When it comes to investing, would you rather be a wallflower, sitting at a table in the same club all night, or a party animal, bouncing from club to club and always out on the dance floor? In other words, do you want to be a long-term investor or a swing trader?
There are many different types of investing, including swing trading, scalp trading, day trading, and long-term investing, but your preferred method will depend on how you like to play the game. Do you want to stick with the same trade for years or even decades at a time? Or would you prefer to bounce from trade to trade, profiting from smaller swings in the market? How much time are you willing to devote to investing? Are you patient or restless? Do you like the “slow and steady” method or would you rather have quick and volatile relationships with your stocks? Today we’re focusing on just two methods, comparing swing trading vs. long-term investing, so that you can decide how you want to trade.
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Years ago (over a decade now), Rick Saddler, the creator of this very website, developed a swing trading strategy based around what he decided to call the “T-Line.” The T-Line is essentially the 8-day exponential moving average, or the 8 EMA. Although Saddler wasn’t the first trader to make good use of the 8 EMA, he did come up with a clever trading strategy to employ the 8 EMA for support (if there is buying pressure) and resistance (if there is selling pressure). Learning how to trade the T-Line is simpler than you might think, especially if you use the helpful tips we’ve compiled below.
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Last week we discussed the very basics of candlestick charts: what candlesticks look like, what their shape conveys, and how you can begin to understand them. Today we’d like to take that lesson one step further. Now that you can interpret a candlestick’s meaning, let’s talk about the various formations and patterns you’ll encounter in candlestick charts and what they suggest. Understanding candlestick charts (both the logistics and complexities) will take some time, so for now, we’re sticking with the basics. Let’s get started!
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