The RSI can be used to identify potential reversals in price. Relative Strength Index ( RSI): The Relative Strength Index is a momentum oscillator that measures the speed and change of price movements. Bollinger Bands can be used by swing traders to identify overbought and oversold conditions and potential reversals. The upper band is typically two standard deviations above the 20-period moving average, while the lower band is typically two standard deviations below the 20-period moving average. Conversely, when prices are below the moving average, it is generally indicative of a downtrend.īollinger Bands: Bollinger Bands are a technical indicator that consists of an upper and lower band. When prices are above the moving average, it is generally indicative of an uptrend. Moving Averages: Moving averages are a swing trading indicator that is used to smooth out price action and help identify the direction of the underlying trend. Some of the most popular swing trading indicators include: Understanding indicators is one of the foundational components of learning to swing trade. There are a number of different technical indicators used to identify potential swing trading opportunities. These swings provide opportunities to enter and exit trades at favorable prices. The key principle of swing trading is to look for price “swings” or “legs” within a larger trend. Stochastic SlowK is greater than or equal to ANALYTIC Stochastic SlowD by 0.Swing trading is a type of short-term trading that is based on technical analysis of price charts. To look for a bullish stochastic crossover, use this scan: The second rule helps to ensure that the cross occurred within the past day or two. Moving Average Convergence-Divergence is greater than or equal to ANALYTIC MACD Signal You can set up a scan for a bullish MACD cross like this: Importantly, these two indicators are measuring different things: MACD looks at how two moving averages are changing with respect to one another, while the stochastic oscillator looks at how a stock is priced relative to its recent trading range. But, you can also use the Stochastic oscillator to confirm the MACD signals and provide more confidence in an upcoming move. Many swing traders use MACD crossovers alone as a strong indicator for trade entry or exit. That gives some confidence that the move above the moving average was strongly supported and is likely to be continued. You may also want to add a volume filter to look for stocks that are trading above their average daily volume. The second two rules then scan for stocks for which the daily candlestick is straddling the 20-day moving average, indicating a pullback from the trend that may just be getting started. The first two rules look for stocks that have been trending strongly over a period of four weeks, with the trend increasing over the past two weeks. You can create this scan using four rules:Īverage Directional Index (Daily, 14) is greater than or equal to VALUE 30Īverage Directional Index (Daily, 14) is greater than or equal to Average Directional Index (Daily, 28)ĭAY HIGH is greater than or equal to ANALYTIC Simple Moving Average (Daily, 20)ĭAY LOW is less than or equal to ANALYTIC Simple Moving Average (Daily, 20) With this setup, you’re looking for stocks that have been trending strongly up or down, but that are now pulling back and crossing over a 20-day moving average. One very popular trading swing strategy that you can use the Pro Scanner for is the Holy Grail strategy. Here, you can easily look for price breakouts that occur in conjunction with significant movements in technical indicators. If you want more control over your swing trade scans, you’ll want to turn to the Pro Scanner. This allows you to focus in on stocks that you’re already keyed into or on stocks from a particular market sector. One of the other nice things about using the Breakouts module to look for swing trading opportunities is that you can search only your watchlist stocks rather than the whole market.
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