Taz Trader Blog
Swing Trading Tips and Strategies
This is my personal swing trading blog featuring the Traders Action Zone strategy. Here you will find swing trading tips, stock market news, trading ideas, and general technical analysis information.
Written on 01-07-2009 10:00 am by Craig
Was This Just a Lucky Swing Trade?
If you dump a stock right before it tanks, did you get lucky?
Maybe and maybe not.
Sometimes intuition is just a better gauge of what to do and what not to do. After you have been trading for a while, you just tend to get a feel for things that can't really be teached. This is where "luck" comes in.
Here is an example of a trade I made that illustrates this point.
I bought SPR on 6/17 near the end of the day at $14.75 after multiple down days with a T-30 chart pattern and gap fill. The market was down on that day and was short-term oversold. I was excited to trade this stock and if you look at the hourly chart, you will see why...
This stock was in the process of forming a reverse head and shoulders pattern. And if you look at the "head" part of the pattern, you can see that it tried to break down but quickly reversed (no follow through), which is bullish. I expected a move higher, so I bought the stock.
But there was something on the daily chart that I really didn't like. Look back up at the first chart. Can you see it?
It's this:
This stock gapped up, after an already extended move to the upside. This is a gap caused by amateur traders - not professionals. And it a very good sign that the trend is coming to an end. Also, the stock didn't move very much on the gap, and it was a high volume day (churning).
Not a very good sign for the continuation of the trend!
This stock moved up a few days and I dumped it on 6/19 at $15.29 - right before the gap down. There was no reason to mess around with trailing stops since I didn't think the trade was going to last very long anyway.
Some would say that this was just a lucky trade.
And I would say...
Luck is the direct result of hard work.
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Written on 06-06-2009 5:56 pm by Craig
I Really Wanted to Trade This Stock
I included a small hourly chart (inset) so that you can see what I was looking at. The stock was building support with a triple bottom pattern. I was convinced that this stock was going to move much higher.
But, I didn't trade it.
The market was a too overbought for my liking. And I know from experience that buying stocks in overbought markets is generally not a good idea!
What are your thoughts? Would you have traded this stock?
Leave a comment below...
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Written on 21-04-2009 4:49 pm by Craig
Trader Vic's Trend Change Example on S&P Hourly Chart
How do you tell if a trend is going to change? Use Trader Vic's rules for a trend change...
- A trend line is broken
- The trend stops making higher highs.
- Price falls below prior low.
Here is an example of these rules on the hourly chart of the S&P 500:
The first rule has been met. There has been a trend line break. Now we are watching for the "retest" of the previous high (top highlighted area). If it fails to move above that area then rule #2 will be met.
Then, if it falls below the prior low (highlighted area), it will be a confirmed change in trend. From the book...
Either of the first two conditions alone is evidence of a probable change in trend. Two out of the three increases the probability of a change in trend. And three out of three defines a change in trend.
I really, really want this market to pull back a little more!
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