Video: Swing Trade Review ~ Cycle Low BIDU

With the right trading tools and indicators there can be a lot of clarity to your trading set-ups.

Take a look at this perfect cycle low trade set-up:  

Video:  Swing Trade Review ~ Cycle Low BIDU

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P.S. If interested in learning more about swing trading click the link below…

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To Your Success,

Larry Gaines
CEO and Founder
Power Cycle Trading

Is The Risk Worth The Reward?

 How to Calculate Risk Reward

One of the 9 steps in the Power Cycle Trading™ Plan is to know your potential risk for any trade before entering it.

The relationship between risk and reward in trading is not unlike that in any other form of investing: The more risk you take, the more return you are likely make. It’s that simple.

Safe investments offer much more certainty, but are also plagued with low returns. And what is “safe” now anyway?

This paradigm drives traders to refuse to settle for merely low returns, especially with the long term return of 5% the market delivers with buy and hold for 10 years with good timing, or worse, the 2% to 5% pretax return a bond fund delivers…with huge and looming risk once interest rates rise.

As traders, our goal is the alpha…so, we use the tools at our disposal with a goal of something much better than mediocre

Knowing your risk reward is such a tool. It’s a simple and basic tool, yet it is often overlooked by traders because, let’s face it, calculations are just not as exciting as the next perfect trade setup….

But the results you get from using some of these simple but very revealing tools can be very exciting!

At the core level, both risk and reward are commensurate with the market speculation.

The good news is that you can easily calculate the risk-reward ratio to control risk and protect your trading capital. Here’s how.

First, take the amount you want to invest in a single position. This is the amount you can lose if the market moves in a direction that you do not want it to, without any hedging protection.

Then simply divide this amount by the amount of profit you stand to make.

So basically, you are dividing risk by reward, and getting a ratio that tells you how much reward a particular investment gives you for a certain level of risk. The lower this ratio, the better the investment.

Let’s say you’re considering a particular trade. You stand to lose about $100 but the potential profit from the investment is $200. This seems like a pretty good deal, and if you calculate the risk-reward ratio of this investment, it will come to 0.5, easily calculated by dividing your risk of $100 by the potential reward of $200.

But will the market move how you expect and want it to? Can you accurately pinpoint how much you stand to make in the next few hours or days that you’re in the trade? The answer is not for certain, but you can definitely use probability tools to increase the likelihood of success.

And you can also hedge a position by buying or selling option contracts to protect your capital. This may reduce your profit, but it reduces your risk.     

While calculating risk-reward gives you a very good idea of the desirability of different investments, and an excellent basis for comparison, it no way guarantees anything.

Without this uncertainty, there would be no ‘risk.’ Thus, you are not to look for absence of risk, but reward that adequately compensates for the risk, and ways to lower potential risk by using tools that provide probability or hedging, or both. 

Protect your trading capital by always knowing your risk reward beforehand. Seek ways to improve any risk reward with simple option strategies. Be disciplined and smart with your trading.  

Want to trade live with me and get market updates with insights that you won’t get anywhere else?  Then be sure to click here for more information!

Sleep, Golf and Other Super Important Factors for Swing Trading

swing tradingWhich chart time frame is best for your swing trading based on question #1?

 

Your may know from my previous post that question #1 is: What time frame have I chosen in my overall trading plan based on my schedule, lifestyle and natural cadence?

 

If you missed this article, you can click here to read it.

 

Now that you’ve defined your trading time frame based on your life factors and chosen trading style, you can choose the chart time frames that deliver the best information for your trades. This may seem obvious, but it’s a question that I get asked often in my webinars. (If you haven’t registered for my swing trading free webinar, you can register by clicking here)

 

As my readers and members already know, I always recommend that you start any trade consideration with a long term chart to get an overall sense of trends. For this prospective, the weekly and the daily charts are used.

 

Why fight the long term trend of a security or an overall market? Being in sync with the overall trend increases your probability of winning trades. It’s also just easier to trade in line with the overall trend.  

 

Having said that, the basics are outlined below from shortest to longest swing trading time frames:

 

1. Short Term Intraday Swing Trading

 

Intraday trading strategies vary based on whether you want to come into the market on the open and leave by 10:30 Eastern, or whether you want to place a trade shortly after the open, go play a few rounds of golf, and come back to close out your trade before the market closes.

