My trading style is based on "Taylor Trading Technique", the short-term method of trading on daily price fluctuations, which is based on chances and percentages. This method is contrast to the system. Very few people can blindly follow a system, so many of them find that it is easier to trade at their discretion, but with the elements of the system.
Because this short-term technology of coups (swings) produces a large
number of transactions, it is important to know the rules of the game to fix the profits and to find the "true trends". Taking Losses - is nothing more than a game, whose aim is to select the best position.
Knowledge of the rules of the game - is understanding when to buy and when to sell, when to close, and when to hold the position. Trade is based on the reference points, which is a minimum and maximum highs of the day. Movement between these two points is defined as "true trend".
While using swing trading method you must decrease your expectations. The lower your expectations - the happier you will be and the much money you'll have. It is important to use a narrow resistance in the swings trade and wide resistance while trading in trends.
This method teaches you to anticipate! Never react! You should know that you are going to do before the market opens. Always have a plan but be flexible. You must define resistances before opening a position, to determine how you will go out of unpleasant situations and take minimal losses.
Finally, never trade with the dead, small markets. These variations are too small. Never pursue market. Instead of disappointing of missed movement, think - "Well, I have again a fluctuation and volatility."
Basic rules for swing trading
At first - rules. Due to the shortness of this method of trading traders should follow the following basic rules:
If the motion is in accordance with the position you that you prefer - carry it on the next day - chance favors the continuation of the movement. You must plan out to the next day about the reference point. Night gap presents an excellent opportunity to make a profit. To reduce the stress you can concentrate only on one input or one output during the day. If your entry is correct - the market should begin to move in the direction you want almost immediately. It may go a little further to your point of entry - this is permissible. Do not leave a losing position for the night. Come out and fight for a better position on the next day. The strong closure points predict a strong opening the following day. If the market does not move as expected - exit at the first setback. If the market has given you an unexpectedly large profit - fix it at the closing. If you are on the long and the market closes flat (pointing to a lower opening on the next day) - reduce the amount of open positions or go out. Fight for a better position the next day.
Use a narrow resistance in swing trading and wide in trends trade. If the trade did not work - get off at the first setback.
Swing Trading
How to predict the inputs? Here are some possible indicators of purchase and sale days:
Counting the classic sales cycle. Start to look for the day of longs within two days after the coup at the top or, conversely, a day for shorts - after the coup at the bottom. Ideally, the market is moving in the 5-day cycle. (If a strong trend the market is moving in 4 days in the mainstream and one day in the opposite direction. Thus, you have to look for entrance to one day earlier).
Ticks testing level. Potential entry is sought in the opposite direction to close of the day. If we search for the opportunity to buy (sell), it is desirable that the market tested the maximum (minimum) highs of the day, preferably in the morning at the opening and then, as a result of the rebound, formed a trade figure, which looks like a "tick". This figure establishes a "double stop point" or strong resistance. If you entered the market only with a "single-stop-point" or support, formed only by today’s minimum - go out the same day, trading goes against the trend.
Closure against the opening. Closing shall indicate the opening of the next day. If the market opened in the direction opposite to the expected or to indicated existing trend, you can wait until the rollback is not "fade", but the profits must be fixed - and wait for the coup trend.
Support (resistance) Is today's resistance (support) above or below yesterday's?
Measurement swings. Where is the market on the last swing - above or below? Look for the swing of the same length.
Important addition!
Regardless of the time window, always estimate the volume at the top and support at the bottom. Break should always be accompanied by volume and activity.
Practice of trading
As in any technique, there is always a certain amount of its subtleties, the knowing of which is necessary for success, requires a certain period of trade "on paper", for more reliable recognition of repeated patterns. But there is always a temptation to use many different styles and patterns, it is necessary to limit ourselves to trade only due to one chosen style - or, at least, to integrate technology into your own unique philosophy.
Characteristics of the systems
Some remarks to the short-swing trading. Understanding the nature of short-term systems can help you torecognize the psychological aspects of trading.
Due to continuous following to the short system, a very high ratio of profit / loss is expected. Although the goals of this type of swing trading are quite conservative, you will almost always get "positive slippage"
In all systems winnings are distributed very asymmetrically. Even in the market, which gives profit, 3-4 really big deals can be done almost all the profit of the month. It is important to constantly fix your profit. Do not let profits slipping in the short-term trading. You may be amazed at how great the profit is using swings.
Decision-making
Every time you make a trade - you decide. The more you have decided - the more your self-esteem. You grow with each decision, but every decision has a price. You must be able to have a right to make mistakes.
Golden Rules
At the end of this article I want to mention the really two golden rules to be followed by all traders, but especially those who go on short-term:
NEVER, NEVER average your losses. Sell only if you stand against the market. Buy only when you are sure. NEVER, NEVER, NEVER listen to anyone's opinion. Only you can know when your trade is not working.
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