How to swing trade

Hi Koki,

Regarding 1) don't trade in TRs, I would suggest to also look at size of TR. A narrow TR (slightly bigger than TTR), sure, best to skip. But a TR that's as big as ADR (average daily range) may be ok to trade if you see evidence that stop order traders are indeed profiting. Because otherwise you may end up not trading all day while good quality setups pass you by. 

For example, a TR of sufficient size may have legs inside that are good trends in themselves, so you can see a BO to the upside at the bottom for example, and then wait for PBs to buy as price heads to test the upper range of the TR.

For 3) ok to enter anytime as long as Always In is clear, I would be careful and pay attention to climactic exhaustions (a move >20 bars or so suddenly gets the biggest bar of the move). It often looks the best just before it reverses.

4) Always hold until opposite signal: I would suggest to still take some profits at 1:2 at least and let a small portion run for a swing. It depends on the market, but in ES, which is often in TR of some sort, if you don't pay yourself early, by the time an opposite signal is clear the price already retraces most of the move. 

Hope this helps,
CH
_____________________
BPA Telegram Group

Hi Mr. Carpet, thank you for the response.

You exactly pointed out the things those I was wondering about...

For 4), Do you take profit part of the position on 2x initial risk or actual risk? Does it depend on the setup or context?

Regarding 1), I only pick up and trade ''Trend From the Open'' stocks from my watchlist which contains 30 top volume stocks because it seems easier to trade one particular context on different stocks everyday rather than going through different context on one big futures instrument like Al does. Do you think this is appropriate as a career in the long run? I think volume problems will definitely emerge because I trade Japanese stocks, those are much smaller than US ones. If I stick to Nikkei mini, the volume is fine but it's difficult for my skill at this point. Are there other problems on this approach?

It's never bad to go for 1:2 on initial risk (as long as target area is reasonable) since your profit extends farther. But Al Brooks does say that the Trader's Equation is based on Actual Risk:

For 1) if you do find stocks that are all following the same trend from the open pattern then it's definitely easier to focus on such during the session. But I wonder how often that is the case; don't most stocks also go through multiple market cycles throughout a day just like futures do? 

Thanks for the audio! It really clarify the topic. I will take at least some profit at 2x initial risk.

I find at least 1 or 2 stocks trending from the open everyday. My most profitable strategy for now is to trade H2/L2 PB on strongly trending stocks.

I feel like that "target area is reasonable" part is the key point. If I enter on a relatively strong trend, stop is huge so 2x initial risk is too far away that needs climactic move to be hit. Do you think this kind of target "unreasonable"?

I am confused by that audio. You don't know the actual risk until you get a breakout in your favour once you are in the trade, so by definition you only have the initial risk at the point of taking the trade. How can you then use actual risk in your TE at the point of entry?

We would need to see the bars to the left to decide if it's reasonable. All price action decisions are relative to what's on the left. 

Yes. We should follow the market, not the rules. My current weakness is to focus on rules, systems, or guidelines too much, instead of to see the market itself and follow it without ego. Maybe this whole topic I posted is just an expression of my weakness. 

Thank you, Mr. Carpet. You cleared my mind. And all the work you have done in this forum is astonishing.

Hi PB.

I know what you mean. I was suspicious about the actual risk concept before.

Diving into the course again will definitely help you. I'm sorry, I'm not confident to explain this concept for you here.