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SwingLab works alongside with SwingTracker, my real-time charting software. One of the best features of SwingTracker is the “Scan” feature, which lets you build your own stock screens to find the specific stocks you’d like to swing trade.
I will show you some of the formulas I use, and how I use them. There is also a step-by-step description of how to set the screens up.
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Why does swing trading work?
Because you are trading in the direction of the trend. You wait for a pullback before entering the trade, and you enter only if the stock shows a sign that it’s price will continue in the direction of the trend.
On www.mrswing.com, you will find regular update in the SwingLab section of the site. Let’s get started.
Starting with SwingLab
Swing traders seek pivot points in stocks - gaps, breakouts and reversals - with a 1 to 5-day time horizon. Here are some of the scans that I use… if you find one that you like, send it to swinglab@mrswing.com with your name, and we may add it to our growing library on our website.
Starting to swing…
All the scans presented here are End-of-Day. These scans are best executed & analyzed before the opening of the market! So you have all the time in the world to be prepared to swing these stocks like a PRO.
Let’s start with our first scan: this is the first scan we execute every single trading day.

Swings the stock must be experiencing a minor decline/pullback within the context of a uptrend or the stock must be experiencing a minor rally as part of a downtrend

Only trade what you like !

.. Real-Time Quotes and Charts

SwingTracker allows you to watch the market unfold in real time with customized Real-Time Quotes and Charts updated by the minute.

.. Real-Time Watchlist

Track dozens of stocks and indices simultaneously with a dynamic SwingTracker Real-Time Watch List. This set of personalized “favorites” is easy to organize. Simply choose a symbol and you’ll receive up-to-the-minute information on that stock as it happens. Choose from more than 50 lists, including Most Actives, Top Gainers/Losers, Indices, and Industry Groupings.

.. Stock Scan

Find new investing opportunities with SwingTracker’s sophisticated Stock Scan. This powerful and easy-to-use software allows you to search using more than 100 criteria, including price, volume, and fundamental information. Stock Scan also utilizes our proprietary candlestick recognition engine to determine specific patterns. And every search can be saved or modified with just one click.

.. Portfolio Tracker

Can you make money swing trading?
YES, we enjoy a high percentage of winning trades because the charts pattern used have been back-tested. The risk parameters are highly defined; The swing trader is a disciplined user of trading STOPS. This is only TRUE when you apply a solid trading plan, like our MASTER PLAN.

Manage and protect your existing profits with SwingTracker’s Portfolio Tracker. The tool allows you to monitor up to six different portfolios in real time. You can also set high and low alerts, purchase price, and the amount of your holdings to continually monitor your bottom line.

.. Technical Indicators

Accurate technical analysis is essential to today’s trading. SwingTracker Technical Indicators allow you to view up to four indicators simultaneously, including our proprietary indicator, IQC Zone, Relative Strength Ranking, and Money Flow.
Do you monitor all list stocks every day? How do you pick one to play?
NO ! I execute our swings scans every single day and select approx. 25 stocks i like!!
THEN? I divide my portfolio into 15 equal pieces & the first 15 (of the 25 stop orders) that pass the swing test are traded, i.e. I only risk 6.66% on each trade.
Technical analysis is widely considered essential in limiting risk and maximizing profit as part of any trading and investment strategy. SwingTracker has dozens of technical indicators available for real-time and long-term analysis.
Available Technical Indicators
With price volatility at an all-time high, it is becoming increasingly important for the investor to recognize patterns in the movements of the stocks they own or are interested in purchasing. The interpretation of market activity using technical analysis provides clues to the investor as to the future behavior of the price.

Generally speaking, the technical investor will use a combination of price, volume and time-sensitive technical indicators to maximize their profits. Here is a complete list of technical indicators utilized by SwingTracker, IQC Corporation’s award-winning technical analysis charting software.
Overlays
.. Bollinger Bands
.. Linear Regression
.. Moving Average
.. On Balance Volume (OBV)
.. Parabolic SAR
.. IQC Zone
.. Up/Down/In/Out
Indicators
.. Average True Range
.. Breadth Advance/Decline
.. Commodity Channel Index (CCI)
.. Directional Moving Index (DMI)
.. Equivolume
.. Force Index
.. Moving Average Convergence/Divergence (MACD)
.. McClellan Oscillator
.. Momentum
.. Money Flow
.. Relative Strength Ranking (RSR)
.. Relative Strength Index (RSI)
.. Relative Strength Index Classic (RSI Classic)
.. Stochastics
.. Ultimate Oscillator
.. Volatility
.. Volume and Volume Average
.. William %R
Other Interesting Features
.. Provides real-time access to financial information anywhere in the world.
.. Works side-by-side with your Internet browser.
.. Offers a variety of tools that give you the ability to draw trend lines, retracements, and much more.
.. Displays information on related stocks quickly and easily.
.. Takes advantage of offline capabilities for daily, weekly, and monthly charts.
.. Saves time, money, and space with server-maintained databases.

