Swing Trading and Market Timing Knowledgebase

By: John Crane, swing trading guru

When the Trend Continues

Although the name swing trade date may imply the futures market will reverse on that day, that is not necessarily the way it works. What really happens is there is usually a reaction on or near the projected swing trade date. A high percentage of the time, the reaction results in a change of the existing trend or the beginning of a futures market correction (Reaction swing strategy). On the other hand, a small percentage of time the reaction results in a continuation of the existing trend. Later in this book I discuss how to identify the difference between a reversal pattern and a continuation pattern. Both can be very helpful in your trading.

All of the chart examples I have shown so far have made either a major top or bottom on or near the projected swing trade date. This makes it very simple; I just exit the trade and wait for the next set up.  However, nothing is that simple, but it doesn’t have to be difficult or complicated either. Many times the futures market will just pause and form a new Reaction swing strategy pattern near the Reversal date before continuing the trend. Even though the futures market has just offered a great trading opportunity from the SWING TRADING STRATEGY TR pattern, if there is more to the trend I want to take advantage of the new opportunity…and there is a way to do just that. It is called the Trend Continuation pattern (Swing Trading Strategy TC) and - like the SWING TRADING STRATEGY TR pattern – it can be a very useful and sometimes amazing tool for a trader who understands futures market behavior.

Since I am still talking about the SWING TRADING STRATEGY TR pattern in this chapter, I don’t want to get into the specifics of the Trend Continuation yet, but I did want you to be aware that there is a very simple way to take advantage of the extended futures market move as illustrated in this example of the September T-Bonds. The SWING TRADING STRATEGY TR pattern triggered a very nice trade, but it was not the end of the move.  I think you will be amazed at the information it provided.

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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.

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