As Mark Boucher said, "70% of a market's moves occurs in 20% of the time." The idea is to be in the market for that 20%, and out the rest of time. Momentum-based swing trading is not about picking tops/bottoms! Trends last longer than most are willing to believe.
I think everyone should. Daytraders can gain an edge by placing a bigger-picture pattern ( say, one good for two to seven days) behind them, so they can improve their odds.
Risk can be defined, and you know fairly soon whether you are right or
not. Longer-term traders can "trade
around" positions, e.g., say you are long 1,000 shares, you might add to your
position when a setup occurs and take off some when profits present themselves.
I know of some longer-term traders who beat their colleagues with this
strategy.
Look at the (INSP) chart below. Notice the trend went a long ways but eventually ended -- and a new (tradable)
downtrend emerged.

There are
computerized methods like ADX and RS -- these help when scanning, but I mostly
like to eyeball charts.
Trends leave
behind "clues." I have dubbed these clues "Trend
Qualifiers." Notice in the chart that the stock started with a base
breakout, hit new highs, had strong closes, wide-range bars, gaps, etc. Notice
how the stock "acts" after each pullback, it resumes its
trend.

Another way to determine trend is to use moving averages, I like a 10-day SMA, 20-day EMA and 30-day EMA.
I look for the slope of
the moving average to be up for uptrends, and for the averages to be in "Proper" order -- faster above slower (i.e., 10 > 20
> 30) and for daylight.
Daylight is simply lows greater than the moving average
for uptrends, i.e., there is "daylight" between the low and the moving average.
This is illustrated in the following figure and graph.


Identifying trends is not rocket science. If you can't figure it out,
it's probably not a trend. And of course, my favorite technique: Ask a six-year-old kid!
Trading with the trend does not mean blinding jumping on a trend. I like to wait for a pullback to occur. Refer to the figure below: The pullback consists of a trend (a) and a correction (b). You enter if and only if the trend begins to re-assert itself (c). You have to place a protective stop on ALL trades just in case you are wrong...this normally goes below the low of the setup (d).

(MENT),
mentioned recently
in my column, is a good real-world example.

As George Soros said, "In order to make money, you must first not lose money."

Ask yourself, "What is the market doing?" I have market timing systems I follow: Look at
the 3-day average TRIN readings, the CHADTP, VIX systems, oscillator swing
system -- and the charts themselves.
Next, you must be in the
strongest sectors -- and the strongest, best setups in the stocks in that
sector. Finally, you must be focused, free of distraction, and ready to
trade.
And remember, PROTECTIVE STOPS ON EVERY TRADE!
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