The Ultimate Swing Trading Guide For Beginners (ALL YOU NEED TO KNOW)

"what you see is called a candlestick chart if you're so new that you don't know what a candlestick chart is there'll be a video that i did a while back in the top right hand corner of the screen that will tell you everything you need to know about these types of charts we use these as an indication of price direction to make accurate swing trading decision decisions but we don't just use candlestick charts we combine this with other forms of technical analysis to help us make these high probability decisions things like moving averages and indicators things like structure support and resistance candlestick patterns price action patterns the list goes on and on but we find a combination of all these things that we can set rules around called a strategy and then we see if that strategy makes money by back testing and practicing with it"

"so now that you know that let's dive into the strategy today we're going to be focusing on using a moving average which is going to be the 50 period moving average it's the blue line you see on the screen in front of you also we are going to be using structure and a candlestick pattern in order to create this high probability setup that we're going to look for to make our accurate swing trading decisions"

"one of my favorite ways to swing trade is by trading with the trend and what i'm trying to do while trading with the trend and swing trading is i'm trying to capture pullbacks before the next impulsive move up"

"i need a rule for trend first right i need to make sure that i'm following the trend of the market and what we're going to do for that is use this exponential moving average so you type in ema here on my indicators it will be the first one that pops up my exponential moving average is going to be set to a 50 length or 50 period it's going to be the same as chart i'm going to make it a little bit larger just so it's easier to see and now i have a defined rule for my strategy in terms of the trend of the market i need the market to be above the 50 period moving average"

"if you can't see where i'm going yet and you're a complete beginner when we're building a strategy the easiest route we're going to have to actually successfully trading that strategy is by creating rules that we can follow every time we place a trade that's how you stay consistent to your trading plan into your strategy is by having set in stone rules for every part of that strategy so again we have a rule for trend i want to see the market above the 50 period moving average we now need a rule for pullbacks because we're trying to catch the end of pullbacks so for me a pullback is anything more than two red candles after a new swing high"

"the candlestick pattern i'm going to use in order to enter a trade in this instance is just what i call a color change so if we have a retest of this area then the color that retests it will likely be red all i'm looking for after that is a green candle so we have this retest of our previous swing low and then we get a green candle that is the entry"

"the stop loss is below the swing lows"

"for our first example we're looking at the aussie yen and i want you to tell me or leave a comment what am i looking for right now what do we have what is price done well according to our strategy we need price to be above the 50. is that rule met yes we need a swing high and we define that swing high as a high that then has two red candles those two red candles are the pullback so now we have a new swing high and a pullback all above our 50 period moving average what's the next thing we look for a swing low how do we find that a bounce out of price after we get that swing low which is by the way right here this is our swing low we want the market to come down test that area and then give a green candle and we want to try to capture the bottom of this pullback for the next move higher"

"so the way i do that is by putting a box between the body of my swingload candle and the wick of my swing low candle and this is where i need price to test it can test this area with a wick it can close in this area a wick can go past this area what i do not want to see is a candle that closes below this area at that point i have to start looking for new trades either a new swing high and pullback or a new uh swing low that i can look for a re-test of"

"next up let's take a look and see what we're looking for what do we have we have a new swing high right after we get a new swing high we want to see a pullback which is at least two candles we get that after we get at least two candles we're waiting on the market to come back down and do what what am i waiting on at this moment right here i'm waiting for price to retest what this very first swing low"

"okay so for a bearish example we are in a downtrend and is this a new swing low yes it is we can see that we have now pushed down to a new swing low we now have one two pullback candles at that point this is validated for me with this trading strategy as a pullback so at the point that we have a pullback what are we waiting on with a bearish entry we're waiting on selling pressure or a red candle and then a retest of that zone between the swing high high and the swing high body and then another red candle"

"one of the nuance rules is i cannot keep looking for this once candles close above the 50 period moving average once that happens i'm not considering this market in a strong enough downtrend for me to want to trade that strategy"

