In Swing Trades, Time Frames Are Key

It's tough to make money if you don't know where the price swing began, how far it might carry and when it's finally over. Every aspect of your trade, including holding period and reward/risk, depends on the size of the swing. In addition, swings occur in all time frames, so it's equally important that you know which one you're actually trading.

Measuring the current swing starts with a good set of eyeballs, because swings tend toward proportionality. For example, an 18-to-20-day swing in one direction will often be followed by an 18-to-20-day swing in the opposite direction. To complicate matters, these proportions can be subdivided into fractions, with a rally swinging five days against a 10-day selloff, an eight-day selloff swinging against a 16-day rally, and so forth.

Bank of America (BAC) -- Daily eSignal

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