SwingTracker 4.0 is quote, scan and charts software designed specifically for Swing Traders. In addition to our acclaimed features like real-time intraday technical charts, sophisticated stock tool and dozens of technical indicators, we have the following special features for swing traders:
.. Equivolume and ForceIndex indicators as described in my education section
.. Build your own stock scans, or use the ones I describe in “SwingLab” to find your own
.. Real-Time Swing Alerts

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Exactly From http://www.swingtracker.com:
What Seperates SwingTracker From The Rest?

Our Promise and GUARANTEE To You:

We are so confident that you’ll find SwingTracker to be a pleasure to use AND that you’ll stay when you use it, that we’ve decided to let you try it out absolutely FREE!

This way you have no risk. It’s on us. Sign up, download the software, follow the step by step instruction videos in the members section… and you’ll be off and running in no time. If it’s not right for you, uninstall the software and send us an email to cancel your account. That’s it… no hard feelings.

The Uniqueness of SwingTracker:

Only with SwingTracker will you have an incredibly user friendly real-time charting and scanning application with a whole team dedicated to helping you create custom indicators, overlays and scans. SwingTrackers charts and scanning capabilites are second to none. Period.

You also become a part of the SwingTracker community, a special group of people that likes to think of themselves as friends who always try to help each other.

The Features and the Price:

Only with SwingTracker will you receive so much value for your money, you won’t find anything like it anywhere. And it’s only the beginning, SwingTracker is constantly improving and always adding new and custom features.

But don’t listen to us, try it for FREE for 30 days… it’s the best way to see it’s power!

The Credibility:

Based on Larry Swing, his trading team, a large amount of SwingTracker users and a massive amount of traders at MrSwing.com, you know you are getting a product made by traders for traders. One that has been put to the test.

Up/Down/In/Out is a chart overlay available on SwingTracker (software I recently developed) that color-codes individual bars or candlesticks based on price movement. It relates the current high and low price with the previous high and low price.
Up (Green) indicates the current high is higher than the previous high and the current low is higher than the previous low.
Down (Red) indicates the current high is lower than the previous high and the current low is lower than the previous low.
In (Yellow) indicates the current high is lower than the previous high, and the current low is higher than previous low.
Out (Blue) indicates that the current high is higher than the previous high, and the current low is lower than the previous low.

The Directional Movement Index (DMI) is a trend-following indicator developed by J. Welles Wilder, Jr., designed to determine whether a security is in a trending or non-trending market. Since the market is in a strong trend only about 30% of the time and in sideways about 70% of the time, this indicator is used to capture the period when the market shows significant trending or directional behavior.

The calculation of the DMI is fairly complex and consists of three lines:

< DMI >
+DI: current positive directional index, the range of highs divided by the price range over the last day and previous close, smoothed over a given number of periods.
-DI: current negative directional index, the range of lows divided by the price range over the last day and previous close, smoothed over a given number of periods.
ADX: modified moving average of the difference of +DI and -DI divided by the sum of +DI and -DI, multiplied by 100.
UpTrend:
.. ADX > 30 the higher the better
.. +DI > -DI
DownTrend:
.. ADX > 30 the higher the better
.. -DI > +DI
8.10 Up

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Directional Movement Index (DMI)

What does it Mean? An indicator developed by J. Welles Wilder for identifying when a definable trend is present in an instrument. That is, the DMI tells whether an instrument is trending or not.

Investopedia Says... The scale for the DMI is from 0 to 100. The average directional movement index (ADX) is a moving average of the DMI.

Discerning Movement with the Average Directional Index - ADX
The Average Directional Index (ADX) measures the strength of a prevailing trend as well as whether movement exists in the market. The ADX is measured on a scale of 0 to 100. A low ADX value (generally less than 20) can indicate a non-trending market with low volumes whereas a cross above 20 may indicate the start of a trend (either up or down). If the ADX is over 40 and begins to fall, it can indicate the slowdown of a current trend. This indicator can also be used to identify non-trending markets, or a deterioration of an ongoing trend. Although market direction is important in its calculation, the ADX is not a directional indicator.

