Stockbee: To be good at swing trader understand volatility and range expansion cycles

6/06/2014

To be good at swing trader understand volatility and range expansion cycles

To be good at swing trading on any time frame understand volatility and range cycles...

Momentum burst leads to volatility expansion. A momentum burst lasts 3 to 5 days before momentum reverses or slows down. During this period there is range expansion.

A consolidation or volatility contraction follows some of these momentum breakouts. During that period the stock might setup for next breakout. It will show series of range contraction days. If the stock again breaks out there is volatility expansion and range expansion. This cycle can continue with another consolidation and so on.

Swing traders try and identify such cycles and want to participate in the high volatility phase.In a trend move this can happen several time. Same thing can happen in a range bound stock.

You want to find the consolidation or range contraction or volatility contraction phase and enter at an interface between contraction and expansion. Not too early or too late.

Range Expansion, range contraction, Range Expansion, range contraction. that is the cycle. If you understand that you will be able to find anticipation setups.

The more you do it better you will become at it.

Anticipation setups for today I am watching:

Link to Charts