Curtis Faith’s Rebound Swing System. 我总结的，内容见内。 (谈股论金)  1818次阅读

作者: 伍点墨 , 发表于: 2017-03-30 (2801天前) @ 伍点墨

Curtis Faith’s Rebound Swing System
1. System Deion
1.1. This is a Swing Trading System. It is suitable for a smaller account, consumes less time, does not require lightning-quick decision-making. Unlike day-trading, which requires that you devote the entire day to trading, swing trading has a controllable pace and fits my trading plan—doing market research, develop other systems and exercise. Swing trading benefits from both intellect and intuition.
1.2. The repeatable nature of the emergent behavior in markets is the very source of the potential for profit. The most important emergent behavior: cycles, market inertia and momentum, and euphoria and despair. The premise of the rebound swing method is that the market generally moves several days in one direction after a rebound off of clear support and resistance. Therefore, this particular swing-trading method is well suited to range-bound markets. It is also suited for trading in the direction of the major trend during major bull- or bear-market moves.
1.3. The basic idea is to buy at the beginning of a rebound off a support level when the distance from the support to the resistance is significantly greater than the entry risk. The setup for the trade is clearly established support and resistance that represents a significant price differential between these two levels. The support point needs to be something that other traders will see. It must serve the psychological purpose of a price point that will bring buying pressure as the price approaches that price level again. A low followed by a significantly rally when viewed visually on the chart will do that. Traders will expect a potential rally off of support if the price level that defines that support is visually significant on the daily chart. The point must stand out visually. This is the reason for a level of vertical (price) and horizontal (time) separation.
1.4. The second condition of the rebound: a breakout or an approach very close to the support level. If the price breaks through the support, so we have a breakout instead of just a test of the support. All else being equal, a breakout is better than a bounce that does not go lower than the support level: Any traders who had placed stops just below the support level are now out of the market because those stops were hit. Arise in price after the stops have been hit is slightly stronger than a rise in price without those stops having been hit.
1.5. An ideal trigger for the trade: a price that breaks the previous day's high. This price should be significantly above the support level when measuring the distance between the support and resistance. When you have the breakout you know the high price, so you can place an order to buy just above this high. If the order is filled, you know you will have a trade that meets the criteria of the rebound swing method.
1.6. To determine a significant price move with your eye-balls, use your right brain's pattern matching. Look at the chart and determine whether a particular stock has clear support and resistance. If it doesn't, move on to another stock. If it does, check the price differential between the support and the resistance. A stock needs room to run if it does bounce. This is a judgment call that you need to learn to make.
1.7. The objective should be a potential profit of two to four times the entry risk. You should know the entry risk when you place the order because you will already know the price of entry and the lowest price of the breakout or test of the support. If the distance from the entry point to the resistance is not at least twice that amount, don't even place the order. For a volatile market, the minimum reward to risk ratio should be three.
1.8. As with many swing trades, the rebound swing method has a very short leash for the exit. Put on a protective stop just past the pivot low of the most recent moves. This stop gets it out if the trade doesn’t work out. Never Change the Protective Stop.
1.9. After the trade moves more than halfway to the resistance line or zone, you should have a significant profit. If that happens, you should exit when the price breaks down a little bit. One easy method is to put a stop at the previous day’s low so you will exit if the price drops below that—a trailing stop. This approach lets you continue to ride a long move if it continues in the same direction, but will get you out quickly in the event of a reversal.
2. Market Selection
2.1. This method works well in any of the six types of markets. I trade only LONG in a range-bound rising or sideway market. However, this system can be easily modified to trade SHORT in a falling or sideway market.
2.2. US Market—maintain a watch list of the sector SPDR ETFs and industry group ETFs.
a) For each sector or group, maintain a watch list of TOP 10 to 20 stocks.
b) Trade stocks with average daily volume more than 2 million shares.
c) The stock prices should be not less than $20 and not more than $75 with exceptions.
2.3. Canadian Markets—maintain a watch list of iShares or BMO ETFs which follow TSX/S&P Index.
a) Maintain a watch list of stocks which are in iShares S&P/TSX 60 Index.
b) Trade stocks with average daily volume more than 0.4 million shares.
3. Market Direction
3.1. I trade only LONG in a range-bound rising or sideway market. To determine the direction of market, open a SIX-MONTH daily chart with 20-50-200SMA.
3.2. Look at the chart and decide within a minute or so: up, down, or sideways.
3.3. If the chart looks difficult and senses trouble, don’t take a trade.
3.4. If the trend is down, don’t take a trade.
3.5. If the trend is up or sideway and feels good, take a long trade.
4. Setup
4.1. The setup for the trade is clearly established support and resistance that represents a significant price differential between these two levels.
4.2. Look at the chart and determine whether a particular stock/EFT has clear support and resistance. If it doesn't, move on to another stock.
4.3. If it does, check the price differential between the support and the resistance. A stock/ETF needs room to run if it does bounce.
4.4. The next step is to confirm the confluence of the stock/ETF with the overall market (S&P 500 Index) and sectors (Index or ETFs).
4.5. The trigger is a significant rebound inside the range between support and resistance. Use visual impression as a guide—a significant rebound should be about 10% to 15% of the range.
4.6. The objective is to make a potential profit of 2R to 5R. If the distance from the entry point to the resistance (1R) is not at least twice that amount, don't place the order.
4.7. For a volatile stock, the minimum reward to risk ratio should be three—3R.
5. Entry
5.1. Is the stock near support level?
5.2. Is the reward to risk ratio greater than 2R?
5.3. Use Bottom Reversal candle stick patterns as entry signal. If a pattern requires price confirmation then wait for it.
5.4. Use Buy-Stop order to enter. Don’t try to catch the lowest low.
6. Protective Stop
6.1. The protective stop is just below the support level—the pivot low of recent movement.
6.2. Always set up a protective stop as sell-limit order and put in at the time of entry.
6.3. This stop is nonnegotiable exits. If a stock or ETF trades at the stop price, the position has to be exited each time, every time, without fail.
7. Time Stop
7.1. If the stock moves sideway more than 3 days, then consider exit the trade.
8. Re-Entry
8.1. If the protective stop is triggered then reassess the stock.
8.2. Re-entry is treated as a new trade and follows setup rules.
9. Exit
9.1. If the price moves more than halfway of the range, then a trailing stop shall be applied. This means at least 1R profit can be achieved. The trailing stop is under the previous day’s low.
9.2. If the price approaches the target, then sell at least half of position and set a trailing stop for the left.
10. Position Sizing
10.1. Use Market’s Money Strategy to control my position size.
10.2. Use scale-in technique for entry and scale-out technique for exit.
10.3. Assume SQN 2—risk percentage 0.7% (1% ruin level—1.4%).