Swing trading strategies always grab my attention. Why? – Swing trading is the golden method to make money in stock markets. It doesn’t require you to have an investor’s patience or a daytrader’s speed. It is no hidden fact that swing traders are the biggest moneymakers in the markets. Especially a newbie trader should always try swing trading before he enters the fast lane world of day trading.
If you go online and search the internet for a good swing trading strategy, you will end up with the result of a thousand with hundreds of strategies talking about high-end technical strategies. The fake Fibonacci world I call it. What if I tell you there is a simple price action following swing-trading strategy which if followed religiously can help you make a handsome amount of money.
I call it the
ENGULFING-SQUEEZE STRATEGY.
As the name suggest this strategy is traded with the help of Engulfing pattern. We identify stocks that are in a uptrend and and make a small pullback and take support at 200 moving average.
Once the stock gets takes support at 200 MA. We look for a bullish engulfing candlestick pattern. Then wait for the high of the Bullish Engulfing to be taken. Once high is taken enter for swing trade with 5% target and a 2.5% stoploss.
Indicators used –
1. The BULLISH ENGULFING screener in trading view.
2. 200 Moving average
Target – 5%
Stop loss – 2.5 %
Swing trading in stock in a long term downtrend.
A stock which has been in a long term downtrend can also be traded using this strategy. All you have to check is that the stock is at least 7% below the 200 MA. If the condition is full filled watch out for a bullish engulfing. Once the BE sticker appears get into trade when the high of the pattern breaks.
Target here should be the 200 Moving average and a stop loss of 2.5% should be strictly followed.
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