subject: Swing Trading Trends Requires Accurate Entry And Exit [print this page] Trend is your friendTrend is your friend. You must have heard it too often. Swing trading trend is one of the most profitable strategies that traders use. When a trend starts, once you have made the entry, you don't have to do a lot to manage your trade. If it is an uptrend, the price will continue to rise and in case it is a downtrend, price will steadily fall. As compared to range trading, trend trading is more profitable. Ride the trend as long as it lasts.Entering a trend early in the first few days allows you to enter when the risk is lowest. Entering a trend when it is already weeks or months old raises the chance of your getting on when you should have been getting off. The difficulty in trend trading lies in identifying when a trend has started and knowing when to get off quickly when the trend is over.So the biggest risk for a trader engaged in swing trading trend lies in the possibility of entering a trend when it is just about to end. Someone has described this phenomenon of entering late in the trend as like a dog chasing speeding cars. It may be fun for sometimes but eventually the dog will get run over by a speeding car.So, minimize your chance of riding a trend that is about to crash. What you need is a trading system that can identify when a trend is late and when it is right to enter the trend. So, you need a couple of indicators or perhaps a few candlestick patterns that can help you identify when the trend is about to start and when it is about to end.ADX ( Average Directional Index) is ideal in identifying the strength of the trend. If the reading is above 20, the trend is going strong. Below 20 means there is no trend, the market is consolidating. You can use candlestick patterns like the doji, the hanging man, the hammer, the engulfing patterns and others even to spot start of a new trend or end of an existing trend. This will put the odds in your favor. Hey, trading is all about putting the odds in your favor. It is not like gambling. You do take risk in trading but the risk is calculated and measured. It is not something that can ruin you.You can also use moving averages or MACD. Another approach in swing trading trends is to wait for the trend to pause and only enter on the day of strength or weakness. Whatever, method you use, make sure you only enter the trend after you have confirmed the trading signal. Combination of indicators and candlestick patterns can be highly effective in telling you when to enter the trend and when to exit.
Swing Trading Trends Requires Accurate Entry And Exit
