Every trading day after the stock market closes we review all the stocks and ETFs listed on the NYSE, AMEX and NASDAQ, over 6000 securities in all, and look for trading opportunities. As a byproduct of this process we generate swing signals based on Bollinger Bands, Commodity Channel Index (CCI), ADX and a couple of other technical analysis indicators as well as a few financial criteria.
This is an example of an algorithmic trading strategy using stock price history where our software determines when a stock has exhausted a short term cycle trend and is headed in the opposite direction. We use Bollinger Bands to provide rough cycle boundaries based on the stock's daily price action. We track over-bought and over-sold conditions and ADX directional movement indicators as well as CCI levels to more precisely time our swing trading signals. For stocks, as opposed to ETFs, we prefer companies that are profitable and that have a certain minimum market cap. We also ensure that the stock or ETF has enough daily volume to be considered actively trading and thus more likely to be a good swing trade candidate.
Our Swing Signals can be used for swing trading over days or weeks, short term trading or even as a source of ideas for day trading. Initiate a trade with one of our Buy signals and close out the trade with one of our Sell signals. We do not recommend shorting a stock based on one of our Sell signals.
Note that swing trading tends to have the typical risks associated with most short term trading approaches. A bad earnings report (we try to give you a warning when there is an impending earnings announcement for one of our Buy signal stocks), a negative macro-economic event or a general pull-back in the stock market can all cause one of our Buy signals to go wrong. This is why we provide a suggested STOP level at which the trade should be exited.
Using daily data, we generate Buy signals using the process described above. As part of the BUY signal we also generate the following data items:
Using daily data, we basically employee the reverse process as described for Buy signals. The current price, the ADX directional movement indicators and CCI levels are monitored and used to determine whether the swing trade has run its course or if the current price has hit the Stop price. We only generate Sell signals for our previously identified Buy signals so we provide a complete path from establishing a position to closing out the position.
Though our BUY signals are free, you must be a member of TradingStockAlerts.com in order to have access to the Swing Trading SELL Signals.
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