Elite Swing Trades 101

[SwingKing]

Before we set up our first chart we need to go over a few things.When I first started using stock charts I wanted to have as many indicators and overlays as possible. I thought more was better so more I would have. My charts were so busy that usually I couldn't even see the price action. It wasn't until later when I learned about multicollinearity that I started to pear down on the number of bells and whistles and included on my charts.

Basically no matter what indicators you use these charts are only going to tell you three things, trend, momentum, and volume. That's it, there's no special secret magic wand secret squirrel stuff any of these charts are able to convey. One thing above all else that I should mention is that everyone else is looking at the same information that you are. They may be looking at it in a different format that they have for the most part the same information you did. So with that said we need a chart that is simplistic in nature and clearly indicates trend, momentum, and volume.

The reason that this is so important is because time and time again I see these charts that have countless indicators that all say the same thing and give a false sense of security. If one of the momentum indicators are pointing upwards than the rest of the momentum indicators should be doing the same thing so makes no sense to have five indicators that are measuring momentum and are telling us the same thing. Of course we want to confirm what are indicators of telling us but we don't want to do it with another indicator that measures the same thing.

I've included the following chart as a quick reference guide

Momentum: Rate of Change (ROC)
Stochastics (%K, %D)
Relative Strength Index (RSI)
Commodity Channel Index (CCI)
Williams %R (Wm%R)
StochRSI
TRIX
Ultimate Oscillator (ULT)
Aroon

Trend: Moving Averages
Moving Average Convergence Divergence (MACD)
Average True Range (ATR)
Wilder's DMI (ADX)
Price Oscillator (PPO)

Volume: Accumulation Distribution
Chaikin Money Flow (CMF)
Volume Rate of Change
Volume Oscillator (PVO)
Demand Index
On Balance Volume (OBV)
Money Flow Index