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Item Number: 1796
Date Published: 2000
Publisher: McGraw Hill Publishing Co.
Format: Hardcover
Shipping Availability: Special Order ... 1-2 week delivery

The Master Swing Trader

 

Price: $ 55.00

This item is special order. Please allow 1-2 weeks for delivery

Author(s):

Alan Farley

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Alan S. Farley (Denver, CO) is publisher and editor of HardRightEdge.com, an online trader's resource covering technical analysis, short-term trading tactics, an more. A professional trader with more than 14 years experience, Farley has been featured in Barron's, SmartMoney, Tech Week, and TheStreet.com.

Synopsis:

Swing trading is gaining popularity as a powerful method to increase returns--and potentially lower risks--by profiting from short-term price moves. The Master Swing Trader explains how traders can use technical analysis, charting, and market sentiment to make trades that hold through price fluctuations and noise with wider stops.

Description:

This complete, practical guide to making profitable short-term trades--based on the author's popular “Mastering the Trade” online course--uses dozens of charts and graphs to illustrate proven swing trading concepts and strategies. Experienced day, position, and online traders will benefit immediately from:

  • The 7 Bells – unique tools to uncover promising short-term prospects
  • Techniques to profit from low-risk short sales
  • The 4 repeating cycles for perfectly timed trades

From the jacket cover:

Powerful Strategies to Slip Between Day Traders and Long-Term Investors—and Grab Hidden Trading Profits!

Located in the gray area between the lightning-fast day trader and the endlessly patient buy-and-hold investor, the modern swing trader executes intermediate positions that offer highly lucrative results with less volatility. The Master Swing Trader contains a wealth of practical insights and information for using this powerful trading method to profit from short-term price moves often missed by other market participants.

After beginning with a detailed background on Pattern Cycle applications and the trend-range axis, The Master Swing Trader presents:

  • Dozens of specific trading strategies and setups that include precise reward, risk, and stop-loss considerations
  • Concrete tips, tactics, and workflows to make informed choices at each stage of short-term trade evolution
  • The 7 Bells – unique tools to uncover high-probability short-term trading prospects

Dozens of specific trading strategies and setups that include precise reward, risk, and stop-loss considerations - Concrete tips, tactics, and workflows to make informed choices at each stage of short-term trade evolution - The 7 Bells – unique tools to uncover high-probability short-term trading prospects With more than 200 charts and dozens of proprietary setups that illustrate both classic and highly original short-term tactics, The Master Swing Trader doesn’t leave your trading profits to chance. Coldly analytical and backed by real-time trading results, this proven course for short-term traders will help you improve your bottom line, lessen your risks—and increase your confidence in building solid profits in today’s volatile markets!

Biased news stories spun by insiders to manipulate options prices…Questionable stocks pushed by analysts so their trading departments can unload bloated inventories … Quick-trigger day traders chasing the latest chat room buzz …

Today’s top market players understand that our efficient markets are actually highly inefficient, driven by insiders with hidden agendas and an irrational pack mentality that has little to do with underlying value. Fortunately, this constant imbalance generates repeated, high-probability trade setups—and Alan Farley’s The Master Swing Trader reveals how you can find and profit from these difficult-to-spot opportunities before they disappear.

Farley’s innovative system is based on Pattern Cycles—shifting market stages that repeat in an orderly, predictable process through all price charts and time frames. These classic Pattern Cycles:

  • Describe the machine language within market opportunity
  • Reveal the origin of the trade setup
  • Explain how to capitalize on inefficiency through every bull and bear phase
  • Show exactly where to uncover consistent profit opportunities
  • Offer natural methods to shift tactics quickly as conditions change

The Master Swing Trader will help you apply Pattern Cycles to your advantage, over and over again. By encompassing virtually all market action, and revealing how price moves in a highly predictable manner, its powerful tools will give you the edge you need to take other people’s money before they take yours.

In today’s lightning-fast markets, open information makes profit opportunities decidedly more difficult to spot and capitalize upon—with the investing herd becoming far more skilled at spotting inefficiencies and closing them up quickly. The Master Swing Trader will teach you to recognize these trade setups one step ahead of the crowd, dive in for solid profits, and close out your position before the majority has even caught on.

Pattern Cycles are not easy or automatic; they require concentration, discipline, and skilled execution. But the payoff of these classic strategies is virtually unlimited. Turn to page 1 of The Master Swing Trader now, and open a new world of trading possibilities and profits—the world of the master swing trader!

