The foundation of my swing trading system is simple and repeatable. When the 2-day Exponential Moving Average (EMA) crosses the 6-day EMA, this is an entry signal (BUY). When the 2-day EMA crosses and closes below the 6-day EMA, (SELL). There are a myriad of other indicators I use which I will dive into in future posts, however, this is the basic approach. Below is a recent entry for a leveraged ETF – UPRO.

I use the MACD with the settings 2,6,0 (some programs like the settings 2,6,1). Configured with these settings, the MACD is essentially a moving average crossover signal. when the histogram just under the chart goes from red to green, this is a BUY signal. When the histogram goes from green to red, this is a SELL SIGNAL. In the UPRO chart, the entry was on 7/15/22 at 36.25. Today, 7/19/22 the closing price was 38.95. 7.4% gain for several days. I run a 3% hard stop on this trade and move the stop up as the price moves higher. Also if the MACD histogram closes red – you are out; no questions asked. If it is red its dead!

This approach works on any tradable asset: stocks, ETFs, Leveraged ETFs, futures, etc. It also works on any time frame. Below are some more examples.

The above chart is TQQQ, a leveraged Nasdaq 100 ETF, and shows a 7.07% gain. Remember, if the MACD closes red, it’s dead – sell it. A 34% decline in TQQQ followed the red (get out signal). If it closes red its dead – sell it. Shorts are possible here but I reserve this for future posts.

I purposely withheld the time frame and price axis to demonstrate a point. The basic swing trading system works on all time frames. Above you have leveraged ETFs and hourly, 30 minute and weekly charts.

If you take nothing else away from this post, sell when it turns red. When it is red it is dead! Sell it!

Future posts will go into money management, compounding, and other indicators such as RSI, Bollinger Bands and stochastics and TTM_Squeeze.

Happy Trading Everyone.