TRADING SWINGS

TRADING SWINGS

The Judas Swing

  • Judas Swing - An engineered price swing meant to lead reactionary traders into the wrong direction. Typically a false rally that appears initially to emotional traders as the next big run in price. In the market, traders that follow this swing find themselves trapped on the wrong side and pay the price.
  • When Judas Swing Forms - Essentially is a stop raid that many times trades into:
    • Key S&R Level
    • Previous High or Low
    • Counter-Swing to Form OTE
    • Raid the Previous Week High
    • Raid the Previous Week Low
    • Raid the Previous Session Stops
    • Raiding Session Stops
      • If trading London Open, look for Asian stops to be raided.
      • If trading NY Session, look for London Open stops to be raided.
  • Market Swing Points
    • 10:00 GMT @ 5-min Chart
      • Standard Judas Swing
        1. Use opening price on midnight candle, draw open line into the day.
        2. If Bearish, look for shorts at points above the line.
    • Judas Swing Once Every 24-Hour
      • The Swing should happen at least once in a 24-hour session.
      • Swing should be in the opposite direction of what the trend for the day has been.
    • Confluence of S&R - Use 15 pip buffer when looking for confluence of S&R
    • Trade After Swing High / Low
      • If market is trading lower, then look for a sell after a recent swing high.
      • If market is trading higher, then look for a buy after a recent swing low.
    • Two Trends in a Day
      • Morning Trend that is the market open to around 11am and consolidates to around the NY lunch period.
      • Around 1pm - 2pm, things heat up to fulfill the PM trend for the remaining portion of the daily range.