Breakout Strategy for CFDs - The 50/150 Swing Trading Strategy

The 50/150 swing trading strategy presented here is suitable for traders with a medium time horizon. The positions are usually held from several days to a few weeks. For beginners it is pleasing that only few indicators are needed. The risk/reward ratio is 2:1 at a moderate level. Risk management is already integrated. Traders benefit from the high flexibility of the strategy. It can be easily adapted to the personal trading style and the preferred time horizon.

The time horizon in swing trading?

The decision for a trading strategy always depends on the desired time horizon. This should be defined in advance. Those who prefer a scalping strategy would like to achieve as many small profits as possible within a short period of time. For day traders, the time horizon ranges from minutes to several hours. Trend traders speculate on price movements in the overriding trend. The positions can be held for several weeks or months. Then there are traders who base their strategy on fundamental data. Until the "intrinsic value" of an underlying is also recognizable in the associated price, it can take quite a long time. Sometimes positions are held for several years.

Swing traders are located in the area between day and trend trading. The analysis of the market takes place thereby over the weekly to the daily chart. Subsequently, an optimization of the entry time takes place in the intraday chart. Data from a fundamental analysis is of rather little importance, as is the intrinsic value of the asset. Nevertheless, traders should not completely disregard the quarterly balance sheets. If these coincide with important marks or trend lines, this can certainly affect the price.

The shorter the time horizon, the more importance is attached to the momentum. Finally, the swing trading strategy with exness login is to realize profits in a manageable period of time by means of price movements. Swing trading offers certain advantages, especially for working people, compared to day trading: The markets can be analyzed and trades can be placed even in the evening.

How does the swing trading strategy work?

In the 50/150 Swing Trading Strategy, both primary and secondary trends are to be exploited. The time horizon ranges from days to several weeks. For the strategy mainly trend markets are considered, so that for this a certain preselection is meaningful. Other factors are a CRV of 2:1 and integrated risk management.

In this strategy, we assume that prices generally move in a wave form. If there is an impulse wave, it is always followed by a reversal of direction. In this case, the previous movement is partially eroded. In the first step, the basic trend is determined. Depending on the time horizon, different indicators are used here.

As already mentioned, secondary trends are also taken into account, so we use a 50-day line. Short trades are generally placed below the line and long positions above it. Another condition for the swing trading strategy is that the break of the 50-day line is confirmed by a higher high.

If there is a break of the trend movement, we take the new low or high. The distance midpoint to the previous high/low is then defined. The limit order is placed at the corresponding level in the direction of the trend. Slightly above the high/low comes the stop loss. We recommend using a guaranteed stop loss here. The take profit automatically results from the 150 percent extension of the distance between the high and low. So trader always achieves a CRV of 2:1. 

2006年06月20日 19:24　管理人の日記

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