Swing Trading Tutorial- Make $500 a Day!

Stocks trade in cycles, which means they go up, and they go down. They never go in one direction "forever". After the 7th consecutive day in one direction, the price will reverse almost 91% of the time.

Now I've seen this trade work well with almost any stock, but it works best on indexes. So I recommend trading the Dow, S&P500, Nasdaq. (I trade DIA for the Dow, and SPY for the S&P but this is just a preference). Usually in swing trading tutorials you'll see any number of complicated set-ups, but I've found that the simple trades like this work best.

Trade Set-Up:
1. Find a stock that has been going up for 7 consecutive days
2. Sell short at the end of 7th day
3. Buy back at the previous low

(reverse for long trades)

Note: This trade may not happen as frequently as others but it is VERY effective. Don't be fooled by its simplicity, this trade works like magic. And I guarantee you won't find this is many other swing trading tutorials.

This trade has the potential for large gains, so watch out for these forming. If you play them right, you be laughing all the way to the bank. A broken trend line is an very good indication (but not 100% accurate) of an impending price reversal. That mean the opportunity for some truly amazing gains.

Trade Setup:

1. Buy/Sell when price breaks trendline
2. Place Stop slightly above the recent high
3. Exit is at beginning of trendline (yellow line)
4. Make sure Risk/Reward ratio is greater than 2:1!

Note: Example trade is a short. Short sell when price breaks the trendline, and buy back at yellow line.

Important Tips:

* Long Term Direction should be with the trade, therefore the trendline should be a retracement of the long term direction

* Make sure trendline has at least 3 contact points

Learn to master this trade and you'll have a powerful weapon at your disposal.

Trade Set-Up:

This is one of my favorite trades in the swing trading tutorial because it is one of the most consistently profitable setups. Find a stock that price is close to the 200 day simple moving average (SMA). Stock prices will usually bounce of the 200 SMA, so buy when its close and place your stop a couple percent points below the moving average.

Most institutions trade using the 200 simple moving average, which is why this trade works so well. The 50 moving average can also be used, but be careful, it will not be as effective.

Important Tips to Improve Trade:

* If the moving average is angled in the direction of the trade (for longs, SMA angles up), it improves the likelihood of a bounce.

* If the stock has recently bounced off the 200 SMA and didn't go much higher, leave it alone.

* Get out of trade only if it CLOSES below the average. Most times price will fall slightly below then rebound, so be careful with your stops!

Note: If the price blows past the 200 SMA that's a good sign it will continue in that direction, so always stick with your stops. NEVER, and i mean NEVER, change or remove your stop. I have personally payed a lot of money to learn this lesson and I know you will be tempted to do this, but don't give in!