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FundaTech 7

This document discusses swing trading strategies using technical analysis. It provides 3 key ingredients for a perfect trade: fundamentals, technicals, and sentiment. It then discusses various technical indicators like Bollinger Bands that can be used to pick tops and bottoms in the market. Specific trading rules are outlined for entering trades when the market closes above or below the 1 standard deviation Bollinger Band. The strategies aim to target small profits of 50 pips initially and larger profits of 195 pips, using initial stops of 65 pips and moving stops to breakeven when partial profits are achieved.

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100 views111 pages

FundaTech 7

This document discusses swing trading strategies using technical analysis. It provides 3 key ingredients for a perfect trade: fundamentals, technicals, and sentiment. It then discusses various technical indicators like Bollinger Bands that can be used to pick tops and bottoms in the market. Specific trading rules are outlined for entering trades when the market closes above or below the 1 standard deviation Bollinger Band. The strategies aim to target small profits of 50 pips initially and larger profits of 195 pips, using initial stops of 65 pips and moving stops to breakeven when partial profits are achieved.

Uploaded by

Foru Forme
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Battle Tested Swing Trading

Strategies

With Kathy Lien and Boris Schlossberg


Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all
investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged
products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists
that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you
cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an
independent financial advisor if you have any doubts.

The information, including Commentary and Trade Ideas, provided on bkforex.com should not be relied upon as a substitute
for extensive independent research which should be performed before making your investment decisions. BKForex LLC and
bkforex.com are merely providing this information for your general information. The information and opinions presented do not
take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain
advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of
their trading to their personal risk appetite.

BKForex LLC will not be responsible for any losses incurred on investments made by readers and clients as a result of any
information contained on BKForex LLC. BKForex LLC do not render investment, legal, accounting, tax, or other professional
advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be
sought.
3 Ingredients in a
Perfect Trade
#1 Fundamentals
#2 Technicals
#3 Sentiment
Why Is It So Popular
To Pick Tops & Bottoms?

K
Because we LOVE to think like
Contrarians

K
And So Many Technical
Indicators are Based on Mean
Reversion….

K
RSI
Stochastics
Bollinger Bands

K
Even Hedge Funds Do It….

K
Works VERY well for SHARES
BUT
Mediocre for Indices,
Commodities & Currencies

K
Range Trading vs.
Reversal Trading

K
RANGE
1.  Most Common Trading Environment
2.  70% of All Price Action Happens in Range
3.  Can Last a Long Time
REVERSAL
1.  Triggered Off Price Exhaustion or
2.  Sentiment Change
Range > Best for Day Trading

Reversal > Best or Swing Trading


REVERSAL Works Best in Direction of Trend
Trading Double Bollinger Bands
Using BB to determine
Trend or Range
Using Double Bollinger
Bands to Pick Tops and
Bottoms
Picking Tops and Bottoms
Step 1:
Look for Close
Above/Below 1 SD
Picking Tops and Bottoms
Step 2:
If Close Above 1 SD, Short Next
Candle
Picking Tops and Bottoms
Step 3:
Swing Low/High Stop or
30 pips below 1 SD
Picking Tops and Bottoms
Step 4:
Target 1x Risk, Move Stop to
Breakeven
Trail Stop on Remainder
4 Hour Turn Trade
Double Bollinger Band Settings
Indicators Used: Bollinger Bands
Indicator Settings: 20,2 and 20,1
20 = period
2 and 1 = standard deviations
Long Trade
Rule #1
Look for 2 Candles Close
Above 1 SD BB
Long Trade
Rule #2
Check to See if Past 2 Candles is
Below BB by +10
Long Trade
Rule #3
50 Pip Target
60 Pip Stop
55% Accuracy to Breakeven
TREND
1.  Rare but Most Popular Trading
Environment
2.  Price Action Only Trends 30% of the Time
3.  Once it Starts Can Continue Way Beyond
Reason
What Makes a Trend a Trend?

