* Trend Swinger Trading System
ENTERING JAUNTILY THE NEXT TREND
Welcome to Trend Swinger, a trading system for the stock market. The
trend is your friend and trend trading can be the most profitable form
of trading. Trend Swinger is trend trading and swing trading. It is
all about entering jauntily the next trend. Let's start with the first
question in trading, which is:
WHEN TO GET IN?
* Is it right to buy into falling prices or better to wait for them
to stabilize?
* Could it be necessary to wait a little longer and buy only the
first move up after a fall?
* Should one chase rising prices or even wait for a base after a
rise?
* Does waiting still a bit longer for a restart of the trend after a
pause give the needed addtional boost?
* Or perhaps ignoring price action and concentrating on fundamentals
is the best thing to do?
The answer is: It depends, but not on the situation. Instead, it
depends on the trading system you use, which should be clearly aligned
to one or the other style. In other words, one can make money in the
markets with cyclical and anticyclical systems. Just don't try to mix
one method with the other.
TREND TRADING MEANS GOING WITH THE FLOW
Almost by definition procyclical behavior is mandatory for trend
traders. The Trend Swinger trades at the current high, for short-term
entry situations and also for longer terms. This has two advantages:
* The probabilities at the start are skewed to the trader's favor.
The high indicates a running trend, there is pressure that drives the
price further and makes an entry easier.
* There is a trend at all, which means prices are moving in the
right direction, perhaps for a longer time. The cyclical method is the
faster way to become rich. Anticyclical traders are more investors.
They generally need a long life.
The longer trend and fundamentals do matter for a sound system.
Stocks could be traded solely on a day trading basis, but that means
giving up most of the possible gain. The real money is made by holding
when things go well and riding a trend for many month that at its best
finally overshoots by a wide margin.
That is why fundamentals are important. Like prices, which run away
once they have gained momentum, revenues and earnings of companies
that rise do this often with a remarkable constancy. We have a growth
stock. It pays off to take rising revenues into account. Over all
concentration on such stocks will yield better results even if the
targeted time horizon of holding periods is much shorter.
ADVANTAGES OF STOCKS
One of the beauties of stocks is that they are essentially options
but without the expiration date. At least this is true for stocks on
the move. It is possible that they multiply their value by a large
factor, and yet, they can't go below zero. This alone is highly
interesting, because it offers the possibility of a random trading
system, just driven by stronger moves upwards than downwards. Of
course this effect only becomes noticeable if you hold a stock for a
longer time. Day traders go away empty handed.
Another fine thing about stocks is that there are stock markets, by
which I mean that there are thousands of possible trading candidates.
Compare that to Forex or futures. Together with ETFs, some of them
being short-instruments and others matching foreign markets or
commodities, there is always something to pick. Without the need to go
short you can still enjoy the option-characteristic of stocks.
WHY A SYSTEM AND WHY RULES?
Strict rules in a trading system are important because there is
psychology involved. Experience tells that a system that concentrates
either on cyclical or anticyclical methods and doesn't try to mix
them, is far more easy to apply. A system whose elements are uniformly
supporting either one or the other style is enormously helpful. There
are more than enough reasons to get confused by the markets alone.
Psychology is the deep problem of a trader. He needs a trading system
as a foothold for combating uncertainty.
The most basic rule for the concrete trading is the stop-loss. This
is the ingredient that makes cyclical trading what it is, meaning it
is far more than just keeping losses in check. If you enter a position
and don't get stopped out, you are on a trend. If you get stopped out,
the trend has come to an end. This is of course a simplified and
probabilistic view, but it shows how a rule of a trading system steers
the trader into the right direction.
For anticyclical investing a stop-loss is devastating, because it is
contradicting the idea of buying as cheap as possible. This is a fine
example where in trading the right element can be in the wrong system.
WHAT IS A TRADING SYSTEM AND WHAT IS IT NOT?
A trading system must be self-consistent. All parts of the system
must fit together. Something that doesn't fit, while it may be the
right thing for another system, is like a grain of sand in the
machine, the money machine that is. So, is there a money machine? Not
only that there is one, there must be one, otherwise you could have no
system and trading would be only gambling.
Of course this machine can't serve everyone. As common sense tells,
there will only be few who can exploit a specific system. A system
that is trading the high and overshooting prices has fortunately a
relative large capacity and is able to support quite some people's
desire for success.
