No decent swing high formed yet

vergis92 · Oct 22, 2008

I think there's room for one or two more down days before going higher!

Fundamentals confirm a recovery but on the swing chart there's no decent swing high
formation yet, a breach of which would confirm a swing buy signal...

I suspect it may take several days in the process of the formation of such a decent high,

what's your opinion on swing trading theory??

certainly it's a great trend confirming tool but not a leading indicator, then there's
fundamental report warnings which may lead the market by weeks but these are only
warnings and cannot pinpoint any particular day, that's when I look at swing charts
to confirm a change of trend, attempting to use swing trading exculsively leads to
inevitable false signals and conflicting intermarket analysis.

tomorton · Oct 22, 2008

Hi vergis92 - The FTSE100 has formed a very credible swing high today but you might (I hope) be looking at another index - I admit the S&P and Dow are not showing clear moves up or down over the recent 2 weeks.

I like swing trading, as it does not demand much screen-time, its readily capable of being developed through realistic objective back-testing of available data and charts, and its less stressful than the instant decisions of daytrading. But a swing high is a good sell signal: can you not short the market when the high is made and price falls back into the downtrend?

vergis92 · Oct 22, 2008

tomorton said:
Hi vergis92 - The FTSE100 has formed a very credible swing high today but you might (I hope) be looking at another index - I admit the S&P and Dow are not showing clear moves up or down over the recent 2 weeks.

I like swing trading, as it does not demand much screen-time, its readily capable of being developed through realistic objective back-testing of available data and charts, and its less stressful than the instant decisions of daytrading. But a swing high is a good sell signal: can you not short the market when the high is made and price falls back into the downtrend?

Hi,

From what I know and have back tested on swing theory, a reliable swing high is a sequence of 3 or more up days, (up meaning higher high and higher low)
then if price retreats and consilidates lower (important) and then takes out that swing high that will be a buy signal, a direct breach of the high without few days of consolidation also suggest a false breakout.

Looking at nasdaq and US indices, no such sequence of 3 up days yet,

This is gann-derived swing theory, works great in a trending market but it's a failure
in a ranging market as it has strict criteria so as to filter out minor/false turning points
(by the time you get a buy you are already on top of range...)

do you believe these definitions could have some logic, or is just another opinion?

tomorton · Oct 22, 2008

Hi vergis92 - I agree with the definition of a swing high / low. And yes, the US is not showing a clear decsion yet. As these 3-day-based signals can be so far apart I also use short-term swing signals based on a 2-day or 1-day pattern such as a key reversal day or whiplash etc., e.g. some of the signals in Street Smarts by Raschke & Connors.

I know the 3-day swing pattern is not supposed to set up well in ranging price action but actually the FTSE100 has not shown a proper swing high for a long time until yesterday - and the price action has been consistently downtrending.

vergis92 · Oct 26, 2008

I'd be really pissed off and surprised if the market doesn't bottom and form that swing high this
week, so far it's only given relief rally rather than reversal, I bet it will rally when everyone feels
most intimidated and fear is at peak, yesterday the newspapers , TV, all reported as if a disaster
was to come, but I'd rather stick to the old saying ' buy the rumor-sell the news'

No decent swing high formed yet

vergis92

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vergis92

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tomorton

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vergis92

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