Swing Trading basics and advanced guides

The presentation **“Swing Trading”** offers a detailed overview of one of the most practical and effective short-to-medium-term trading strategies used in the stock market. It defines **swing trading** as a trading style in which positions are typically held for **2 to 6 weeks**, based on daily chart analysis. Unlike day trading, which requires constant monitoring, swing trading allows traders—especially **working professionals**—to capture sizable price movements with **lower stress and moderate risk**. The presentation highlights that swing trading strategies are **universally applicable** across asset classes such as equities, commodities, forex, and cryptocurrencies, making it a foundational approach to understanding **price action dynamics**.

It introduces two main styles: **Reversal trading**, where positions are taken after the market reverses its direction, and **Continuation trading**, where trades follow the existing trend after a consolidation phase. A major conceptual pillar of the presentation is the **Wyckoff Theory**, which describes the market’s cyclical nature through four phases — **Accumulation, Markup, Distribution, and Markdown**. During accumulation, institutional players quietly build positions, followed by an uptrend or markup phase. Re-accumulation occurs when the market temporarily consolidates within the uptrend. As the rally matures, the **distribution** phase begins, where large players offload holdings while prices remain high. Finally, **markdown** represents the new downtrend, often interrupted by **re-distribution** before repeating the cycle.

The slides emphasize recognizing **base formations** (accumulation zones) for reversal trades and using **sectoral analysis** as a top-down method to identify strong opportunities — encapsulated by the principle “**A rising tide lifts all boats**.” Instead of scanning every stock, traders should analyze sector trends first, then pick stocks showing tight consolidations or “volatility contraction patterns” using screeners such as Chartink.

Examples of **continuation patterns**—like **ascending and descending triangles, rally-base-rally setups**, and tight consolidations—illustrate how markets pause before resuming their trends. The presentation further distinguishes between **conservative** and **aggressive entry methods**. Conservative traders analyze stocks after market hours, entering the next day if a 15-minute candle closes above the previous day’s high. Aggressive traders monitor real-time price action and enter immediately once a 15-minute candle confirms a breakout. It also describes **retest entries**, where traders wait for a pullback to the breakout level (resistance turned into support), often confirmed by a **pin bar or bullish engulfing candle**.

Risk management principles form a core part of the presentation. It recommends **position sizing** of 5–10% per stock based on total capital, enabling diversification and capital protection. Traders with ₹1,00,000,

1. SWING TRADING

2. SWING TRADING SWING trading A STYLE OF TRADING WHERE WE HOLD ONTO OUR TRADE FOR 2 WEEKS TO 6 WEEKS. TIME PERIOD – 2 WEEKS TO 6 WEEKS TIME FRAME FOR ANALYSIS – 1 DAY

3. WHY SWING IN STOCKS? CAN GRAB BETTER RETURNS LOWER RISK LESS STRESS GOOD FOR WORKING PROFESSIONALS UNIVERSAL APPLICATIONS

4. UNIVERSAL APPLICATIONS THE CONCEPTS THAT WE USE IN SWING TRADING WORKS EVERYWHERE I.E. IN COMMODITIES, FOREX, CRYPTO AND IN INTRADAY AS WELL. SWING TRADING HELPS IN FORMING A GOOD UNDERSTANDING OF PRICE ACTION.

5. DIFFERENT STYLES REVERSAL IN THIS WE TAKE A TRADE AFTER THE TREND IS REVERSED. CONTINUATION IN THIS WE GO WITH THE TREND

6. WYCK OFF THEORY The  Wyckoff  method states that the price cycle of a traded instrument consists of 4 stages – Accumulation Markup, Distribution, and Mark Down.

7. TERMS TO UNDERSTAND WYCK OFF THEORY ACCUMULATION – area where larger players try to build positions and shake out smaller fish without causing much of a further drop in price, or the beginning of the new trend. UPTREND- The markup phase then follows, measured by the slope of the new uptrend. RE-ACCUMULATION - Pullbacks to new support offer buying opportunities similar to buy-the-dip patterns popular in modern markets. Re-accumulation phases interrupt markup with small consolidation patterns

8. TERMS TO UNDERSTAND WYCK OFF THEORY DISTRIBUTION - This begins as the markup  phase  ends and price enters another range period. The shares are being sold over a period of time—the opposite of accumulation. This time, the sellers want to maintain higher prices until the shares are sold. DOWNTREND - The slope of the new downtrend measures the markdown phase RE-DISTRIBUTION - where the trend pauses while the security attracts a new set of positions that will eventually get sold.

9. EXAMPLES FOR BASE FORMATION BASE FORMSTION IS ACCUMULATION BASICALLY A REVERSAL TRADE. AFTER A GOOD TREND, A BASE IS FORMED AND WE EXPECT A REVERSAL.