Trading at the high means also something else. The Trend Swinger
system only buys stocks long and doesn't go short. Together with the
rules to allocate the trading capital to the right number of stocks
and not to use margin, at least not overnight, it more or less assures
that you can't go broke. Money management is the part of a trading
system that should be nothing but a pure machine.
Of course even the best system and the best money management can't
guarantee that a trader will not incur losses, contrary to what so
many want to believe or want to make others believe. If that is not
clear to you, please read my .
THE MARKET AND ITS SYSTEM
Astonishingly, chances that prices go in the right direction relative
to the wrong one are almost always about 50:50. The best bet for the
price some time ahead is usually the current price. This is the
universal law of the market and, whereas I hesitate to add this here,
it is almost independent of any feelings and ideas you might have
about a bias of the future price direction!
The reason is the market itself. In most situations prices are near
an equilibrium. Not only that demand matches supply, but also chances
for up- and downwards moves approach each other. The market mutates
its state constantly so that it is hard to figure out. It has to be
this way. But then, how to trade? You probably guessed it by now.
Chances can diverge when the price is on the move. That is why
momentum traders operate at the high.
PHILOSOPHY OF A TREND SWINGER
The basic principle of the Trend Swinger system is to get on board of
an ongoing, starting or restarting movement with a tight stop in a
situation where price pressure gives statistically more often than not
a good start. The preselection of stocks at a longer term high with
rising fundamentals will then do, again statistically of course, its
magic and produce some bigger gains over time.
In short, the Trend Swinger system enters at the day high or near the
high of a short term move and that in a longer term trend possibly
with fundamentals also on the rise. This is the ideal, but in reality
it is more complicated than identifying a buy signal every time the
price is near a high in all time frames.
Prices can get ahead of themselves and become vulnerable to swinging
back. What we need are forces that are not exhausted. Oscillations are
a necessary occurrence in all time frames, otherwise the market would
be too easy, everyone could figure it out and everyone should win,
which is impossible.
Then there is the "magnetic" effect of the whole market. Relative
strength can indicate price pressure even with prices going down. The
ideal of trading at the high has to be adjusted to cope with these
oscillations, random influences and index induced forces.
What about swing trading? Perhaps it could not easily be seen as
cyclical, because the swing trader typically waits for a price retreat
and then for the first turn of the tide. The Trend Swinger system is
also able to trade swings being in a longer trend. This way it
converts the regularity of swings in entry safety and exploits still
the power of the trend, which is a basic method for managing
oscillations. You are a swing trader and you knew this already or find
it simplistic? Well, look at your trading history and see if you
applied your knowledge!
FINE THEORY AND UGLY REALITY
In reality things differ from the ideal and so a trading system needs
some robust rules for dealing with the real world. The classic problem
is an ongoing trend and a trader waiting for a dip. When it finally
comes, the trader gets in but the price doesn't want to swing back and
the trend has topped out.
One of the key elements of trend trading is to get on the trend as
fast and riskless as possible. Ideally the trend is smooth, the swings
are clear, the start is crisp. That would be the easy case, but
reality looks mostly different.
Does searching for specific price patterns in longer ranges result in
high-probability trades? Or do we have to identify specific
fundamental situations for nearly riskless entries? The answer is no.
There is absolutely no reason why the former should work, and while
there may be clear situations of the latter type, they are too seldom.
Chart wizards and fundamental number crunchers, I hear you grunting
now. It may be hard to believe for you, but it doesn't work this way.
There is no way to identify infallable signals or secret patterns
beforehand. Using a trading system is bending statistics to your favor
and not hoping for investing wizardry.
HOW DOES IT WORK THEN?
* The most powerful chart pattern is the trend, because it means
something real. There is a valuation shift underway and that is fueled
for instance by the specific product of a company. When is comes to
forecasting quality, the trend dwarfs all other chart formations and
also comprises all too complex fundamental number exercises. Be able
to judge the trend and the product situation and you will see the big
picture.
* Trading means overcompensating losses with gains. On the
micro-level this is done by having short-term setups with matching
stops that make sense and knowing when to get on a trend.
* _Trend trading_ means literally _trying to enter trends_ while
minimizing many smaller losses in order to be eventually in some
trades that make huge gains.
