Position & Swing Trading: Weekly Charts

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If you're position or swing trading, it is a MUST to study weekly charts to confirm:

1. IF a bottom is developing

2. WHERE the bottom will complete

...to plan trades with strong reward/risk ratios.

For example, let's take a look at EGLX, which had a gap up at open on its earnings release:

1. Note that today's gap up is from a lower low in the downtrend. This particular bottom is not confirmed just yet. When it makes a higher low is when there will be lower risk for an entry.

2. The first resistance is at 3.27, but there's stronger resistance at 4.44--once the stock's price sustains that level, then the bottom will be complete, which is the best time to consider position trade entries.

Both resistance levels should be considered for swing trading potential...

First ask: "Are there enough points to gain from your entry point to warrant the risk of the trade?" If no, then move on to the next opportunity; maybe put an alert at the next resistance level to revisit. If yes, then which resistance levels are likely to cause profit-taking?



A step-by-step checklist that looks further than the entry is important for not giving back profits just as soon as you make them. Learn more at my website.