Sample Swing Charting Setups
This chapter showcases some very helpful charts. They're all about swing trading setups. These setups are actual historical trades and all of them can be back-tested.
Keep in mind that some of the swing levels hit in pre-market, and therefore they were skipped. You can't see pre-market data on a daily candlestick chart. This is one more reason why it's critical that you stay on top of your swing levels every day and are watching to see if levels hit in pre-market. I assure you that this is one of the top 10 reasons why non-formally trained traders misuse this system.
In Part 4, I provide more charts to help mold a solid understanding of how this system works. In Part 3, however, you only need to focus on the basics: (1) the 5 percent rule and (2) the 10-day hold rule. Basically, you need to focus on swing setups exclusively.
You may notice that several of the chart examples date back to 2012. Their age makes absolutely no difference. The rules and procedures that applied then apply just as much to this day. I purposefully chose older chart setups in order to prove that point.
Looking over Figure 6.1, you can see that the 151.97 daily level (resistance) held for 10 days, making it your first-tier swing, and you can see that you have several higher resistances all within 5 percent of it. Note that the current price on September 12, 2012, opens just under the 151.97 first-tier swing level. This price is the first of several swing levels above ...