13_Fade Swings High Lows

Fade The Swing Model

1. Pinpointing Swing Points:

   • Swing Identification: Identify swing highs and lows on the price chart. Swing highs denote peaks where prices reach highs before declining, while swing lows represent troughs following a decline.

2. Seeking Confirmation:

   • Evidence of Reversal: Wait for robust confirmation post-identifying a swing point. This may involve observing technical indicators, candlestick patterns, or divergence signals, indicating the market's readiness for a change.

3. Adopting Contrarian Positions:

   • Positioning Against the Trend: Upon confirmation, take positions contrary to the short-term trend. Short at a swing high or long at a swing low, leveraging the market's tendency to rebound from extremes.

4. Strategy Execution and Adjustment:

   • Active Market Monitoring: Maintain vigilant market monitoring. Modify or exit positions based on evolving market conditions or upon reaching predetermined profit or loss thresholds.

     
     

Strategy Insights:

• Fading as a Profit Exit and Re-entry Strategy: Fading a swing point doesn't invariably signal the end of a move; instead, it can serve as an opportune moment to exit profitable trades. Waiting for a "ball bounce" movement provides an opportunity to re-enter at improved prices. Swing points frequently coincide with divergent highs or lows, signifying a potential reversal.

• Divergence Consideration: Divergence at swing points, where price action and indicators like the OTS Green Line move oppositely, validates a possible market turnaround. This dual confirmation enhances the strategy's efficacy, offering a clearer signal to fade the swing.