AND SWING-LOW TRADING TECHNIQUE
important commodity futures trading technique should help you greatly to trade
the futures markets profitably (of course, assuming it's used correctly).
This "market structure"
trend direction method is primarily a pattern recognition
method which is incredibly simple but at the same time it's
powerful, with great potential for trading profits!
It's the best way we have found to identify commodity market direction
and define a bullish or bearishly structured market. It
is based on the observation if you look at a bar chart
of any market, you will see a bear-market consists of mostly
a series of lower highs and a bull-market consists of mostly
a series of higher lows.
These higher-lows and lower-highs are referred to by Commodity
Traders Club as Swing-Lows and Swing-Highs, also known as
Pivots, or Pivot-Points.
A swing-low is defined as a low day (or bar) with higher
prices both in front and behind the low day (or bar), thus
forming a swing-low. This swing-low must also be above the
previous swing-low, thus forming a higher swing-low.
A swing-high is defined as a high day (or bar) with lower
prices both in front and behind the high day (or bar) forming
a swing-high. This swing-high must also be under the prior
swing-high thus forming a lower swing-high.
The concept of buying higher swing-lows or selling lower
swing highs is used by the most successful large futures traders.
This concept has been used by them for a very long time. These
traders don't talk much about this simple but potentially
profitable technique. Very few traders are familiar with this
powerful, yet relatively simple trading technique.
Merely buying higher lows and selling lower highs by themselves
can dramatically improve your trading results. You also need
to know where to place a target so you can get out of the
market once your profit objective is reached. You need to
know where to place a protective stop-loss if the trade is
wrong. For this we strongly recommend you use "Drawdown
Minimizer Logic®" which is explained in detail in
CTCN Special Report #2. Drawdown Minimizer Logic is a mathematical
method of sharply reducing drawdown based on past "adverse
A sample chart showing how to use swing-highs and swing-lows
(a.k.a. market structure) to trade successfully is available
The concept of only selling short providing a LOWER "Swing-High"
has occurred, and only buying upon the occurrence of a HIGHER
"Swing-Low" can be quite profitable.
This method appears highly profitable when used on old charts,
using some subjectivity on the past data. Old charts and hindsight
combine to make it look highly profitable. However, doing
it in real-time trading is more difficult.
providing there are 2 or 3 lower days (or bars), instead of
just one on each side of a high point qualifies as a more
significant Swing-High, and can be very profitable. Of course,
the reverse is true for a Swing-Low buy. The more days (or
bars) on each side of the swing day (or bar) is better to
more clearly define the Swing-High and Swing-Low.
The problem is the fact the more days (or bars) on each side
there are, it's likely more of the move is over by the time
we can get into the market. Conversely, the fewer days (or
bars) of each side of the pivot bar means the move has likely
not progressed far. However, it's more likely to be a false
or minor Swing-High/Low and consequently less profitable,
or an overall loser.
It's fairly easy to identify and draw buy and sell arrows/dots
at Swing-High and Swing-Low points on charts. However, doing
it in real-time trading is not as easy as it appears on a
back-data bar chart.
Nevertheless, the Swing-High and Swing-Low concepts (a.k.a.
Market Structure) are in our opinion the best trend identification
tool for trading the commodity futures markets successfully.
It will "work" in any market, the actual market
makes little difference. Of course, as always, trending markets
make it work a lot better.
The concept of buying/selling Swing-Lows/Swing-Highs is simple
and can be amazingly successful but needs to be combined with
a good stop-loss method to give you protection on false signals.
It's recommended you use CTCN's copyright "Drawdown Minimizer
Logic®" to scientifically set stop-loss levels. "D.M.L."
is used by CTCN's Swing Catcher® technical analysis software
Each day brings increased opportunity to increase business
in current as well as new futures markets. To capture that market
share you have to get the right kind of attention. You also
must deliver a relevant sales experience to your potential
CTCR listens and responds to traders needs with trading
tools and free commodity trading information. CTCR is expert
at translating the special needs of futures traders into trading
solutions that work and relatively easy to use and apply to the
financial markets. More free trading knowledge is at our well
known Commodity Traders Club News
commodity futures trading information and trader articles CTCN website.