Insights on Short-to-Medium-Term Trading: Methods and Disciplines of Swing Trading

To truly survive in the market, it can seem both complicated and simple. If you persistently adhere to the following principles, it’s hard not to succeed.

1. Always focus only on weekly and daily charts—ignore shorter timeframes (for medium-term trading).

2. Use only moving averages, trendlines, necklines, false swings, and pullbacks—ignore everything else.

3. Keep total position size below 50%, and single (commodity) position size below 30%.

4. Test positions—cut losses if wrong, add to winners if right.
   
   

An additional note: It’s better to trade with the trend and get caught only once than to chase small rebounds and get trapped repeatedly.

In trading, finding a good opportunity isn’t hard—the challenge lies in capitalizing on it. Even with a good entry, holding the position is difficult for several reasons:

• Excessive position size, leading to panic exits during volatility.

• Poor entry points, where a rebound forces an early exit.

• No clear exit rules, combined with emotional trading due to constant monitoring.

• Misreading the trend and trading based on assumptions.
  
  

I recommend keeping only four moving averages (300-day, 150-day, 75-day, and 30-day) on your chart and always trading in the direction of the 30-day and 75-day MAs.
When the MA direction is clear, enter near the 30-day or 75-day MA, and exit only when the trendline or neckline of the swing is broken. Keep position sizes below 30%. Only switch trading direction after the trendline, neckline, and MA are all breached and confirmed.

Additionally, scale into positions—exit quickly if wrong, pyramid into winners, and hold patiently until price breaks the trendline or neckline. Ignore fundamentals and price levels; just trade with the trend.

Here’s a formula for success—master it, and profits will follow:
Investment P&L = Win Rate × Position Sizing × Profit/Loss Ratio.

Key takeaways:

• Ensure a >50% win rate by trading with the trend and entering on pullbacks.

• Ensure winning positions are larger than losing ones by adding to winners and never averaging down.

• Ensure profits outweigh losses by cutting losses early and letting winners run.