What’s The Best Swing Trading Methods?

The Best Swing Trading Methods

One of the questions I get asked quite frequently by students is to tell them my best swing trading methods for  short term trading; they want to know the Holy Grail. 

Unfortunately, there is no secret formula to swing trading or any type of trading for that matter.

Trading is not a science so there are very few hard and fast rules regarding what works.

To complicate the matter even more, sometimes a market will behave in a certain matter that will work with a specific strategy.

The downside of this is sooner or later the market will change and shift into a whole new trading pattern which can last anywhere from a few minutes to several months. So what works one day may not work the next day.

The key and a better question is what type of trading methods will work in the long run with different type of market conditions.

The answer to this question honestly, there are three primary methods that most speculators use today.

Breakout Trading Methods

In this type of trading method, the trader looks for a market to make a new high or a new low.

The high could be a 5 minute high or a 90 day high.

This is all dependent on whether you are using daily or intra-day time frame.

Many traders who use daily time frame, use 20 and 50 day breakouts to enter the market.

Many commodities traders during the 70’s relied on breakout trading methods for most of their speculating.

Breakout strategies work well with markets that have tons of movement or volatility and good liquidity.

When the commodity markets lost volatility during the late 80’s, breakout strategies stopped working and traders began relying on other methods of speculation.

This is just one example how a strategy that worked for over a decade stopped working because markets changed their behavior.

To give you a good example, during the last 8 years, breakout strategies worked very well in the gold market and high flying stocks such as Apple and Google.

But once the gold market flattens or Google and Apple stop rising every other day, breakout strategies may not continue to work as well with these stocks and markets.

Retracement Trading Methods

Another very popular trading method that is used often with swing trading strategies are retracement strategies.

A retracement occurs when the market is moving strongly in one direction and pulls back and corrects before beginning another leg in the direction it was going before the retracement, this type of swing trading strategies work very well in strong trending markets.

Unfortunately, many times retracement or pullback strategies turn into reversals and end up going much further away from the main trend then they are supposed to.

There are several different swing trading methods that use retracement strategies.

One of the one that I show examples with very often on the market geeks site is the 4 day retracement entry.

If you want to learn more information about the 4 day retracement entry take a look the trading blog and you will find dozens of examples using this strategy.

Reversal Trading Methods

Finally, the last type of trading method that traders use for swing trading is the reversal method.

Many swing traders prefer this method of trading because many reversal trading methods have very good risk to reward ratio.

This is very important part of swing trading, to have a method you can rely on that that has a good risk to reward ratio. The reversal method works best with choppy market conditions where markets are not trending too much.

Remember, the best swing trading methods are those that have a low risk and high reward profile. That’s the goal of our staff at Market Geeks to teach you the best possible swing trading methods that have the lowest risk and highest reward profile.

If you are looking to learn short term trading methods, I recommend you look at some of our trading videos and some of the articles on the blog. There are several examples of short term trading strategies that work in the real world.

These methods can apply to stocks, futures, e-mini contracts and commodities. Unfortunately, these methods do not work well with options.

The reason is options are decaying assets and these strategies do not take that into account. If you trade stocks or   e-mini futures, then these methods will work well for you.

So remember, the best strategies are all dependent on what type of market environment you are in.

To learn more about the best swing trading methods visit Market Geeks website today.

All the best,

Roger Scott
Head Trader
Market Geeks