K
What Makes a Trend a Trend?

<New H/L Uptrend Chart>

K
What Makes a Trend a Trend?

<New H/L Downtrend Chart>

K
False Starts vs. True Signals

Start with RAW price action….

K
False Starts

<New H/L Chart>

K
False Starts

<New H/L Chart>

K
What Do You Want to See?

K
Power of 1%
1.  1% Move
2.  1% Stop = about 150 pips
3.  2% Targets

*Stops are Subject to Slippage by Broker


*Stops are Subject to Slippage by
Broker. Past performance not indicative
of future results

Power of 1%

<1%Chart>
*Stops are Subject to Slippage by
Broker. Past performance not indicative
of future results

Power of 1%

<1%Chart>
*Stops are Subject to Slippage by
Broker. Past performance not indicative
of future results

Power of 1%

<1%Chart>
Multiple Time Frame Analysis

K
Top Down Approach

1.  Daily Chart


2.  4 Hour Chart
3.  Hourly Chart
Add in the Indicators….

K
#1 Establish Trend
Using Daily Charts
Daily – Expansion of Moving
Averages
Trading Below the
20 Day SMA
TTT Technique
#2 Pinpoint Entry and Exit Using
4 Hour Charts
Using Moving Averages to
Identify Entry and Exit
4 Hour Charts
20 & 50 SMA
Joining Existing Trend
Step 1:
Sell at 20-SMA
Joining Existing Trend
Step 2:
Stop at 50 SMA

*Stops are Subject to Slippage by Broker


Joining a New Trend
Step 3:
Target 1x Risk, Move Stop to
Breakeven
Trail Stop on Remainder
*Stops are Subject to Slippage by Broker
TTT Technique

Daily
Using Double Bollinger
Bands to
Join New Trend
TrendCatcher Trading Rules
Short Trade
Rule #1
Look for Close Below 1 SD in
Uptrend
Short Trade
Rule #2
Check to See if Past 2 Candles is
Above 1 SD BB
Short Trade
Rule #3
Sell at Close of Candle
5pm NY Time / 21 GMT
Short Trade
Rule #4
Set Target on ½ at +50 Pips
Set Target on ½ at +195 Pips
Initial Stop 65 Pips
Short Trade
Rule #5
When +50 is Banked on First Half
Move Stop on Rest to Breakeven
Short Trade Rule #6
Exit Trade If:
1)  +195 Target is Achieved
2)  Breakeven Stop Hit
3)  Currency Pair Closes ABOVE
1 SD BB
Long Trade
Rule #1
Look for Close Above 1 SD in
Uptrend
Long Trade
Rule #2
Check to See if Past 2 Candles is
Below 1 SD BB
Long Trade
Rule #3
Buy at Close of Candle
5pm NY Time / 21 GMT
Long Trade
Rule #4
Set Target on ½ at +50 Pips
Set Target on ½ at +195 Pips
Initial Stop 65 Pips
Long Trade
Rule #5
When +50 is Banked on First Half
Move Stop on Rest to Breakeven
Long Trade Rule #6
Exit Trade If:
1)  +195 Target is Achieved
2)  Breakeven Stop Hit
3)  Currency Pair Closes BELOW
1 SD BB
Using Double Bollinger
Bands to
Enter Existing Trend at
Value
Joining Existing Trend
Step 1:
Place Limit Order to Sell at
1 SD in Downtrend
Joining Existing Trend
Step 2:
Stop 35 pips above 1 SD
Joining a New Trend
Step 3:
Target 1x Risk, Move Stop to
Breakeven
Trail Stop on Remainder
And THAT’S How
Entries / Exits are
Determined
Entry vs. Exit



Source: Travelfrance.com.au
Source: a2il.tc.faa.gov

K
If there is only 1 thing
you take away….
You WANT
Fundamentals…
Technicals…
Sentiment…
On YOUR Side
For EVERY Trade
[email protected]

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