Swing Trading Continuation Patterns
Continuation patterns may not be as sexy as the initial momentum burst from which they develop, but they are just as profitable and often provide lower risk trades. The setups are often passed up for breakouts by many novice traders because they just aren't as exciting. However, talk to any winning trader and they will tell you it's not the exciting trades that are sexy, but the low-risk profitable ones.
Continuation patterns require the following simple elements:
- Initial momentum burst
- Consolidation or pullback
- Strong entry signal
In today's video, we review two current trades that I entered using continuation pattern setups.
- The $X Trade: The steel sector is on fire and U.S. Steel is leading the way up around 100 percent since the post-election momentum burst. The stock recently pulled back to the 9-ema and showed strength at this level giving us a low risk-high reward entry signal.
- The $FAS Trade: Like steel, the financial sector has made a huge post-election momentum run. We entered off a similar signal to $X, although there are a few subtle differences I discuss in the video.
How the Swing Trade Report Helps:
I've designed my swing trade report to help those who are new to part-time trading avoid the hurdles that held me back for years. First is the education. As I mentioned above, it's easy to collect "trading trivia" that feels valuable on the surface but is functionally useless. The strategies that I use and teach have zero fluff. If something isn't useful in the real world of trading, I don't include it. As someone engaged in part-time trading, you must focus your limited hours and mental bandwidth on what is most useful, and my report will help you do that.
One of the biggest mistakes I made as a new trader - and it's one that almost all new traders make - was not managing my risk properly. It's important to understand that the way a day trader and a swing trader manage risk aren't identical. When you are part-time trading, you can't sit and watch every tick of a stock. Some stocks that would be fine to day trade are simply too volatile to swing trade safely. I curate my watchlist with this in mind, leaving out the craziest momentum stocks, while keeping huge movers like $FCX (19% gain, 3-day hold), $UCO (27%, 2-week hold), and $NUGT (24% 2-week hold). When I alert a stock from my report, you run little risk of missing the entry and chasing, and you won't have to be worrying that it will make a drastic move overnight.
The swing report will help you gain confidence as a trader. Rather than trying to piece together something that works from a random collection of books, forum posts and blogs, you'll get one concise, cohesive report that gives you everything you need. No more jumping around from one system to the next. No more blindly following the latest social media buzz. You'll earn your confidence as a part-time trader one successful swing trade at a time.