Weekly Swing Trading Techniques and Principles

Swing trading is a profit-making method that involves buying high and selling low. However, in practice, swing trading techniques are often difficult to master with simple methods, and the timing of swing operations is not strictly defined—some traders use weekly charts, while others use monthly or quarterly charts.

Weekly Swing Trading Techniques:

Technique 1: Breaking the Watershed
When a stock has been trading below the downward-sloping 60-day moving average (MA) for an extended period, the first significant breakout from a mid-term low, crossing the 60-day MA (acting as a watershed), followed by a pullback near the 60-day MA, presents an excellent short-term buying opportunity.

Technique 2: Horizontal Measurement
After a stock experiences a rally, if it enters a strong sideways consolidation without a significant pullback, and each consolidation phase shows trading volume close to or equal to the volume of the largest bullish candlestick before the adjustment, then when these sideways candlesticks are supported again by the upward-sloping 10-day MA, it becomes another absolute short-term buying point.

Principles of Weekly Swing Trading:

1. Time the Market, Buy on Dips
   Since the market is in a repeated bottoming process, stock indices are highly volatile, and any minor disturbance can trigger panic selling. Buying on dips is often a wise strategy.

2. Monitor Sector Rotation, Select Stocks Carefully
   Market observation shows that sector rotation patterns often persist like waves—from new energy concept stocks to solar energy concept stocks, all exhibit wave-like trends. Thus, timing entry into emerging concept stocks is a good way to secure short-term profits.

3. Know When to Stop, Sell on Rallies
   A swing refers to the difference between a stock’s high and low prices over a certain period. Whether in a bull or bear market, such opportunities exist, but they favor quick-reacting and accurate investors. Selling at peak divergence is a more rational choice for those who can identify swings before sustained upward volume appears.

4. Observe Trends, Control Position Sizing
   The key feature of swing trading is avoiding full-position trading. Before a market reversal, traders should act like "guerrillas." In short-term or balanced markets, capital allocation should be around 30%, increasing to over 50% during strong, volatile trends.

5. Know Yourself and the Market, Adapt Flexibly
   Short-term traders focus on intraday and daily charts; medium-term traders watch weekly and monthly charts (e.g., the 60-day MA); long-term investors track half-yearly and yearly MAs. Short-term traders prioritize speed, while medium- to long-term traders can capitalize on larger swings. Adjust your swing trading rhythm based on personal style and mid-term market trends.