What Conditions Are Suitable For Swing Strategy & Trend Following?

 

The swing strategy method will be very suitable if the shares are in the consolidation phase. Remember, when the market is in a phase like this, you can't buy & hold, especially if you use the breakout buy method.

Then how do we know if the shares are in the consolidation phase?

You can install the trend optimizer indicator in your Tradingview . If the trend color shows many colors (aka a hodgepodge), then this stock is in a consolidation phase. If we use the trend following method in conditions like this, then we will get false breaks more often.

Like the example chart above, a swing strategy is the right trading option for BULL stocks. If the price drops to the support area, then the trading plan is to buy on weakness (blue arrow). So when do we sell it? When the price rebounds to the resistance area (red arrow).

But what if the stock is uptrend? So, don't trade using the buy low sell high method. The most suitable method when the stock is uptrend is to use the trend following method. Just buy & hold as long as the stock is uptrend.

If we use this method, then the profit we get can be maximized.

Like the TMAS stock example above, buy & hold as long as the stock is uptrend is the right choice compared to the swing strategy method . Buy when the resistance breaks out (blue arrow) and sell only when the price breaks out the support (red arrow).

How do we know if this stock is worth buying & holding ?

1. Check the history during the rally. Usually stocks that are suitable for trend following are when the price is in the uptrend phase. The support continues to form higher lows (orange arrows).
2. When the stock is rallying, the trend optimizer usually shows a more solid blue color, not a hodgepodge (box orange).

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