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SWING HIGH is when a price went up, then stopped and went back down. The high point where it stopped becomes a swing level. In the SEES template, some stronger swing high levels are marked by an indicator that plots green dots. These are not the only swing points that can be considered for a swing entry. Entry on a swing high/long is a buy 1 to 3 ticks above the swing level with 1 tick being a more aggressive entry and 3 being more conservative. The stop is 20 ticks initially.
SWING LOW is when a price went down then stopped, and it went back up. The low point where it stopped becomes a swing level. In the SEES template, some stronger swing low levels are marked by an indicator that plots orange dots. These are not the only swing points that can be considered for a swing entry. Entry on a swing low/short is a sell 1 to 3 ticks below the swing level with 1 tick being a more aggressive entry and 2 ticks being more conservative. The stop is 20 ticks initially.
TIP: When there is exceeding volume as the price approaches the swing level, the trade has a higher chance of profit.
SWING OUT OF CHOP TRADE When the market chops up and down and does not really go anywhere for a period of time, when it finally breaks the high or low of that chop zone, it will usually be a great scalp and often produce trends as well. Drawing a box around the chop zone or placing lines at the highs and lows of the chop zone make it easier to see. The trick is not to be lured in to a fake breakout.
ALL CHOP IS NOT CREATED EQUAL: This screenshot shows how the chop in the box on the left is several bars of chop going up then several going down. At one point it breaks the low of the chop in a fake breakout. The price dips just low enough to engage you in a possible breakout swing trade to fool you into thinking it will continue to go, then turns around and continues to chop. Be very careful in chop like this. It resembles a snake slithering around. You have no way to know what he’s thinking. There will almost always be a point of a fake breakout. The box on the right side shows a tight chop that resembles a snake coiling, you have know what is on the snake’s mind, he is getting ready to strike, i.e, break out of chop. Below the chop it is settlement in this case. The entry here would be a sell 3 ticks below the settlement level. Setting the entry three ticks above the high on a buy and three ticks below the low on a sell is a must for chop breakouts. This will make it reasonably sure to miss any bounces and get on the actual breakout.
TAKING THE BEST OF THE BEST SWING SETUPS:
Multiple confirmations are the absolute best when breaking out of chop as this screenshot shows below.
Recap videos of trading chop and trading out of chop:
To go along with that THT on seeing chop, here are some tips regarding tight chop bounces, specifically, when conditions are best to try to trade it and when to stay away. These are quick little 10 tick bounces. The entry is right at the top of the zone for a sell or bottom of the chop zone edge for a buy with the stop just on the other side of the chop zone. I enter these as soon as I recognize consistency of the chop pattern with the market oscillating back and forth. After 3 or 4 bounces, stop. Wait for the market to change. At that point, it is likely to give you at least a 20-tick mini trend after that tight chop, maybe a full-on trend. Let the indicators and setups clue you in on what might happen next. If the market does not give at least a 20-tick run on a breakout after that consistent tight chop, be ready to look for an entry in the other direction. This is not common with tight chop to have a fake breakout like it is with wide chop, but it happens.
This shows where to place an entry and stop
NOTE: There are THT videos on chop from the conference room in the Swing Trades Tips and Tricks section.