"starting with understanding the basics of the market that you are trading in so if you're trading the forex market that would be understanding what the forex market is what a currency pair is what a pip is how the market moves how to go long and how to go short how to place a stop and a target understanding the way to take a trade in your brokerage account would all fall under the category of basics"

"next you'll need to master technical analysis and i know my handwriting is awesome technical analysis would be understanding a candlestick chart would be understanding indicators moving averages price action patterns like double tops and bottoms candlestick patterns like engulfing hammer shooting star you need to understand at least to a certain degree all aspects of technical analysis that would all fall under category number two"

"and the reason you must do this is because we're going to use a combination of these technical factors to create the next step which is to create or learn a strategy now in this video earlier i taught you an entire strategy that's rules-based and that has provided an edge over the market for me you don't have to go create your own i have plenty of strategies on our channel and there's plenty of other strategies out there you can learn one"

"but the only way to know if said strategy does provide an edge over the market is to back test which is step number four or number four on this checklist is to back test that strategy so your strategy is going to be a rules-based approach to every single time you trade based on a number of technical factors that's why we need to learn technical analysis first and then learn or create a strategy and then we back test that strategy to ensure that it's profitable even if you learned it from a pro trader like myself you still need to go test it to be sure it's profitable and be sure you're seeing the market in the same way i am and there's no other way to see if this said strategy was profitable in the past 100 trades other than testing it in the past 100 trades right"

"and we also back test not just to ensure that a strategy is profitable but also to practice that strategy and train our recticular activating system to see that specific pattern on a chart to see all of our technical factors coming together on a chart more quickly and more easily because acting fast even in swing trading is really important in trading so you want to make sure you go through your back testing to practice and ensure your strategy is profitable and the third reason we back test is to help with number four and number four is optimize you now have a strategy that is rules based that you are back testing you need to be optimizing that strategy"

"so number six on the checklist is creating a risk management plan and since you've done all the other steps you now have the information you need to do so so if this strategy let's say performed at a 60 win rate and gave you a time when it had five losses in a row then if that's what happened in the past 100 instances the strategy performed or this strategy happened in historic data then it's likely that you're going to have five losses in a row again during the next 100 trades so the way you would go about creating a risk management plan is asking yourself with those five losses how much do i need to risk each trade to stay comfortable during drawdowns like that to stay out of my emotions to keep from making big mistakes and most of all to keep from blowing my account during those types of losses"

"demo trading is the next step now i know there probably is half of you going demo trading doesn't give me any emotional stimulus so why would it be like practicing trading well you don't want to risk money if you don't know if this rules based strategy can actually be used in real market data so the reason we're demo trading is to make sure you can actually accomplish the strategy you can place the trade you need to place even with your prior obligations like having a job like having kids to look after like sleeping you want to make sure that all of your trades don't happen while you're asleep you want to make sure they don't happen while you have those prior obligations you want to make sure that you can actually perform the strategy you also are going to demo trade because if you're using market orders what you didn't account for in your back testing is something called spread and you need to make sure that that spread doesn't make your strategy just completely irrelevant and lose the profits that you could have made"

"you at the end of the day need to stay disciplined to all these rules i know that it's so tempting to go chase the next gamestop or dogecoin or amc i know it's so tempting to jump on the bitcoin bandwagon and i'm not saying don't do that at all if you have a certain amount of money that you're willing to risk or if you trade in crypto by all means go do that but don't gamble even if you're doing that at least have some kind of plan have a set place where you want to get out of the market don't just put money in there expecting it to go to the moon maybe it will maybe it won't but at that point all you're doing is gambling"

"i created a strategy that only uses six simple rules to create an edge over the market so once you memorize these rules trading becomes as easy as counting to six these rules are completely objective and easy to follow and although just having a strategy is only one part of the equation it is a very large part of that equation"