Stochastic, MACD, Bollinger Bands Plus Day And Swing Traders
Learn How To Day And Swing Trade Using Stochastic, MACD, Bollinger Bands Like A Pro
A momentum day and swing trader relies on the speed of the price-action. In this article, I will share with you tips and tricks that will open your eyes as a momentum trader. Apart from using a momentum indicator to catch speeding price-actions, there are other effectively ways.
Momentum Trading Tips One
After setting both the midpoint and ultimate price targets, be ready to catch the fast price action that often occurs between the second midpoint and ultimate targets. The momentum can quickly increase in that section as the price is completing the last lap.
Note that the second midpoint target is the midpoint target between the first midpoint and ultimate targets.
The momentum trading is based on the market principle that states that the price often speeds up during the last lap of a price move.
Do not worry now because it will become clearer to you as I share more momentum trading tips further down the line.
Momentum Trading Tips Two
The last section of the ABCD chart pattern is CD. The same is true for Fibonacci patterns such as Gartley, Crab, Butterfly and Bat patterns. A momentum trader can take advantage of the increase in the momentum during CD price-action. Note that it is not guaranteed that the momentum will surely increase above the average but there is a high probability that it happens.
Momentum Trading Tips Three
Are you familiar with the Elliott wave patterns? Well, during the formation of the C minor wave of the flat and zigzag wave pattern, a momentum trader can quickly be rewarded as the price picks up momentum. It is the same phenomenon when the momentum surges during the last segment of a multiple-segment pattern. The price often rushes to complete the race to the price target or final point of a pattern in the last lap of its course.
Indeed a momentum trader is not just trading a normal momentum but above average momentum price-actions.
Momentum Trading Tips Four
An above normal average momentum is also noted between 161.8% Fibonacci extensions and 200% Fib level. Therefore, a momentum trader can position himself to time the beginning of the surge in the momentum above the 161.8% Fibonacci extensions.
Momentum Trading Tips Five
You know that when a momentum indicator such as RSI, CCI, stochastic is overbought, most traders just sell. Well there are times when the price continues to rise with a high momentum even though the momentum oscillators are overbought. The speed of price can reach the highest level never seen before because most bearish traders are forced to close their positions.
That situation creates an unfair opportunity for a clever momentum trader. The same thing happens when bullish traders are forced to close their positions after the bearish momentum increases though the momentum oscillators are oversold.
It is not a nice thing to enter a trade and wait hours and days without seeing any momentum actions. It can be depressing sometimes. A momentum trader is a technical trader who understands when and where do strong momentum price-actions
start. It is possible to pinpoint the best momentum trading setups.
I hope after reading this article you will start a new journey as a momentum trader. If this article has been useful to you, feel free