Swing Trading Strategy

This is a strategy that can be used on any timeframe, but personally, I prefer the hourly or 4 hours charts. The objective is to buy pullbacks during an uptrend and sell pullups during a downtrend.

1) Plot a 144 period moving average, triangular, exponential, weighted, adapted, whatever. Type of MA has no big importance, we use it to provide a price level only.
2) Plot pivot highs/lows
3) Plot a Laguerre RSI with default values (weighted close, .62) (not necessary, can be used as additional confirmation)

4) If price is above the MA we look to go long, if below, we look to go short
5) Draw a fib retracement (with 38.2, 50, 61.8 and 78.6%) level on the last significant swing

5) Wait for market to return back to the MA (important there should be at least 2 pivot highs during a pullback or 2 pivot lows during a pullup, see below)

6) Draw a tentative trendline through pivots highs/lows. This trendline should not be penetrated until price reaches the MA (otherwise you should cancel and replace)

7) Enter after a break of the trendline, after rebound on fibo/MA level (Laguerre RSI can be used for confirmation)
8) If long set the stop 1 pip below the most recent pivot low, if short set it 1 pip above the most recent pivot high (don't forget to include spread, if needed)

9) Immediately after taking the position, draw a new fibo retracement (38.2/50/61.8/78.6) on the last pullback/pullup

10) Trailing stop rules:
When price reaches 38.2%, set stop at breakeven
When price reaches 50%, set stop 1 pip below (if long) or above (if short) 38.2% level
When price reaches 61.8%, set stop 1 pip below (if long) or above (if short) 50% level
When price reaches 78.6%, set stop 1 pip below (if long) or above (if short) 61.8% level
When price reaches 100%, set stop below (if long) or above (if short) 78.6% level
If price breaks the 100% retracement, then set stop 1 pip above/below previous bar's high/low (note, if the 78.6% stop is closer, then don't move the stop)


Source By Mike