Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

Long-Term Swing Trading

How do you know when the futures market timing correction is not going to be a short-term pause inside the longer-term trend or a significant correction or perhaps a major turn in the futures market? Actually, it is very simple. For example take a look at the December 2004 Hogs. Just before the futures market peaked on the September 23 swing trade date, the futures market had formed a small three-day swing pattern with a pivot low of 86.70 on September 22. Three days later December Hogs reached a high of 71.80 before they closed at 67.82. The futures market had just dropped below the previous pivot low.

This is the first hint that the trend was changing. From this point, the Hogs formed a new bearish swing pattern and TR pattern that was confirmed on October 4. At this point the correction had lasted seven days, but the futures market continued to make lower lows and lower highs below the 20-day SMA, with the futures market timing bottoming seven days later. Once the correction had surpassed the seven-day threshold, it can no longer be considered as a minor swing trading correction. Instead, it should be considered a major swing trading correction, which could last up to twelve days. Once the twelve-day threshold is surpassed, it is no longer considered a swing trade correction. Instead it is time to look for a TR pattern instead.

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**THE RISK OF LOSS IN TRADING CAN BE SUBSTANTIAL. YOU SHOULD, THEREFORE, CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION. HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER OR OVER-COMPENSATED FOR THE IMPACT IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES.