Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

Swing Trading Silver

Figure # 4.21 - After a substantial sell-off between April 6 and April 14, July Silver paused long enough to form a bearish Reaction swing, marked (C) to (D) on chart. However, the Silver didn’t rest long as the futures market quickly dropped through the pivot low (C) and began trading at $6.50 on April 21.

The center line began at the high (B) and sloped downward through the center of the (C) – (D) Reaction swing and continued lower to the end of the chart. The reverse count of 16 days was used to project forward to the May 11 Reversal date where I marked it on the center line. The Action/Reaction lines predicted an initial target price of $4.00. The July Silver continued lower over the next three weeks, but ran out of time before the target price was reached. Silver bottomed at $5.50 on May 11, the predicted swing trade date.

Figure # 4.21 – July 2004 Silver

I drew the center line from the high marked (B), continued lower through the center of the (C) to (D) Reaction swing and extended the line to the end of the chart. The reverse count from (C) back to (A) was 15 days and projected out to a future Reversal date of May 3rd where I marked it on the center line. Next, I drew the Action/Reaction lines and used them to forecast the primary target at 8866. The price objective was not reached because the futures market ran out of Time. However, the short position did close at .9073 on the May 3 swing trade date, even though the futures market did not reach its goal. The trade signal offered a potential gain of over 330 points in 15 days!

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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.