Swing trading strategies stocks using the McClellan Summation Index is a great option for those who have a day job and can’t do day trading. Using this swing trading tutorial can potentially help you find good swing trade stock picks.
The swing trading techniques in this video can be used to help you potentially make some extra money on the side. If you learn to trade well enough, you may even build up your skills well enough so you can swing trading stocks for a living with the McClellan oscillator formula as part of your trading method.
The summation index math can be used for NYSE or Nasdaq charts and is available for many charting platforms including the McClellan Summation Index for ThinkOrSwim.
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One of my favorite swing trading strategies stocks is to use the McClellan Summation Index. It is derived from the NYSE McClellan oscillator chart which is a breath oscillator indicator. Basically it is measuring the advanced issues, less declining issues, and then the summation index math is following that and creating different types of patterns on it.
SWING TRADING TUTORIAL
Here’s one of the signals that I will take: a divergence, like this. And I like this one but what you really need to have here is more than just this. Like any other, this is not really an indicator as such, it’s an index, or statistics. You see that kind of divergence there and those are pretty good. So the key here is we get equal highs and then we get a lower high. So equal highs on the price action but then lower highs on the summation index. So basically whats that telling us is of course that we are seeing underneath the price action that declining issues are starting to increase over advancing issues.
MCCLELLAN SUMMATION INDEX
Number 1, look at the date. It’s May. You probably heard the phrase that ‘You buy in the fall and then in May go away because we are heading into summer months, and so that’s one signal that you want to look for here and then indeed it does go down and down and down through the summer. So that gave us a very nice signal time wise seasonally if you will, based on the seasonal cycles that we should get out and then in October it starts going back up again.
So did we have a signal to go long back in October? Well yes we did again. If you look at that, we get another divergence pattern here. There are equal lows, little bit a higher low there I guess if you draw out from the lower candlestick pattern. But then we get a shift, higher low on the McClellan Summation Index.
These aren’t always long term signals by the way. Sometimes they are just a short-term signals, but that’s why we got to use them with, with everything else. All the other things you have in your trading toolbox. It’s one more piece of evidence. Here we get double bottom, and well equal bottoms at least and then a higher low on the index. And again this is during bullish time of year, February.
SWING TRADING STRATEGIES STOCKS
Now here is a real interesting one and this is the trade I actually took. So this is last fall. We get a little bit of a higher high here. We put in a wave 5. So we got a wave 5 trend up which is an average trend but well you can look and see there for yourself the McClellan Summation Index is heading on down. So it is diverging. We are getting more net declining issues and the market kind of pinballs there between the moving averages for a while and then it goes down down down to the orange line. The orange, moving average there, that’s the 200 simple moving average.
So great place to take out or to get up, and then look what happens. We get into November and November 7th and whats then. Well that was election time; presidential election time here in the US. So great place to exit the trade. We had to rally out of the election and also that coincides directly with the Halloween cycle which starts the bullish time of year based on the traders’ almanac.
SWING TRADING INDICATORS
So again now just recently we had another signal, very dramatic signal actually and we got a wave 7 which is an extended uptrend and then we came up and retested that high and of course again you look down at the summation, and then actually you can see it made a dramatically lower high, and so yes we had a shift there. Its’ a very short-lived opportunity for swing trading strategies stocks
I showed you that because it’s recent, a very recent signal and also because I’d like to show you the things that can happen that are not a deal. I want you have that in front of your mind. So you don’t get over enamored with anything. There is no one thing that makes you money. Everything is a piece of evidence that you put together with other pieces of evidence to establish a probability scenario.
Having said that, this is still one of the best swing trading strategies that work which I’ve come across.
BTW, if you’re interested in the indicator that I use personally for very precise entries and exits. I’m happy to share that with you. Just send me an email at Barry@TopDogTrading.com, and I’ll show you how to get access to that indicator.
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