Swing Traders: At what time do you look for setups?

T

TraderGreg

I've been swing trading paper for a few weeks, and was just wondering at which point you look for setups.

I do realize that piercing levels in the first hour of trading is almost entirely usless.

So, I am only entering new positions, and therefore looking for setups between 11-12 Eastern and then for strong closing trends through levels after 2:30. I take a long lunch break in order to let the market develop, skip the periods of lighter trading, and of course to eat lunch.

I am a bit concerned about my 11-12 period, since it is both easy to be wrong at this time of day but even easier to miss the trade if the stock begins to take off hard.

My time frame is very generally 2-5 days, but I don't mind cutting it or letting it ride depending on how I see the market or trend holding up.

When do you look for setups and make entries?

Thanks for your help!
 
Quite similar to yours... The first hour is a graveyard for me 90% of the time but the 10% when some stocks leave you behind is tempting. I think if you have a general idea of sentiment, oversold, over bought conditions you have more conviction and likelihood for the trades to stick.. If you are buying an over sold condition or VERY neat setup with the sector behind you then taking the trade an hour into trading is ideal as long as you aren't buying flagpole where a stock has used up a good bit of what it is typically capable of in a bar.

I usually have the setups in mind the day before the potential breakout.

The books for swing traders suggest you take the trade the next day in favor of you direction... depends on the volatility of what you trade.
 
1) The lunch time "noon ballon" is generally a time for reversals because there are fewer participants in the market at that time.
2) Keep an eye on prior day's high and low prices to get an idea of followthrough price targets. Same thing with weekly and monthly numbers too.
 
Interesting. I'll look into that. I have done a studies of the pivots, though. They seem to accomplish about the same thing.

Thanks,

Greg
 
Quote from TraderGreg:

I've been swing trading paper for a few weeks, and was just wondering at which point you look for setups.
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I do not understand you use of "point". The point to enter a trade is where your particular method, whether mechanical or discretionary, gives you a signal. In general, entry points are not related to the time of the day. there are no rules about the trading activity of different time periods during the day. If you run a statistical analysis you will see that yourself. Sometimes during lunch hour things are slow but occasionally you get major moves. No strict rules.

I think you are mixing intraday and swing trading. If you are a swing trader, just use the open or close to enter trades. These are the most significant setup points for that type of trading. If you try to bottom fish or bargain the price, then you may end up missing many good trades.
 
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