SEO Swing Trading System

You can find several examples of the swing trading system in action on the Tradingfives blog.

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Maybe, just maybe, stock trading is such a hard thing to do for most people because they do not separate what the market should be doing (their analysis) from what is actually going on at the time. Humans are just naturally impatient, and not one among us likes to be “wrong”.

Statistically, the price of stocks and ETFs goes nowhere most of the time. Some estimates of directionless movement are as high as 80%. We call these times congestion periods, or consolidations, or we say the stock is range-bound.

Impatience in a range-bound market costs you money, confidence, and psychic energy. Even the best hitters in baseball aren’t so anxious to face the same pitcher that struck them out the last three times. So what can you do about it?

The first thing you can and should do is take advantage of range bound markets by selling options premium in liquid stocks and ETFs. That’s how the professionals make their money. If there is any secret to options trading it is that professional option traders do not have any structural advantages over you. None. The only difference between them and you is knowledge of the domain and only you can change that.

What about when the market is trending? Without getting too technical about it, the SEO Swing Trading System is automatically encapsulating flag, triangle, and pennant chart patterns, keeping your capital out of the market during the consolidation period, and then signaling Go on the resumption of the trend. It all comes together when you start to see that the real usefulness of Indicators is to define the state of the trend. Entry rules get you in on the side of the trend.

The logic is watertight. You make money on directional trades only when price changes in a favorable direction, and price changes more dramatically and more quickly after breaking out of a congestion zone in the direction of the trend.

Is it foolproof? Of course not. There are false breakouts, genuine unexpected reversals, and exquisitely engineered bull and bear traps always lurking in the background to ambush you. Richard D. Wykoff, one of the legendary best-of-all-time Wall Street Wizards said that even if he lost $3,000 on the bad trades and made $4,000 on the good ones, that it was a good day.

Wykoff was first and foremost a tape reader. He kept his charts in his head but he made it very clear that he operated from breakout prices. W.D. Gann, another Wall Street legend, used hand-drawn box-line charts to identify breakout price points.

Perhaps the most compelling aspect of the SEO Swing Trading System is that it will keep you involved on the right side of the market on every major move. Every one.

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