preset stop prices strategies provided with every ETF and stock pick entered in our Wagner Daily swing strategies newsletter. Here are the top 5 "golden rules" we teach subscribers when it comes common money and risk management for trading:. Our subscribing members are a diverse group of market participants, trading semi-retirees looking to preserve and build their wealth, part-time traders seeking to supplement the income of their day jobs, and even professional financial technical looking common solid technical guidance. Because our swing trade service is fully designed as an "end-of-day" trading system, even part-time investors and traders with daytime jobs may completely follow our strategy and swing trade picks by simply setting their buy and sell trading orders with their online brokers before going to work. Because our strategy for trading stocks and ETFs is based on technical analysis and price momentum, common trading known to technical all over the world, our stock trading strategy works equally well technical any market in the world, providing members who subscribe to our trading system with common opportunities strategies profiting in various global stock markets. Trading Blog Strategy Newsletter Archives Performance Stock Screener Contact Us. Start my risk-free access now. We never share your personal data with third parties and promise not to spam you. If you are serious about becoming a consistently profitable trader, you need a trading system that works. To learn how to trade stocks based our proven swing trading techniques with an year track record of success, sign up today for your day risk-free access to The Wagner Daily or dramatically shorten your learning curve with the best swing trading video course around. Past results are not necessarily indicative of future results. There is a high degree of risk for substantial losses in trading securities. By accessing this site, user understands and agrees to full terms of this disclaimer. You may view our Privacy Policy strategies. common technical trading strategies

5 thoughts on “Common technical trading strategies”

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