Many technicians who use ADX on a regular basis use a 14-unit ADX (meaning 14 trading days) and end-of-day data (the closing prices of each security being studied). It is important to use the same parameters in each study to reveal consistent findings. Make sure that you never have more than two or three indicators in your studies, allowing for quick decisions to be made when an issue is making a strong move in either direction.

An ADX above 30 on the scale indicates there is a strong trend in that particular time frame. Recall the principle that momentum precedes price. (See Getting Confirmation with the Momentum Strategy.) Therefore, when using ADX in your studies, note that when ADX forms a top and begins to turn down, you should look for a retracement that causes the price to move toward its 20-day exponential moving average (EMA). In an uptrending market, the technician will buy when the price falls to or near the 20-unit EMA, and in a downtrending market, one should look to sell when the price rises to or near its 20 unit EMA.

Investors should know that ADX does not function well as a trigger. Prices will always move faster than the ADX, as there is too much of a smoothing factor, which causes it to lag the price movement.

Interestingly, when ADX drops below 18, it often leads to a sideways or horizontal trading pattern, and the moving averages start to cluster around the price of the security. This signifies basing action within a trading range from which it is possible to draw support and resistance lines. Classic technical analysis tells us the longer the price action moves horizontal, the more likely the chart pattern will be a reversal pattern rather than a continuation pattern. When ADX moves down that low, you are in a breakout mode, and once the price breaks out, you could be setting a new trend. So draw your trendline and look for some type of breakout method.

Each indicator has its weaknesses and the ADX is no exception. Charles LeBeau, a long time trader and writer had this to say in an interview a number of years ago: “Imagine that we have a nice long base. We jump on board when ADX starts rising from a low level. We successfully carry this trade all the way up to a high ADX level, somewhere above 30, and then the market turns down. The ADX will start to decline showing an absence of trending direction, but the price does not have an absence of direction, it is moving down!”
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by Investopedia Staff > Read More >

Force Index is an oscillator developed by Dr. Alexander Elder in his excellent book: “Trading for a Living”. (See elder.com)

Force Index combines the three most essential pieces of market information:
.. the direction of price change
.. its extent
.. its trading volume.
It provides a new, practical way of using volume to make trading decisions.

Force Index
Force Index = Volume(today) * (Close(today) - Close(yesterday))

Although Force Index can be used raw, I prefer to smooth them with moving average:

Larry’s Index FI-3days MA & FI-13days MA

A 3-day MA of Force Index is a very sensitive indicator which shows the short-term battle between the bulls and the bears. And the 13-day MA of Force Index identifies the longer-term battle between bulls and bears.

Force Index
BUY opportunity :
.. FI-13MA => 0
.. FI-3MA <= 0
.. UPTREND
SELL opportunity:
.. FI-13MA =<0
.. FI-3MA >= 0
.. DOWNTREND

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The Calculation
The force index is calculated by subtracting yesterday’s close from today’s close and multiplying the result by today’s volume. If closing prices are higher today than yesterday, the force is positive. If closing prices are lower than yesterday’s, the force is negative. And the strength of the force is determined either by a larger change in price or a larger volume - either situation can independently influence the value and the change in force index.

The raw value of force index is plotted as a histogram, with the center line set to zero. A higher market will result in a positive force index, plotted above the center line; a lower market points to a negative force index, below the center line. An unchanged market will return a force index directly on the zero line. Because the raw line that is plotted over the day-to-day on the histogram forms a jaggedness, the moving average smooths the line - at minimum, you’ll want to use a two-day exponential moving average (EMA) for the appropriate level of smoothing.

Interpreting the Force Index
In general, traders will want to buy when the two-day EMA of force index is negative and sell when it is positive. These traders, however, should always keep in mind the overarching principle of trading in the direction of the 13-day EMA of prices. The 13-day EMA of force index is a longer-term indicator, and, when it crosses above the centerline, the bulls are exerting the greatest force. When it is negative, the bears have control of the market. Of particular importance are divergences between a 13-day EMA of force index and prices, which correspond with precise points indicating crucial turning points of the market.

As indicated by closing prices, the difference between yesterday and today’s close gives the degree of the day-to-day victory of either the bulls or the bears. Similarly, volume is added into the calculation to give a greater sense of the degree of bulls or bears’ victories; volume also indicates the level of momentum in the market as propelled by the power of either bulls or bears. Force index is one of the best indicators for combining both price and volume into a single readable figure. When force index hits a new high, a given uptrend is likely to continue. When force index hits a new low, the bears have greater strength and the downtrend will usually sustain itself.

