Archive for the ‘Price Action Trading’ Category

Intraday Swing Trading with PVT

Tuesday, December 11th, 2012

Intraday swing trading 

As day traders we use the PVT method (price action, volume and trend lines) day in and day out.

Yesterday we saw some great examples of PVT in action.

PVT - Price Action Trading Example

On the chart above you can see a nice up trending stock. Let's focus on the area highlighted in the box on the chart below.

PVT - Price Action Trading Example

In this chart you can see one of the text book set ups of the PVT method.

The stock has already made a NEW HIGH for the day so we now that so far we are dealing with a strong stock.

The box on the chart above shows you the first retrace after the high was made.

We look for these retraces to flush out the sellers. 

Once we know the retrace is in effect we look for the clues that price action and volume give us to let us know if the next move will be higher.

In this example the retrace begins one bar after the daily high was established. We marked this as "1." on the chart below.

PVT - Price Action Trading Example

This bar is followed by 2 more bars (marked 2. and 3.) which gives us our "3Down" chart pattern that we love.

After a "3Down" we watch to see if price action AND volume work together to give us an entry signal.

The next bar after our "3Down" pattern (the blue arrow on the chart) we see the tell tale signs of the next UP move.

We notice that as the bar progresses it never trades below the low of the previous bar…a bullish sign.

We also notice that volume is increasing and as this 5 minute bar comes to an end we KNOW that we have increased volume.

We also see this bar trading higher than the high of the previous bar.

As of this together is a text book entry using the PVT method.

Once the entry is made we simply manage our position and watch as price action/volume continue to tell a story.

 

Swing Trading Week in Review – November 30,2012

Sunday, December 2nd, 2012

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$DIA - Swing Trading Strategies

Not so fast SHORT sellers!

After last weeks "bounce" in the market swing traders were waiting for the next opportunity to present itself to get SHORT once again.

The market showed signs of losing steam with an inside day chart pattern on Monday. Tuesday the trading volume picked up a bit as the market drifted a bit lower.

Wednesday (blue arrow on the chart above) was the day the changed the short term sentiment in the market.

That was the day that short term traders got triggers to SHORT once again only to see the market reverse to the upside and close near the high.

This reversal day price action showed that the BUYERS were back in control!

We are still in a DOWN trend but this latest move brings the major indices back up to their 50 day SMAs.

Will the drift higher continue or will the 50 day become the next area of resistance?

Next week we should know the answer.

There are plenty of strong stocks out there that should be on your Watch List.

$VMC, $V, $CREE, $FB, $MA and $LEG to name a few.

$LEG - Swing Trading Strategies

On the SHORT side the list is HUGE!

Be prepared for whatever the market throws your way!

Until next week…Good Trading to YOU!

Swing Trading Week in Review – November 2, 2012

Sunday, November 4th, 2012

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$DIA - Swing Trading ETF

**Our thoughts and prayers go out to the victims of Hurricane Sandy**

After a historic decision to close the US Stock Markets both Monday and Tuesday we opened up on Wednesday with a bit of uncertainty.

Low volume was the theme even as the market popped a little on Thursday.

Friday brought out the sellers again and starts what appears to be the next leg down in this recent down trend.

If you at the charts you can see that volume increased and the bearish engulfing bars created on the three major indices are down right bearish.

The one bright spot this week?

The Homebuilders ($XHB) actually traded to a NEW HIGH despite the overall bearish conditions.

That is about as good as it gets since almost every other sector sold off with the market.

A few weeks back we mentioned that the Gold and Silver sector ETF's were losing steam.

Friday both sectors got hammered!

$GLD - Gold Sector ETF

The technology sector and the tech heavy NASDAQ have been the worst performers with no end in sight.

The Energy and Oil sectors look like they are heading lower.

The chart of the Financial ETFs look interesting.

$IYF - Swing Trading ETF

Will this lower high lead to a head and shoulders pattern on the charts?

Time will tell but learning to spot patterns as they form is a key to trading price action.

Next week should be a big week in the market and you should expect some volatility.

Have a plan in place and trade it accordingly.

Keep the victims of Hurricane Sandy in your thoughts and prayers and as always…Good Trading to YOU!

Swing Trading Week in Review – October 19, 2012

Sunday, October 21st, 2012

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And DOOOOOOOWN we go…

This week traders watch the market roll over and finish out the week with DJIA dropping over 200 points.

After a bit of a retrace to start the week the NASDAQ got rocked again!

I'm sure the earning news from Google ($GOOG) didn't help matters at all.

The chart of the NASDAQ is a classic chart pattern that shows the relative weakness we were looking at.

Thursday price action and volume confirmed the next move lower and let us draw our new accelerated trend line.

On the flip side a few sectors actually did quite well this week.

The Homebuilders ($XHB) actually traded to a NEW HIGH this and  the Financials ($XLF) popped nicely early in the week.

The Energy and Oil sectors ($XLE $OIH) broke out of consolidation this week but were also met with a big day of selling on Friday.

The Tech sector (including the Semi's) continued to get whacked this week.

Both $XLK and $SMH traded to new multi month lows on Friday.

Gold ($GLD) and Silver ($SLV) continue to sell off after putting in a telltale "lower high" last week.

The amount of SHORT setups we saw this week were a good indication that the market was turning.

$AAPL was a pretty text book short.

The interesting thing here is that despite the hard sell off we saw this week there are still loads of stocks holding up.

This relative strength keeps us looking at both sides of the market for trade opportunities.

If the Dow and S&P follow the NASDAQs lead we will see how these stocks handle the heat.

Another sell off that brings these two indices below their 50 day SMA's would have us focusing mostly on the SHORT side but until then we will actively look at both sides of the market.

Will the market follow through to the DOWN side of find some support this week?

No one know for sure so be prepared for either option.

Until next week…Good Trading to YOU!

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