Swing Daily System

Swing Saily System is based on support and resistence with pattern of price.
Time Frame daily.
Currency pairs: any.
Support/Resistance levels may be horizontal on a chart, but they also may follow a trend and move up or down as the trend does. To clarify this let’s look at some charts.  
Swing Daily System
Looking at the chart above, the top line indicates the resistance level. These are easy to spot because they tend to be a level on the chart where whenever the currency pair hits it, the pair immediately turns around and starts declining. In the screenshot shown, the currency pair actually broke out above the resistance level for a time (likely triggered by a news event), and then dropped back down below it a couple of hours later. The bottom line indicates support levels. This is the price point where the currency pair tends to hit and then immediately turns around and start to climb again. With many charts, the support/resistance levels will be horizontal across the chart, but they don’t have to be. In a strong up trend or down trend the levels can also move with the currency pair:  
Swing Daily System
In the screenshot above the currency pair is in a strong down trend. From the steady decline, the resistance level is also declining with the currency pair. There are still definite points where the currency pair touches the resistance level and immediately retraces, but in this case each time the price point of the resistance level is lower than the time before.
Straight Bars
The next thing you need to be able clearly identify is what I like to call a straight bar. You may also hear these referred to as pin bars. The basic idea here is a single bar where the open and close prices are close to the same point. There are two types of straight bars. There are bullish bars where the price opened and closed above the midpoint of the bar, and there are bearish bars where the open and close points are below the midpoint of the bar. Straight bars look like this:  
Swing Daily System
It’s important to note that they may not always be as straight as shown above. As long as the price has opened and closed above the midpoint or below the midpoint it can be considered a straight bar. In other words, they may also look like this:  
Swing Daily System
These types of bars, when used in conjunction with a support/resistance level can be excellent indicators that a reversal is about to take place. If we have a bearish straight bar that coincides with a resistance level it gives us an indicator to sell. In the case of a bullish straight bar that has also reached a support level, we get a buy indicator. This simple system is an excellent way to take advantage of swings (and/or reversals) in price of any currency pair.
In the chart below, the day has closed with a bearish straight bar. Plotting our resistance level we can see that the currency pair has also just hit that level. This is a clear indicator that a reversal (swing down) is about to happen.
Swing Daily System
Entry Signals and Stops Since we are using both bullish and bearish bars with this trading system, and each coincides with a different type of trade, let’s look at both long trade signals and short trade signals. The rules are basically the same for entry, just backwards for each type of trade (long or short). Long Trade Signals To get a long trade signal, three things must occur: 1. On the chart the previous day’s close resulted in a bullish straight bar. 2. The currency has just hit a support level. 3. The currency has been moving down for at least 3 days prior. Looking at the chart below:  
Swing Daily System
The previous day closed with a bullish straight bar. The currency has also just hit a support level. If I could show the whole chart, this is actually a long term support level and the currency pair has been bouncing off it for about 2 months. Also the currency pair has been trending downwards for about two weeks prior. This gives us an entry signal. To enter the trade, we set an entry point using the midpoint of the straight bar. We set out stop 5 pips back of the low point of the straight bar (the red line shown below).  
Swing Daily System
Short Trade Signals For short trades our entry signals are the oppisite of a long trade. We are looking for: 1. Previous Day has closed with a bearish straight bar 2. Currency has just hit a resistance level 3. Currency has been in an uptrend for at least 3 days prior To put it on a chart:  
Swing Daily System
In the char above, the day has closed with a bullish straight bar. The currency has also just hit a long term resistance level (I also could have drawn the resistance line from the current uptrend).
Exit Rules To exit this type of trade I prefer to use a trailing stop. My stop would be set to trail at the same level as I originally set it. If I set a 50 pip stop from my entry point, then I would trail my stop at 50 pips.
Swing Daily System
In the example above, the bullish bar that gave me my entry signal is 80 pips in length. With a stop set five points above the bar, and an entry point sat at the midpoint that means I am risking 45 pips when my entry point is hit. To exit this trade I simply trail my stop at 45 pips until I stop out. Using this exit method you will sometimes be able to squeeze 500 pips out of the market in just a few days time. Other times you will stop out the same day with a small profit, but it all works out to move your account forward.
Long Trade Example To begin with let’s look at some long trade examples. Just to point it out there are actually two entry signals on the chart below. We will focus on the first one.  
Swing Daily System
Looking at the first entry signal above, we have: • The day finished with a bullish straight bar. • The currency has just hit a long terms support level. • The currency had trended down for about a week. This gives us a good buy signal so we set our entry point and out stop.
The bar that gave us the signal is 127 pips in length. It’s midpoint (our entry point is 1.5475. From that we set our stop 127/2 = 63.5 + 5 pips back = 68.5 (or just 68) pips from our entry point. Our initial stop is set to: 1.5475 – 0.0068 = 1.5407 The price then retraces and our entry point is hit:  
Swing Daily System
In this case for two days the currency pair starts an upward climb. With our stop trailing at 68 pips, we end up stopping out on the third day at 1.5537. Our profit on this trade is 1.5537 – 1.5475 = 62 pips.
Short Trade Example To look at an example of a short trade, looking at the daily chart for the USD/JPY on the following page, we have: 1. The day closed with a bearish straight bar. 2. The currency has been in a climb for the prior 4 days. 3. The currency has just hit a long term resistance level.  
Swing Daily System
From that we set our entry point for the mid-point of the bar. Our entry point is hit with a slight retracement (#2), and then we stop out a couple of days later (#3). Taking a closer look at how this trade went: Our entry point is set at 119.94, and our initial stop is set to 120.28 for a risk level of 34 pips. So we trail our stop at 34 pips.  
Swing Daily System
In this case the currency pair made a steady decline for two days straight, and we end up stopping out at 118.23 on the third day for a profit of 119.94 – 118.23 = 1.71 or 171 pips.  

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