COMPLETE GUIDE TO SWING TRADING
By Jaynesh Kasliwal
NOTE
In all my charts
Red line is 21 ema
Green line is 50 ema
MACD as normal settings
CRITERIA FOR SWING TRADING
Uptrend HH HL Structure
Stage 2 Uptrend
Volume Expansion during Breakout
Pullbacks with Lower Volume
Base Formation ( Rectangle , Vcp Etc)
Relative Strength > 0
21 ema > 50 ema > 200 ema
Stocks near 52 week High
Stocks near All time High
WHAT IS HH HL STRUCTURE
A stock Maintains Bullish Momentum till it holds
the last Swing .
Swings is an area from where stock reverses
As it is widely known Trend is your Friend A
structure of Higher High is good for buying as
overall momentum is in buying side
A structure of Lower Highs is good for selling
side , as each bounces will be sold off
Previous Swings will now act as Resistance in
Downtrend and Support in Uptrend
ENTER STAGE 2 UPTREND
Stage 2: The Ideal Buy Point for Traders Traders
should look for bases within an existing Stage 2
uptrend and focus on breakouts on volume.
Intermediate term traders can also use investor
buy points
Traits in Stage 2 Breakout above the resistance
zone & 30 week MA on big volume Post initial
breakout, there is usually a retest of the breakout
point 30 week MA starts turning up shortly after
the breakout
VOLUME EXPANSION ON BREAKOUT
Volume Plays an important Role in Sucess of
Breakout.
If Breakouts occur on Low Volumes its is likely to
Fail , But breakdowns can happen on Low
Volumes
DISTRIBUTION TO BE LOOKED AT TOP
PULLBACK WITH LESS VOLUMES
Low volume pullbacks are often a sign of weak
longs taking profit, but suggest that the long-
term uptrend remains intact.
High volume pullbacks suggest that there could
be a near-term reversal.
If Price falls with Increased Volumes means
Bigger players are exiting the stock i.e
distribution .
PULLBACKS WITH LESS VOLUMES
BASE FORMATION
Basing refers to a consolidation in the price
Basing periods are accompanied by declining
volume and there is an equilibrium between
supply and demand.
Securities that are basing establish clear support
and resistance levels as the bulls and bears fight
for control.
It could be rectangle base , Cup and Handle Base
or Volatilty contraction pattern
TYPES OF BASES
RELATIVE STRENGTH
Relative strength is a strategy used
in momentum investing and in identifying value
stocks.
It focuses on investing in stocks or other
investments that have performed well relative to
the market as a whole or to a
relevant benchmark.
Type
“Relative Strength”
Choose any
By bharattrader
By traderlion
By Modhelius
I use by bharattrader
In setting use 65 period
0 line that helps to differentiate between
underperformer and outperformer
>1 Outperforming the markets
<0 Underperforming the markets
When RS Goes above 2 its too much heated and
generally goes into consolidation.
OUTPERFORMANCE
UNDERPERFORMANCE
Select Stocks where RS Line is postive and
continously outperforming
These stocks tend to outperform in strong and
weak markets
So stick to selecting stocks that are
outperforming where RS line is Postive
ROLE OF EMAS
21>50>200 ema
Signifies Strong Uptrend
Moving Averages plot the Avg price which will
help us identify the overall trend
These Avgs give Dynamic Support to price and
hence price bounces off these emas
Two Types of Moving Averages
EMA and SMA
Exponential Moving Average (EMA) is similar
to Simple Moving Average (SMA), measuring
trend direction over a period of time.
However, whereas SMA simply calculates an
average of price data, EMA applies more weight
to data that is more current.
We will use EMAs in all our charts
Whenever 21 ema is sloping upwards its called
uptrend
Whenever 21 ema is sloping downwards its called
dowtrend
Whenever 21 ema is sideways its called
consolidation
Buy in uptrend
Sell in downtrend
STOCKS NEAR 52 WEEK HIGH
Stocks near 52 week high have a lot of demand
We basically want stocks that are in demand
where prices keep going up
Buy High Sell Higher should be thinking in
Swing trading
Screener : 52 week breakout Stocks
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BUY RULES
Enter Stocks on Breakout of 52 Week High
Stock Should be in uprend and have HH HL
formation for better Win rate
Volume Should be High on Breakout
Stock generally retest the breakout area hence
add 50% position on breakout and 50% position
on Retest
Momentum is highest in RS+ Stocks where RS is
increasing and is positive from long time
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