Use any Filtering website or software to review all the stocks in the S&P 500 and/or Nasdaq 100…
Finviz.com
Objective: Build a list of Stocks with good volatility & movement and liquidity
Task: Review Daily Charts for Market Cycle Phases 1 -4
Hint: Always look for Stocks with 10% or greater price moves.
Also look for Stocks with a period of time (i.e, longer the better) in a tight range.
Use Market MAPS or Bubbles to identify outliers of Stocks.
One of the most important strategies a Swing Trader can use is to create additional sources of profits because the markets are not always favorable for trading and not always trending.
Using the Market Cycle Analysis and framework, create a list (inventory) of stocks, ETFs, FOREX pairs and even Futures contracts.
Start with a very manageable list of at most 5 Stocks, 5 ETFs and 5 FOREX pairs (total 15).
Easy to make profits once you know...what phase the Stock is in!
Examples include Tesla, BABA, AAPL...(i.e., all in Phase 2 - Uptrends)
Note: All the the following data is for illustration purposes only.
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This step is extremely important and should be done with diligence and detail.
Conduct a macro and micro analysis of each security and identify which phase of the Market Cycle each one is in.
Group all the similar phase securities together. Conduct a macro and micro analysis of the Broad Markets.
Now, simply using the Market Cycle framework, start Swing Trading with the trending phases 2 and 4 to start generating recurring income...immediately.
Eventually all of your stocks, ETFs and FOREX pairs will cycle through the Phase 1's and move into the Phase 2's for you to start trading them LONG. Similar, all the securities on your list will move from a Phase 3 into a Phase 4 for you to start SHORTING them.
Once you get familiar with the steps...it will take you just a few minutes a week to find the right trades...and just keep following them through all the phases...1-2-3-4.
Use these sub-list of securities to start trading available Options for incremental income.
Buy Calls for the sub-list of securities in Phase 2. I strongly recommend buying in-the-money strike price contracts for faster profits!
Buy Puts for the sub-list of securities in Phase 4. I strongly recommend buying in-the-money strike price contracts for faster profits!
Primarily use a macro set of time frames (i.e., Weekly and Daily) to execute trades and manage them. Intra-day trading requires more tools and capital to consistently generate income.
As each security goes through each phase of the Market Cycle, follow each market cycle phase with your Master the Market Cycle User Guide rules and conditions.
Now as time go by and you begin to get familiar with the Market Cycle Analysis, buying securities in Phase 2's, shorting securities in Phase 4's, and patiently waiting in Phase 1's and Phase 3's for each security...you can repeat this PROCESS over and over for recurring income.
Notice that when security XXX is in a phase 1's or 3's, you simply move over to the other securities that are in phase 2's and 4's.
Secretly in the markets, this is a simple version of how "money flows sector to sector", and all you need.
Not that fancy, complicated stuff...smile!
Every Day we use the following Swing Trading Strategies...for Quick Profits!
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You can use the same strategies that we use for trading the ES E-mini Futures (i.e., ES 5 Minute Complete strategy).
You must specifically identify the mini-Market Cycle phase for the Stock or ETFs you are trading.
If you are in a trending phase 2 or 4, count the number of flag patterns or consolidation, range-bound areas in these phases.
Do not buy CALLS or PUTS after 2 occurrence of any retracements or pullbacks….because the momentum should be starting to diminish.
Only buy CALLS when the price action just came out of a Phase 1 (W pattern, i.e., Double bottoms after a downtrend with lower highs and lower lows) and breaks the neckline. Only BUY CALLS when price action is above the Opening Bell.
Only buy PUTS when the price action has just came out of a Phase 3 (M pattern, i.e., Double tops after a strong uptrend with higher highs and higher lows) and breaks the neckline. Only BUY PUTS when price action is below the Opening Bell.
Scalp Trading options usually can only be consistently profitable in “high-flying Stocks“….Stocks with high ATR (greater than 2 points) on the intra-day time frames. Otherwise the Option prices will not have enough volatility to move and create profits above your entry.
Remember, Option spreads can be excessively wide!
The other alternative, which is not very good, is to increase # of contracts and try and hold the positions overnight if and only if you are in a Phase 2 or Phase 4 on both macro and micro time frames.
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Using a (macro) Weekly and/or (micro) Daily Chart Analysis…apply the Market Cycle Framework to the Stock or Indices symbol. |
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Simply identify the current price action and the Market Cycle Phase you are currently in and use the previous simple tactics for trading Options. |
Buy Calls for the sub-list of securities in Phase 2. I strongly recommend buying in-the-money strike price contracts for faster profits!
Buy Puts for the sub-list of securities in Phase 4. I strongly recommend buying in-the-money strike price contracts for faster profits!
Chart Analysis Examples