 

One of the best traders in my trading room a couple of years ago was committed to being finished with his day’s “work”, or trading, by 10:30 Eastern or $500 a day, whichever came first. Some days, he was done at 9:45 Eastern. He was very disciplined about this goal making him an excellent trader.

 

Again, this timing decision ties back to your lifestyle. For the really short term trades, two minute charts are ideal. In our trading room, we love using tick charts for short term intraday trades, which are based on the number of trades, vs. a specific time frame, as is the data for minute and daily charts.

 

2. Longer term Intraday Swing Trading

 

If you’re that person who wants to squeeze in some golf or extra sleep (or your job!) during your trading day, an hourly chart is ideal.

 

The transition from intraday to several days involves a decision about whether you want to hold positions overnight or not.

 

When I ran our international trading group, we closed all positions daily. This inherently reduces risk since you’re protected from whatever might happen on a global basis over night that will rattle the markets. We traded hundreds of millions of dollars’ worth of securities, and our rule was to close out…always.

 

What’s your rule?

 

This decision ties back to your lifestyle and your time frame. If you’re looking for longer term results, then holding overnight is required. If your goal is several short term gains each week, then closing out positions daily may make more sense.

 

Remember, trading for yourself is about creating a lifestyle you enjoy. No one likes to be stressed and tired. If you’re awake worried all night about what’s happening across the globe, then overnight positions can ruin your life unless you get your fear under control.

 

3. Swing Trading over Several Days or Longer

 

If you’re that person who wants to check the market before or after the open and close, or maybe a quick position check in at lunch, then you’ll want to use daily charts. If you trade during the day at all, you may want to use the daily in conjunction with an hourly chart.

 

The great news is that a good system works across multiple time frames. This makes it easy to day trade during the winter season and swing trade during summers so you can spend time outdoors or with your family.

Again, your decisions should always stem from why you chose to trade your own account in the first place: to create the life that you want.  

 

If you like this and want to learn how to swing trade then click here register to attend my free webinar where I’ll be sharing insider strategies that get results. 

 

 

 

 

 

 

 

5 Questions for Swing Trading

Must Ask Question #1 for Swing Trading: What time frame have I chosen in my overall trading plan based on my schedule, lifestyle and natural cadence?

This question is an important one because it allows you to trade from a position of overall focus and clarity. Yes, these words sound a little “woo woo”, but what difference does trading really make if the activity of trading and the related income are not aligned with your overall life goals?

The point of trading is to build wealth working when, where and how you choose. This question allows you to trade with the end in mind; wealth accumulation and a great lifestyle.

Getting clear about the end result allows you to easily see the best time frame for your swing trading. You sort of back into the strategies and time frames that work best for you by first recognizing your life factors.

Let’s look at each of these factors, schedule, lifestyle and your natural cadence, to see how day trading, swing trading or swing investing best fits into those factors for you personally.

First, let’s talk schedule….

Since trading requires you to be alert, highly focused and playing at the very top of your game, it only makes sense to trade when you are best functioning this way naturally. Only you know when you’re at your best.

Are you a night person or a morning person? If you function best when you sleep from 3 am until 11 am Eastern US time, why even consider a trading time frame that requires you to be placing trades when the market opens?

Likewise, if you know that you have other business or family commitments at 4 pm Eastern Monday and Thursday, don’t choose a strategy that requires you be present and active for the close every day.

For that matter, if the highlight of your life is golfing with your buddies every Friday afternoon, then maybe day trading weekly options isn’t the best choice for you.

Does this mean that a person cannot trade, or has to adapt their schedule so they can be a more active trader? Of course not, it simply means that they should adapt their trading style and time frame around their optimal schedule.

Make your trading schedule work for you, not the other way around. There are many potential trading time frames. Choose yours with an eagle’s eye view of the life that you want.

Second, a factor closely related to schedule is lifestyle….

What swing trading time frame works best for your lifestyle? I’ve traded with ER doctors in our trading room who are at the top of their game on their medical off days. Swing trading throughout the day works perfectly for them.

On the other hand, we have many members who work full time, with young children and a spouse. Checking their positions in the evening after the activities of the day allows a nice reprieve from constant interaction with others. Swing trading over several days is ideal for this schedule.

Swing investing over several weeks also makes sense for these super busy executives, while also laying the foundation for a smart retirement income on a flexible schedule in the days ahead.

Third, what are your natural tendencies?

Does it make you crazy to sit at a desk for more than half an hour a day?

Or do you thrive in an office environment where you can relax and watch the markets throughout the day with a large cup of joe?