10. SECTORAL ANALYSIS “A RISING TIDE LIFTS ALL BOATS” FOR STOCK SELECTION INSTEAD OF ANALYSING EACH STOCK ONE CAN ANALYSE SECTORS TREND. ONCE WE ANALYSE THE SECTORS WHICH LOOK BULLISH, WE HAVE TO IDENTIFY THE RIGHT STOCKS IN THAT SECTOR. TO IDENTIFY THE RIGHT STOCKS WE HAVE A SCANNER WHICH HELPS US GIVE STOCKS THAT ARE CONSOLIDATING IN A TIGHT RANGE. ( https://chartink.com/screener/vcp-base-tight-area?src=wassup )

11. EXAMPLES FOR CONTINUATION WHEN WE ARE IN A TREND MARKET USUALLY CONSOLIDATES (RE-ACCUMULATION) AND THEN CONTINUES ITS TREND. DURING PHASE OF CONSOLIDATION WE CAN OBSERVE DIFFERENT STRUCTURES LIKE ASCENDING TRIANFLE – SAME HIGH BUT HIGHER LOWS DESCENDING TRIANGLE – SAME LOW BUT LOWER HIGHS RALLY – BASE – RALLY – TIGHT CONSOLIDATION

12. SOME POINTS TO KEEP IN MIND WE USUALLY LOOK FOR LONG TRADES IN SWING AND ENTER THROUGH CASH. WE CAN GO FOR SHORT TRADES AS WELL THROUGH FUTURES BUT FUTURES CARRY A LOT OF OVERNIGHT RISK. IN CASE OF FUTURES IF THERE IS A GAP UP/GAP DOWN OPENING IT CAN BE A CAPITAL DESTROYER DUE TO HIGH EXPOSURE TO MARGINS. SO IN CASE OF CIRCUITS FUTURES MIGHT TURN OUT TO BE A BOON OR BANE!

13. ENTRY CONSERVATIVE- FOR SOMEONE WHO DOES NOT HAVE TIME FOR KEEPING A TRACK FOR ENTRY IN A SCRIP CAN ANALYZE SCRIPS AFTER MARKET HOURS AND THEN ENTER NEXT DAY ABOVE PREVIOUS DAY HIGH IF 15 MIN CANDLE CLOSE ABOVE IT. AGGRESSIVE- IF SOMEONE IS ENGAGING IN MARKET DURING MARKET HOURS ONE CAN ENTER AGRESSIVELY AFTER 15 MIN CANDLE CLOSES ABOVE BREAKOUT ZONE.

14. CONSERVATIVE STEPS STEP 1: BREAKOUT OBSERVED AFTER MARKET HOURS STEP 2: NEXT DAY ENTER IF CANDLE CLOSES ABOVE PREVIOUS DAY HIGH ON A 15 MIN TIMEFRAME. IF WE DON’T GET AN ENTRY THE NEXT DAY WE WAIT FOR RETEST ON A DAILY TIMEFRAME AND THEN ENTER THROUGH SAME CRITERIA.

15. 1D TIME FRAME LOOKING AT THIS CHART AFTER MARKET HOURS BREAKOUT CANDLE OBSERVED AFTER MARKET HOURS

16. AGGRESSIVE THIS IS FOR SOMEONE WHO IS ACTIVELY ENGAGING IN THE MARKETS. WE ENTER ON THE SAME DAY. STEP1: SET AN ALERT FOR WHEN STOCK IS TRADING NEAR BREAKOUT LEVEL. STEP 2: ENTER IF 15MIN CANDLE CLOSES ABOVE BREAKOUT AREA. LT EXAMPLE

17. STOCK NEAR BREAKOUT AREA ALERT PLACED WHEN STOCK IS NEAR THIS ZONE 1000 SAY THE LEVEL IS 1000 ALERT PLACED WHEN STOCK AROUND 990 ALERT TRIGGERED 1D TIMEFRAME

18. STEPS ON THE SAME DAY OF BREAKOUT IF 15 MIN CANDLE CLOSES ABOVE OUR BREAKOUT ZONE WE WILL ENTER.

19. RETEST ENTRY FOR A FAVORABLE RISK TO REWARD ONE CAN WAIT FOR RETEST WE KNOW WHEN A RESISTANCE IS BROKEN IT ACTS AS SUPPORT RESISTANCE LEVEL THIS PINBAR SIGNIFIES THAT NOW THIS LEVEL IS ACTING AS SUPPORT

20. NO RETEST BULLISH ENGULFING ON SUPPORT

21. POSITION SIZING IN SWING TRADING WE SIZE OUR POSITION BASED ON CAPITAL. ONE CAN DEPLOY 5-10% OF CAPITAL ON ONE STOCK FOR EXAMPLE YOU HAVE 1 LAC ONE CAN INVEST 5000 TO 10000 IN ONE STOCK I.E. 5-10% WE CAN START WITH 5% AND IF THE MOVE GOES IN OUR FAVOR WE CAN ADD MORE

22. TRAILING SL WITH CONSOLIDATION WITH EMA

23. HOW TO RUN PROFITS WITH EMA FOR A LONG POSITION AS LONG AS OUR STOCK IS TRADING ABOVE EMA20 WE CAN STAY IN TRADE. FOR A SHORT POSITION AS LONG AS OUR STOCK IS TRADING BELOW EMA20 WE STAY IN TRADE IT IS ADVISABLE TO START RUNNING PROFITS WITH EMA ONLY AFTER RR1 IS ACHIEVED BECAUSE WE CAN SAY THAT NOW MARKET IS TRENDING IN OUR DIRECTION AND BEFORE THAT WE MAY GET MANY FALSE SIGNALS.

24. EXAMPLES

25. RETRACEMENT ENTRY CANDLE SL NEW SL NEW SL SL TRIGGERED