by Victor Santana
(Cypress, CA U.S.A.)
Looking for an edge? Want to capture profits on short-term swing-trading? Consider using the CCI(5) which is a leading indicator. I've been using this the last 3 years with an average of 80% accuracy rate. This system will remove the confusion when to enter and when to exit. Here is how it works:
1) Trade with the major trend. Find out if the market is in a Bull trend or Bear.
2) Using the CCI(5) on the daily chart, look for setups. In this example we will assume the Market is in a uptrend (Bullish). Look for stocks trading under the -100 zone which is considered your setup.
3) Place a buy-stop order slightly above the high for that day. If the next day the stock trades higher, it will "Trigger" you in on the stock. When you are "triggered" in, place a sell-stop below the last pivot low.
4)Once the CCI(5) reaches above the 100 zone, you will sell half of the position to lock in some profits and move your sell-stop at your entry position. If the stock continue to go higher, simply move your sell-stop to the last day's low.
1. Don't Trade against the trend (unless you are a seasoned swing trader)
2. Don't use no more than 10% of your trading account on any one trade.
3. Don't try to second guess where the tops or bottoms are. Let the "shift in momentum" trigger you in.
** If you'll like to see some actual trades with charts, then I invite you to follow me on Twitter. Look for Stock Hunter (red bull icon).