Introduction: Learn the Art of Swing Trading #9

Tip #9. Consecutive up days and consecutive down days

Stocks will reverse direction after consecutive up days or down days. So, it pays to keep this in mind when you are looking to buy or short a stock. Here is an example:

You should always look to short a stock after consecutive up days. And, you should look to buy a stock after consecutive down days. This is counter intuitive for new traders because they tend to associate a stock going down as "bad" (meaning sell) and a stock going up as "good" (meaning buy). In fact, it is just the opposite!