Trade Strategies for an Unstable Market

For most traders, swing trading typically means holding positions open for a day or more. Sometimes a week.

But when the market begins the cycle of uncertainty, its often a good strategy to take profits much sooner than usual or go to cash and wait out the lack of confidence.

If you are in the process of developing a sound swing trading strategy, it might be a good idea to include a system that helps you identify when the market (sentiment) is shifting before you begin to sustain losses.

For example, let’s say you prefer to trade from the 4 hour chart. You prefer this time frame because it doesn’t require you to sit in front of the computer screen for 10 hours or more at a time, but you also prefer to bank profits a little sooner that trading from the daily chart.

The stop loss placement, even on a 4 hour chart, can be much larger than most day traders are used to. Since preserving capital and trade management are important, you can drill down into the smaller time frames like the 30 minute chart to identify specific ranges that might indicate the price trend is shifting from a technical perspective.

You can set price alerts or trend line break alerts (depending on the chart program you use) and then analyze the data if and when it occurs.

Another system you should include in your trading methods are to realize specific price zones where traders will typically close out positions either with profits or as stop loss placements.
These areas could include Fibonacci retracement levels, Fibonacci extension levels, pivot points and psychological levels.

Additionally, you can use the US futures to try and identify potential changes in the markets.

Your ability to identify price levels that can possibly cause temporary reversals or significant bounces, will help you lock in profits in an otherwise uncertain and directionless market.

-Upshot Trade Signals