Swing Traders

This trading strategy is purely based on technical analysis.

Hundreds of technical indicators can be found in books or on the Internet.

Keep in mind that each of these indicators belong to a specific family such as trendindicators, oscillators, momentum & volatility indicators and volume.

As an indicator is calculated based on historical quotes, an indicator will always be lagging. A trendindicator such as the MACD (Moving Average Convergence Divergence) indicates the actual trend but is 3 to 4 periods too late with its indication.

This leads us to the conclusion that a trendindicator does not provide good entry signals, but could be used to determine the exit of a trade as it would keep us in position as long as the trend remains and continues to merit our open position.

Oscillators such as the RSI (Relative Strenght Index) or the Stochastics tell the trader when a stock is oversold or overbought.

If a stock is overbought, a trader expects the stock to go downwards. Does the oscillator indicate an oversold zone, then the trader expects it to rebound and go up for a short while.

There are lots of oscillators. We will discuss 3:

• The "classic" RSI developed by Welles Wilder
• The "more" Dynamic RSI
• The Center of Gravity & Timing, the ultimate check