The Trend Swinger system uses the daily bar chart, because it has a
medium time frame usable for short-term trading and holding a position
for a longer time. The other basic advantage is that daily bars are
the most natural time frame, mirroring our activity during the day and
the pause of the night. If you look at the market through the glasses
of the daily bar chart, you will find more regularities than with any
other time frame.
The daily bar chart is the foundation for the entry patterns of the
Trend Swinger system. These entry setups allow for statistical
advantages exploiting more coherent movements that arise for short
times from a generally chaotic market behavior. Even the atypical
usage of the system for day trading is possible this way.
It is this advantage at the start of a trade that is psychologically
necessary for applying the stop-loss rule. Both combined with the
preselection of stocks with a longer term strength lets traders
operate near the possible optimum.
HOW TO BECOME A TREND SWINGER?
You can get the Trend Swinger system right now and here. It comes as
an eBook in PDF format waiting to be downloaded by you. The system
requires only a short time of work around and after the open to
analyze the situation, get directly in and out of positions and set up
orders for the rest of the day.
Over the years I compiled many short versions of a "system check
list". Then I decided to put work into a real book to have it for
myself and for others, which is the reason why it has its price. No
big deal, as having a price is not unusual for useful things! Your
payment is securely processed by Clickbank and you will immediately be
able to download your personal copy. Refund requests are also
processed by Clickbank. Don't worry, if the Trend Swinger system is
not for you for any reason, I have a 60 day money back guarantee
ready.
On 117 pages I describe detailed and with a compact style all you
need to know to execute the system. Here is an overview of the
contents:
* Short introduction of the basic idea and why the system is
suitable for a short-term oriented trading style like swing trading
and also for riding longer trends or growth investing.
* The preselection of stocks by long-term prospects. After briefly
showing why this is important even for swing traders, the exact
criteria are presented. What are the identifying features in a chart,
the fundamental situation of the company and its product spectrum?
Some long-term charts with revenues and earnings get discussed in
conjunction with products and background to demonstrate with examples
how to gauge the future potential of companies.
* Entry and exit. The technical part of the Trend Swinger system is
made of 13 trading rules, 19 buy setups in 3 categories and 4 sell
signals. Don't try to judge now what exactly this means. This chapter
has an introduction that explains why I have structured the system
like this, how these elements work together and why it works. The
trading rules are simple to understand and easily applied and the same
goes for the sell signals. The buy setups are the more difficult part
despite a precise description of each. But, to get started, you can
concentrate on any subset of them you like. There are some example
charts depicting the buy setups. Most charts show more than one entry
situation and every buy setup gets illustrated at least once. For
traders who like to handle things more flexible, there is a part
devoted to fine tuning the hot entry phase.
* Money Management. This is an important ingredient of every system
and thus deserves its own chapter. With the help of some graphics I
show where the borderlines are, how to maximize results, what you
should never do, and where there is some freedom allowed suiting your
personal readiness to assume risk.
* Psychology is the trader's mine field. The Trend Swinger system is
executed by discrete entry and exit decisions and so its users need to
be aware of the effects of psychology. After a short introduction how
to use this chapter, this difficult topic gets discussed from three
angles. I start with preparations for using the Trend Swinger system
and go on asking the question "What can go wrong?" with a
comprehensive list of possible problems and answers how to counteract
them. Finally the question becomes even more embarrassing: "What will
go wrong?". I think it is necessary to face psychological difficulties
that can't be circumvented. These are the things that make up a
trader's life, and how he handles them distinguishes good traders from
not so good ones.
* However, the technical part of the Trend Swinger system is
designed to be robust. As much as possible I wanted to diminish the
influence of psychology. Still, I think the psychology chapter has its
merits and to finish the book not on the grim side, I have at the end
some encouraging words for you.
You expected more? A method that is easy to use by everyone and
success is guaranteed also for everyone? There is no such thing. It
simply can't exist. Everyone would have to be a winner. The markets
have to be difficult...
That is why I consider the Trend Swinger system to be a good
investment. If you are a trader struggling with the stock market who
feels that there should be more in it for you, it could be even a very
good investment.
All the best,
Focus on the right trend and relax
with the Trend Swinger system
P.S. There are different ways to approach the markets. Many of them
fail or try to gain something where not much is to gain. You are
looking here at one of the most efficient methods of putting money to
work. Other than that, many additional ideas and thoughts complete the
picture and any of these could be the one that completes your trading.
Just follow the light, there will be something in it for you...
TREND SWINGER (tm) The Art of Trading
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