Do you enjoy watching the markets and hearing the latest news?

If this is you, intraday swing trading suits your personality.

Or do you prefer to check positions once or twice a day, maybe at lunch time and on the market close? Intraday swing trading can still work well for you, but maybe swing trades over a couple of days make the most sense.

Do you only want to check your positions once a week? Then swing investing definitely makes sense for you. Can you do it? Of course you can, but you may want to use weekly charts, which I’ll address in the next article in this series about choosing the right chart time frame.

Why make things harder than they need to be to live a balanced and full life? There’s no need to, and that’s one of the very best things about being a trader.

You are in charge of your strategy based on what works best for your own schedule, lifestyle and cadence.

And we all naturally perform best when we’re fulfilled, our energy level is high, and we feel congruent with our life goals. Why not take advantage of these attributes to ease the path of wealth creation from swing trading?

Want to know which chart type is best based on your answers to the 3 questions above? I’ll be sharing this and more in my upcoming free Swing Trading webinar. Click here to register here now because spaces are limited and these webinars always fill up. 

 

Video: Stocks Coiled for Upside and Downside Moves

 

In this market I’m trading a more balanced portfolio.

 

I want to trade a blend of the strongest, most coiled stocks for upside breakouts and stocks that have lost their upward momentum and are rolling over to the downside for short set-ups.

 

See my list and add them to your watch list:  

Video:  Stocks Coiled for Upside and Downside Moves

 

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Also, Monday night, September 22nd at 7 PM EDT I’ll be nerding out discussing free Option Tools plus my Favorite Option Income Strategies in a free webinar.

 

In a hurry? 

Register NOW

 

These free tools will help you to:

  • Forecast Pricing Probability
  • Structure Trades for Best Profit Targets
  • Reduce Trading Risk

 

So join me for this interactive free webinar:

“More Income with Less Risk ~ Option Income Strategies & Option Tools Used”

 

Register HERE

 

To Your Success,

Larry Gaines
CEO and Founder
Power Cycle Trading

Video: FLSR’s Strong Price Action = More Upside Potential

 

This past Wednesday I sent out a video on being long FSLR and short CREE. Both turned out to be nice directional plays and their directional trends are still intact.

 

FSLR still looks very promising and based on just having triggered long out of a weekly squeeze there still looks to be more upside potential ahead for this stock.

 

Have a look… 

Video: FLSR’s Strong Price Action = More Upside Potential

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P.S.  If you are not a Power Cycle Trading Club Member then I’d like to invite you to join.

 

Power Cycle Trading Club $7 Order Now

Here is what all you’ll receive:  

  • Virtual trading room – Open every day with Larry
  • Daily Market Update Videos for both Day and Swing Traders
  • Alerts for Potential Setups, Breakout’s and Trend Reversal’s
  • Live Weekly Q&A with Larry
  • One monthly Q&A at night
  • Quarterly Member’s Bonus Surprise
  • Monthly Award Points – $20 credit for each month of membership.  Credits can be applied to all current or future courses
  • Discounts and Priority Access to upcoming courses

To Your Success,

Larry Gaines
CEO and Founder
Power Cycle Trading

Video: Trade Short or Long ~ CREE or FSLR

 

The broad markets have had a great move up and have been over extended making trade selection more important than ever. In this type of market environment you should have a watch list of short and long trading candidates.

Watch this video for two nice looking trade set-ups, one short and one long.

Video: Trade Short or Long ~ CREE or FSLR

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If you are interested in learning a great deal more about how you can make better trade selections then join me tonight for my live “Power Cycle Trading Model Profits Course.”

 

Register for Live Course Now

 

To Your Success,

Larry Gaines
CEO and Founder
Power Cycle Trading

Crude Oil Cycle Low & USO

Trading crude oil can be tricky and for me the best way to trade crude is by identifying its cycles.

I use my “Power Cycle Trading Model” and “Scanner” and when my Cycle 3 Indicators starts to turn up I start to get in using the ETF, USO.

Watch this video to see what I was seeing and what I told my Trading Club Members….

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Video: A Market Key Reversal Pattern ~ But Is It Enough?

 

The major market indexes all put in nice reversal bar patterns based on Friday’s strong close but is this enough?

 

Let’s take a look at the charts and the technicals…

 

Video:  A Market Key Reversal Pattern ~ But Is It Enough?

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To Your Success,

Larry Gaines
CEO and Founder
Power Cycle Trading