Swing Trading

Now, let’s see Wikipedia definition of swing trading, “Swing trading is a speculative trading strategy in financial markets where a tradable asset is held for between one and several days in an effort to profit from price changes or 'swings'. A swing trading position is typically held longer than a day trading position, but shorter than buy and hold investment strategies that can be held for months or years. Profits can be sought by either buying an asset or short selling. Momentum signals (e.g., 52-week high/low) have been shown to be used by financial analysts in their buy and sell recommendations that can be applied in swing trading.” And they continue, “Identifying when to enter and when to exit a trade is the primary challenge for all swing trading strategies. However, swing traders do not need perfect timing—to buy at the very bottom and sell at the very top of price oscillations—to make a profit. Small consistent earnings that involve strict money management rules can compound returns over time. It is generally understood that mathematical models and algorithms do not work for every instrument or market situation.”

Well it seems that I have been “swing trading” for a while now, because with short term and smaller profits is how I made my bread and butter. If I may give some advice is this, stocks don’t trade in a vacuum, well at least most of them, swing your trades trying to follow the general market and group, and maybe, just maybe you have a fighting chance.

Let’s take a look at my two last trades, which I made trying to swing with the group.

DTE is a utility with earnings expected to be announced before market hours on 24/10. Its yield is a respectable 3+%.

On Oct 18, even though it closed negative, DTE defined a very short term support at 110.5 after forming a new “higher low”, momentum was building.`

I put my buy order at 110.80, breaking a little resistance, at market close.

Next day my trade worked wonderfully, and I finish the day with a 1% profit, the stock weakened a little at days end but still I kept my trade.

And this is right now, my 110.5 stop loss is kind of far, but various things I don’t like.

45 degree uptrend line broke

0.618 retracement reached; don’t like it, profitable swings should hold way above this line.

Tomorrow is the last day before earnings, should I hold?, get out without a loss?, uhm, I’ll wait for today’s last trading hours maybe.

Shalom alle,

SPY 25 may 2018

While the price is stuck in a trading range for a week, the stochastics are making lower highs.

Still the price above the ema(21) is kind of bullish, let’s keep our focus in the box, remember if the reaction is on the down side, those moves are quick.

Shalom alle,

La situación de los mercados hoy a media mañana

Esto es lo que se puede definir como un campo minado para los cortoplacistas, el SP500 con una serie de close contrarios a los open del día, por 8 largos días se empeña en no mostrarnos dirección haciendo muy pero muy difícil el trading a corto plazo.

El Dow Jones actualmente hizo un nuevo high el 21 de mayo, para casi inmediatamente devolverse, un verdadero bull trap. Ahora mismo está coqueteando con su low del 16 de mayo.

El Russell no encontró resistencia desde el 15 de mayo a diferencia de los big caps que estaban sumidos en un trading range. Ha formado 2 areas de soporte-resistencia bien definidos.

En estos tipos de mercado es que los cortoplacistas somos castigados, vamos a ver si se aclara la dirección, sin embargo, cuando los diferentes mercados están en desarreglo por lo general el mercado se “arregla” hacia abajo.

Gracias Dios por tus bendiciones

Shalom all,

The perks of being a short term trader

In my last post on April 25^th I mentioned being long WEC because it was “accumulating”, this is what happened the following days.

WEC broke in an uptrend that took it past my 63.5 target to a close of 63.71 3 days later.  Of course I took my 1% plus profit.

Then WEC “distributed” for five more days, still plenty of time to take profits.

After that this happened with WEC stock, it went down and now is trading below my entry point. Now, being a great company, WEC will start at some time going up again, but before that, if I had not take my profits,  I would be looking for some time at losses in my brokerage account, and that is really a loss of confidence factor for a trader.

But that was then and this is now

Remember your technical analysis 101, the phases, accumulation, distribution etc., sometimes distribution is not followed by a decline, instead we thought it was distribution but really it was a new accumulation phase, well, right now for the past 4 days the market is either accumulating or distributing, who is to know?, the important thing is to react when we know.

For that I have two ideas that can be either accumulating or distributing, look for the breaks and act accordingly.

Thanks God for all the blessings

Shalom all,

Market down Stocks Up

I always pay attention and frequently trade stocks that go in different direction from the market, some times when the market change direction these stocks are the most profitable in the short term move.

Take these two

Toronto Dominion has been moving with the market rhythm for the last 3 months. You can see it in the charts. Clockwork identical moves.

But for the last 4 days as the market keeps on making lower lows, TD is making higher lows. Now, if the markets are nearing an oversold position, TD could take advantage of the possible rebound.

WEC made its lowest together with the market in February, after early march when that low was tested, it has been in a slow uptrend, now it is yielding over 3%. Kind of stuck for the last month.  It can goes up to 63.5 for a quick> 1% gain.

I am long both.

Thanks to God for all

Shalom everyone