Intraday Swing Trading

Posts Tagged ‘Intraday Swing Trading’

Day Trading Strategies – Intraday Swing Trading Strategy

Thursday, June 14th, 2012

Swing Trading Boot Camp – Day Trading the Intraday Swing Trading Strategy

We thought we would take this opportunity to walk you through one of our day trades from this morning.

Our Intraday Swing Trading Strategy is very similar to our overnight swing trading method.

We use relative strength to locate and trade strong stocks (or ETF's) when the overall market is strong.

This morning was a good example of locating a sector ETF ($XLE) that was showing signs of relative strength AND also had a great chart pattern to trade.

Here is the first chart for $XLE…

XLE - Day Trading Strategies - Intraday Swing Trading

Notice how on the chart above $XLE broke out to new highs in the early morning and rallied up until a little after 10am.

After a brief pullback $XLE was setting up again for a nice LONG trade. A move to the upside on increased volume was the confirmation we needed (BLUE ARROWS).

Our trend line was drawn in and we let the trade progress.

On the chart above you can see how $XLE rallied to new highs again putting in 2 channel expansions before the "stall" (equal bar high) marked in orange.

This entire move happened on decreasing volume so we were on high alert looking for the signs of this move reaching its potential.

The"stall" was followed 2 bars later by a new high but this bar quickly reversed course and put in a bullish engulfing candlestick.

This bar combined with the failure to reach the top of the channel is a good sign that the move has come to an end and a good time for us to exit our trade.

The next bar followed through to the downside but we noticed that volume was drying up.

The bar after the bearish engulfing bar reversed and closed near its high. Two bars later a new breakout was underway.

We didn't want to enter into a new LONG trade at this point since the move in $XLE was already extended a bit.

Below you can see how the new breakout stalled and basically traded sideways for the next 6 bars before finally breaking down and out of the upward trending channel.

Even if the new breakout would have continued we aren't really concerned about it.

We are NOT trying to catch every single bit of every move.

For our STS trades we typically set our target at a 2:1 risk/reward ratio and are very happy taking our profits at this level just as we did here.

As day traders our intraday swing trading strategy helps us locate (and hopefully profit from) price "swings" in the market just like you see here.

We hope this sheds some light on the strategies and tactics we use to trade the market day in and day out.

Until next time…Good Trading to YOU!

Tags: Day Trading Strategies, Intraday Swing Trading, Swing Trading Price Action, Swing Trading Strategies
Posted in Day Trading, Intraday Swing Trading, Swing Trading Chart Patterns, Trading Price Action and Volume | No Comments »

Intraday Swing Trading Stocks and ETF’s

Tuesday, February 14th, 2012

Swing Trading BLOG – Swing Trading Boot Camp

Today I thought I would take some time to show you some examples of our Intraday Swing Trading strategies.

Lets first take a look at the Diamonds ($DIA) to see how the market started out this morning.

In the chart above you can see how the market GAPPED DOWN opening well below yesterdays close.

You can then see the two bars after the open are "inside bars" and this gives us a nice pattern to trade once we get a breakout.

We always wait 15 minutes (3 bars) to allow the market to establish itself before we look to enter into a trade so this was a good setup for us.

As volume starts to pick up Bar #4 creates a BREAKOUT to NEW HIGHS.

Both price action (3 bar break) and increasing volume are exactly what we need.

We looked around and there were plenty of stocks with a similar pattern to trade.

Along with $DIA $CREE stood out as a LONG trade to us with a nice pattern and defined risk.

Again the price action was good and volume was increasing.

The overall market (and $CREE) continued higher but then stalled out bit.

As an Intraday Swing Trader you have to nimble and and react quickly when the market shows signs of changing gears.

This type stalling action we see after a GAP DOWN is a flashing caution sign for us.

At this pivotal point of change you also need to scan the market to locate potential trading opportunities.

When the market "stalled" we began looking for stocks that were weaker than the overall market (relative weakness) and found $PCAR and $PPO.

Both stocks GAPPED DOWN with the overall market but never rallied to new highs when the market did.

Both stocks also created a very nice "lower higher" setups after an orderly retrace from their initial low of the day.

As the market begin to fall apart the selling volume started to accelerate in $PPO and $PCAR triggering trades in both stocks.

Our LONG trades were not looking good but we actually got out of $CREE with a profit.

Once the market broke to down to NEW LOWS we were now in SHORT mode.

Both $PPO and $PCAR pushed lower as well before showing signs of a retrace.

A few bars later and after a retrace off of the lows the $DIA was setting up for a move lower.

$CREE eventually sold off with the market pushing down to a new low for the day.

$CREE was also now setting up nicely for a good SHORT trade.

The "lower high" was established and we were now able to draw our DOWN TREND lines to create a nice channel for context.

This is classic PVT trading!

$CREE followed through nicely to the down side and created a "lower low" as the sellers stepped in.