A flattening force index is also an important situational circumstance for traders. A flattening force index means that the observed change in prices is not supported by either rising or declining volume and that the trend is about to reverse. On the opposite side of the matter, a flattening force index could indicate a trend reversal if a high volume corresponds with only a small move in prices. Read More >

Force Index
From Wikipedia, the free encyclopedia

The Force Index (FI) is an indicator used in technical analysis to illustrate how strong the actual buying or selling pressure is. High positive values mean there is a strong rising trend, and low values signify a strong downward trend.

The FI is calculated by multiplying the difference between the last and previous closing prices by the volume of the commodity, yielding a momentum scaled by the volume. The strength of the force is determined by a larger price change or by a larger volume.

A Moving Average (MA) is an indicator that shows the average value of a security’s price over a period of time. When calculating a moving average, a mathematical analysis of the security’s average value over a predetermined time period is made. As the security’s price changes, its average price moves up or down.
Simple MA = (P1 + P2 + … + Pn) / n
where P is the price being averaged and n is the number of days in the MA
There are five popular types of moving averages: simple (also referred to as arithmetic), exponential, triangular, variable, and weighted. Moving averages can be calculated on any data series including a security’s open, high, low, close, volume, or another indicator. I use only the 10-20 & 50 day simple MA on closing prices.

TRENDS UpTrend:

.. Higher Highs & Higher Lows
.. Rising MA10 & MA20
.. Higher volume on the upward legs
.. closing prices ABOVE the MA20 & MA50
.. an Uptrend stock will find support at either the 20 or 50 day MA
DownTrend:
.. Lower Highs & Lower Lows
.. Falling MA10 & MA20
.. Higher volume on the downward legs
.. closing prices BELOW the MA20 & MA50
.. a downtrend stock will find resistance at either the 20 or 50 day MA

Moving average
From Wikipedia,
In statistics, a moving average or rolling average is one of a family of similar techniques used to analyze time series data. It is applied in finance and especially in technical analysis. It can also be used as a generic smoothing operation, in which case the raw data need not be a time series.

A moving average series can be calculated for any time series. In finance it is most often applied to stock prices, returns or trading volumes. Moving averages are used to smooth out short-term fluctuations, thus highlighting longer-term trends or cycles. The threshold between short-term and long-term depends on the application, and the parameters of the moving average will be set accordingly.

Mathematically, each of these moving averages is an example of a convolution. These averages are also similar to the low-pass filters used in signal processing.

Moving Average (MA)
What does it Mean? An indicator frequently used in technical analysis showing the average value of a security’s price over a set period. Moving averages are generally used to measure momentum and define areas of possible support and resistance.
Investopedia Says… Moving averages are used to emphasize the direction of a trend and to smooth out price and volume fluctuations, or “noise”, that can confuse interpretation. Typically, upward momentum is confirmed when a short-term average (e.g.15-day) crosses above a longer-term average (e.g. 50-day). Downward momentum is confirmed when a short-term average crosses below a long-term average. Resource > investopedia.com

Equivolume displays prices in a manner that emphasizes the relationship between price and volume. Equivolume was developed by Richard W. Arms, Jr., and is explained in greater detail in his book “Volume Cycles in the Stock Market”
Instead of displaying volume as an “afterthought” on the lower margin of a chart, Equivolume combines price and volume in a two-dimensional box. The top line of the box is the high for the period and the bottom line is the low for the period. The width of the box is the unique feature of Equivolume - it represents the volume for the period.

Equivolume shape
The shape of each Equivolume box provides a picture of the supply and demand for the security during a specific trading period. Short and wide boxes (heavy volume accompanied with small changes in price) tend to occur at turning points, while tall and narrow boxes (light volume accompanied with large changes in price) are more likely to occur in established trends.
Especially important are boxes that penetrate support or resistance levels, since volume confirms penetrations
A “power box” is one in which both height and width increase substantially. Power boxes provide excellent confirmation of a breakout. A narrow box, due to light volume, casts doubt on the validity of a breakout in question.
We always look at volume in relation with price movement:
..
Volume
Trend Reversal
.. Above-Average Volume with LITTLE price movement
.. Above-Average Volume after a huge advance or decline
Trend Continuation
.. Above-Average Volume with STRONG price movement
.. Above-Average Volume with breakout
.. Below-Average Volume with NO price movement
Figure 6: Volume

Volume is simply the number of shares traded during a given timeframe (e.g., hour, day, week, month, etc.). The analysis of volume is a basic yet very important component of technical analysis. Volume provides clues as to the intensity of a given price move.
High volume levels are characteristic of market tops when there is a strong consensus that prices will move higher. High volume levels are also very common at the beginning of new trends (i.e., when prices break out of a trading range). Also, just before market bottoms, volume will often increase due to panic-driven selling.
Volume can help determine the strength of an existing trend. A strong up-trend should have higher volume on the upward legs of the trend, and lower volume on the downward (corrective) legs. Similarly, strong downtrends usually have higher volume on the downward legs of the trend and lower volume on the upward (corrective) legs.
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Stock Market Volume

Before investing in any stock, one major element that you have to look at is the company’s daily volume.

The daily volume of a company (liquidity) is the amount of shares that are traded on any day.

Most of the stocks that have minimal volume, 15,000 shares per day or less, have a problem, and there are numerous reasons you should try to avoid such low volume stocks.

One reason is that stocks with low volume often have very large price swings.

These fluctuations are due to the laws of supply and demand. If there is only a few available sellers of the stock you want to buy, you are forced to pay what they want for the stock.

On the other hand, when you decide to sell the stock, you may be forced to keep the shares because there are no buyers of the stock, or to sell them in a really low price.

Since the low volume stock is “handled” by only a few persons, the stock is usually get hammered down harder than most stocks, and it is also more easily “treated” going up.

Stockholders of these type of companies are often very easily frustrated, and unless they are prepared to hold them for long periods, they very easily panic and sell their stock to the very first offer.

Nevertheless, you shouldn’t judge companies solely on their average volume.

If the company’s fundamentals are strong, you should not rule out the possibility of purchasing any stock of the company, but you must do a thorough research before making any final decisions. Resource > Stock Market Volume

In the 1600s, the Japanese developed a method of technical analysis to analyze the price of rice contracts. This technique is called candlestick charting. Steven Nison is credited with popularizing candlestick charting and is now recognized as the leading expert on their interpretation.
Candlestick charts display the open, high, low, and closing prices in a format similar to a modern-day bar-chart, but in a manner that extenuates the relationship between the opening and closing prices. Candlestick charts are simply a new way of looking at price; they don’t involve any calculations.

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The Most Powerful Aspect Of Candlestick Analysis!
When interpreted properly, candlestick trading signals provide the investor with knowledge that cuts to the chase. What are investors doing in this stock right now? How does that affect the current trend? Does the Candlestick formation created indicate a change of direction? That result is visually depicted by the Candlestick formation. Investor psychology is incorporated into the Candlestick signals.

Witnessing a candlestick formation that has produced profits over hundreds of years provides a high probability trade situation.

Whether day-trading, swing trading or long-term investing, the appearance of a candlestick trading signal demonstrates a profit potential occurring at that time period. The best fundamental research in the world does not make you any money unless the price is moving in the right direction.

You can pinpoint when a stock price is moving. Why a stock price is moving is not important. You are only interested in profiting from price movements. The signals make finding the profitable trades easy to identify.

You will be amazed at how you can consistently participate in the active sectors of the market. Knowing the direction of the markets, correlated with the direction of an individual stock, creates a huge potential for extracting profits from the market. You can easily learn how to take advantage of this knowledge. Your profit potential multiplies when the big-profit moves are easily located.
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In order to create a candlestick chart, you must have a data set that contains open, high, low and close values for each time period you want to display. The hollow or filled portion of the candlestick is called “the body” (also referred to as “the real body”). The long thin lines above and below the body represent the high/low range and are called “shadows” (also referred to as “wicks” and “tails”). The high is marked by the top of the upper shadow and the low by the bottom of the lower shadow. If the stock closes higher than its opening price, a hollow candlestick is drawn with the bottom of the body representing the opening price and the top of the body representing the closing price. If the stock closes lower than its opening price, a filled candlestick is drawn with the top of the body representing the opening price and the bottom of the body representing the closing price.

See Candlestick Formation examples from StockCharts.com

Compared to traditional bar charts, many traders consider candlestick charts more visually appealing and easier to interpret. Each candlestick provides an easy-to-decipher picture of price action. Immediately a trader can see compare the relationship between the open and close as well as the high and low. The relationship between the open and close is considered vital information and forms the essence of candlesticks. Hollow candlesticks, where the close is greater than the open, indicate buying pressure. Filled candlesticks, where the close is less than the open, indicate selling pressure.