$CREE pushed through the bottom of the channel expanding it a bit before showing signs of a retrace.

The price and volume action on the last bar in the chart below shows tell tale signs of the move coming to an end.

Since we only trade the first two and last tow hours of the day we were now "flat" as the market began to retrace just after 11am.

Here is a summary for our morning.

We went from LONG to SHORT in a few stocks and identified stocks that were weaker than the market.

Once the market "stalled" and began showing signs of breaking down we took trades in these "weaker" stocks.

The market followed through to the down side and these weak stocks sold off nicely.

After making new lows the market setup for another move lower which allowed us to enter into several new trades that worked out as well.

Hopefully this walk through gives you some insight into how we swing trade intraday.

Tags: Day Trading, Day Trading Chart Patterns, Intraday Swing Trading, Swing Trading Intraday, Swing Trading Price Action
Posted in Day Trading, Intraday Swing Trading, Price Action Trading, Swing Trading Blog, Trading Price Action and Volume | No Comments »

Intraday Swing Trading Strategies

Wednesday, August 25th, 2010

After receiving numerous inquires about the day trading techniques we use to "Swing Trade" on an Intraday chart we thought we would post a few examples from today's trading session.

Although "Swing Trading" in generally used to define an overnight strategy you can view this article to understand how we define "Swing Trading" for day traders.

Although the overall market (DJIA) finished up a mere 19 points today the intraday price swings and volatility offered plenty of opportunity for "Swing Trading" on the 5 minute chart.

Here is the 5 minute chart of the Diamonds (DIA)…

You can see from the chart above that the overall market GAPPED DOWN a bit and rolled over into the 10am number.

After the number came out the market attempted to push lower but ended up putting in a higher low just after 1030am.

After this higher low we rallied to NEW HIGHS for the day only to stall around lunch time.

Just after 2pm we again pushed to NEW HIGHS for the day and then had nice afternoon rally until the last 10 minutes of trading when we saw a the market retrace into the close.

So now that you see how we viewed the price action and chart patterns for the overall market let's take a look at some of the individual stocks and ETF's.

Since the SHORT TERM trend in the overall market was DOWN and we GAPPED DOWN we were looking to the SHORT SIDE as we rolled over on bar 3 (9:40-9:45am).

As always though we are constantly scanning the market to see which stocks are showing relative strength and which are showing weakness.

The first trade we put on this morning was in St. Jude (STJ)…

Due to the daily chart and recent news in this sector we had STJ on our Watch List this morning.

As the market moves higher on BAR 1 you can see how STJ reverses intrabar and closes near its low on the same bar.

On BAR 2 the market moves to NEW HIGHS temporarily only to rollover and close near its low and STJ creates a small "inside bar" and hardly ticks ups at all.

A good sign of relative weakness (for now).

As the overall market continues to rollover to NEW LOWS on BAR 3 we had a nice SHORT setup in STJ.

For this 3 bar chart pattern we set our INITIAL STOP .01 above the high of BAR 2 at $35.

Our entry price was a few cents below the low of BAR 2 at $34.90.

We set our profit target at $34.70 and we were able to cover our position as STJ pushed lower just prior to the morning number.

Another stock that showed some obvious relative weakness this morning for us was Mosaic (MOS)…

MOS rolls over with the overall market right into the 10am number.

After 10am MOS and the overall market put in a 2 bar retrace until the 10:10am bar.

We are still looking for SHORT trades at this point since the market has pushed to NEW LOWS for the day and has now retraced.

As the market stalls and trades sideways MOS starts to head lower.

This is a classic INTRADAY SWING TRADE!

The text book lower high in MOS offered us a nice opportunity to get SHORT in an attempt to profit from the next DOWN SWING in price.

Our INITIAL STOP placed .01 above the lower high at $56.28.

Our ENTRY was just below the LOW of the bar that created the lower high at $56.02.

This set our initial risk at .26/share for this day trade.

We covered our SHORT at $55.36 (for a little over 2.5/1 reward/risk ratio) as the overall market confirmed its higher low on the 10:35-10:40am bar.

As the market confirmed it's higher low we had several strong stocks that we were watching.

Notice how the price action of these stocks differ from the weak stocks above.

The first stock on our LONG list was Research in Motion (RIMM)…

Notice first how RIMM GAPS UP on the open as the overall market is GAPPING DOWN.

Also unlike the overall market RIMM heads straight up until the 10am number while the market is headed straight down.

A good sign of strength wouldn't you say?

At 10:40am as the market is confirming its higher low RIMM has retraced off of the high and is now set to possibly head to higher highs.

RIMM gave us a nice setup on the 10:55am bar as the market took out the 10am high and started to head up.

Our INITIAL STOP LOSS was placed .02 below the LOW of the 10:50am at $47.70

Our ENTRY PRICE was .02 above the HIGH of the same bar at $47.84 for an initial risk of .14/share.

We were able to EXIT our trade at $48.24 (2.85/1 R/r) as the overall market and RIMM began to retrace.

This is another classic example of day trading the INTRADAY PRICE SWINGS in the market!

And for our last example let's take a look at the chart of Harman Intl (HAR)…

Notice the relative strength in HAR this morning as it never traded to new daily lows as the market rolled over on BAR 3 this morning.

The first LONG opportunity in HAR came during the bar at 10am.

As the market began to retrace at 10am HAR created a bullish engulfing bar and traded to a NEW HIGH for the day.

If a stock moves to NEW HIGHS for the day prior to the market doing so it is a sure sign of strength and a stock to watch if the market continues to push higher.

The second opportunity to get LONG in HAR was the 10:40am – 10:55am bars on the chart.

This chart clearly defines an intraday UP trending stock.

Relative strength right from the open and then a series of price swings that create HIGHER HIGHS and HIGHER LOWS.

Here is the chart with the Swing Highs and Swing Lows marked.

When the market cooperates strong trending stocks like this often give you additional trade setups when the afternoon session rolls around.

The breakout at 2pm and getting LONG just after the 3pm pullback were two more opportunities to profit in this stock.

The afternoon also offered up several more LONG trade setups for us as the market headed to new highs.

Some of the other stocks we traded after 2pm were CREE, LNC, WMT, ANF, AKAM, CLF and WYN.

We hope this post provides you with some insight of how we "Swing Trade" on an INTRADAY price chart.

If you have any questions or feedback please leave us a comment below and as always…Good Trading to YOU!

Tags: Day Trading, Day Trading Chart Patterns, Day Trading Price Action, Day Trading Strategies, Intraday Swing Trading
Posted in Intraday Swing Trading | 2 Comments »

Saturday, June 12th, 2010

Can you "swing" trade intraday?

This seems to be a question that comes up a lot.

"Swing Trading" is typically defined as…a method or strategy used to profit from short term (1-4 day) price moves in the market.

Although the standard definition defines the typical length of time in a trade (1-4 days) another definition for "Swing Trading" is used to describe a method or strategy used to profit from "price swings" in the market.

This definition can be used for a trading strategy or method regardless of the time frame.

A "price swing" is used to describe the ebb and flow of price action.

As price moves from one point to the next it typically does so in back and forth wave like motions.

When price moves from a low point on the chart to a higher point this is typically identified as an "up swing".

The opposite is true for a "down swing" in price.

In the chart below we have identified the UP price swings with a BLUE arrow and the DOWN price swing with an ORANGE arrow.

The alternating "swing" extremes are further identified as "swing highs" and "swing lows" once they begin to retrace from their highest or lowest point.

Here is the same chart with the "swing" highs (black horizontal lines) and "swing" lows (blue horizontal lines) in place.

Swing Highs and Lows - Swing Trading Price Action

So now that we have the terminology and definitions out of the way lets get back to the original question.

Using the second definition of a "Swing Trader" you can surely see how a day trader can trade the "price swings" in the market.

In fact in the two charts above you probably cant even tell if they are DAILY charts or INTRADAY charts since the price and time data has been removed.

Our main strategy for overnight Swing Trading is based on locating strong or weak stocks (and sectors) in relation to the market and trading these stocks (and ETF's) based on the context of the overall market conditions.

When we trade the "price swings" intraday we use the exact same strategy!

If the market is strong we are scanning the market looking for the strongest stocks and ETF's.

Once we locate thees strong stocks we then use technical analysis (price action, volume and trend lines) to locate and hopefully profit from the intraday "price swings".

We want to be in sync with the market so if the market has run up (UP swing), retraced (DOWN swing), we are looking for LOW RISK trade setups in the strongest stocks and ETF's.

That way if the market decides to make another UP swing we can enter into and hopefully profit from this next price swing in the market.

On the intraday (5 minute) chart below of AKAM you can see the first UP swing as price rallies from the open all the way up to just under $43.50.

AKAM then heads lower (retraces) creating a DOWN swing (orange arrow).

Overall the market was strong and the strength in AKAM from the open was obvious.

We are then anticipating another UP swing in AKAM if and when the market starts to show some signs of also moving up.

We were able to enter into this intraday swing trade in AKAM just over $43 as the new "swing low" was put in place and the next UP swing in price began.

Although we are never sure how long the next "price swing" will last in this example AKAM ran up to just over $44 ( a one dollar move) before starting its next DOWN swing.

This is just one example of how you can "swing trade" intraday.

Although they may need some tweaking the potential strategies and ideas that you have for overnight swing trading can surely be utilized on an intraday basis.

Tags: Intraday Swing Trading, Swing Trading Price Action, Swing Trading Strategies
Posted in Intraday Swing Trading, Technical Analysis | No Comments »