Table of Contents

  • Foreword ................................................ xvii
  • Acknowledgments ......................................... xix
  • Introduction ............................................ xxi
  • PART ONE THE GATEWAY TO SHORT-TERM TRADING
    • Chapter 1
      • Trading the Pattern Cycle ............................... 3
      • The Path to Trading Power ............................... 3
      • The Hidden Market ....................................... 6
      • Pattern Cycles .......................................... 7
      • Trend-Range Axis ........................................ 9
      • Swing vs. Momentum ...................................... 12
      • Time .................................................... 14
      • Trend Relatively ........................................ 16
      • Volume 18 ............................................... 18
      • Cross-Market Analysis ................................... 20
      • Reward:Risk ............................................. 21
      • Mastering the Trade ..................................... 21
    • Chapter 2
      • Preparing for the Market Day ............................ 25
      • The Closing Bell ........................................ 25
      • Support-Resistance ...................................... 26
      • Types of S/R ........................................... 27
      • Cross-Verification ..................................... 35
      • 3D Charting ............................................. 35
      • The Charting Landscape ................................. 38
      • Building the Road Map .................................. 39
      • Moving Average Ribbons ................................. 40
      • Candlesticks ........................................... 43
      • Bollinger Bands ........................................ 45
      • Chart Polarity .......................................... 50
      • Bull-Bear .............................................. 51
      • Trend Range ............................................ 51
      • Expansion-Contraction .................................. 53
      • Leading-Lagging ........................................ 54
      • Convergence-Divergence ................................. 56
      • Reading Market Sentiment ................................ 58
      • Avoiding the Momentum Trap ............................. 59
      • The Big Picture ........................................ 60
      • Dow Theory Y2K ......................................... 62
      • Finding Winners ......................................... 63
      • Needle in the Haystack ................................. 63
      • Opportunity Costs ...................................... 64
      • Building Watch Lists ................................... 66
      • Writing Scans .......................................... 67
    • Chapter 3
      • Analyzing the Market .................................... 69
      • Pattern Cycles .......................................... 69
      • Bottoms ................................................ 70
      • Breakouts .............................................. 73
      • Rallies ................................................ 76
      • Highs .................................................. 79
      • Tops ................................................... 81
      • Reversals .............................................. 84
      • Declines ............................................... 86
      • Market Mechanics ........................................ 90
      • Pattern Characteristics ................................ 91
      • Understanding Price Breaks ............................. 92
      • Recognizing Trends ..................................... 95
      • Trend Mirrors .......................................... 97
      • Clear Air .............................................. 99
      • Signposts .............................................. 102
      • Volume and the Pattern Cycle ............................ 104
      • Accumulation-Distribution .............................. 105
      • Trends and Volume ...................................... 107
      • Congestion and Volume .................................. 109
      • Intraday Trading Volume ................................ 110
      • Silent Alarm ........................................... 111
      • Reading the Crowd ...................................... 112
      • Bear Markets ............................................ 112
    • Chapter 4
      • Building a Swing Trading Strategy ....................... 117
      • Systems and Methods ..................................... 117
      • Momentum Trading ....................................... 118
      • Countertrend Trading ................................... 120
      • Trading Tactics ........................................ 124
      • More on Cross-Verification ............................. 126
      • Trader vs. the Crowd ................................... 131
      • Short Sales ............................................ 132
      • Time Frame ............................................. 137
      • Loading the Gun ........................................ 139
      • Day Trading ............................................ 142
      • Risk Management ........................................ 143
      • Winning and Losing ..................................... 145
      • Stop Losses ............................................ 147
      • Capitalization ......................................... 149
      • Records and Results .................................... 150
      • Inner Trader ............................................ 151
      • Avoiding Self-Destruction .............................. 152
    • Chapter 5
      • Mastering the Tools ..................................... 155
      • Patterns vs. Indicators ................................. 155
      • Managing Technical Tools ............................... 156
      • Price, Time, and Volume ................................ 160
      • Building Custom Indicators ............................. 162
      • Pattern Tools ........................................... 163
      • Trendlines ............................................. 164
      • Psychotic Trendlines ................................... 168
      • Parallel Price Channels ................................ 168
      • Gaps ................................................... 170
      • Triangles .............................................. 180
      • Flags .................................................. 183
      • Candlestick Pattern .................................... 184
      • Pattern Failure ........................................ 189
      • Indicator Tools ......................................... 192
      • Bollinger Band Tactics ................................. 193
      • MACD Historgram ........................................ 195
      • RSI and Stochastics .................................... 197
      • Volume Tools ............................................ 199
      • OBV 200 ................................................ 200
      • Farley's ADA (Accumulation-Distribution Accelerator) ... 202
      • Special Tools ........................................... 204
      • Fibonacci .............................................. 204
      • Market Numbers ......................................... 212
      • TICK ................................................... 213
    • Chapter 6
      • Understanding Time ...................................... 219
      • The Time Element ........................................ 219
      • The Market Clock ........................................ 221
      • Position Timing ........................................ 223
      • First Hour .............................................. 225
      • Opening Imbalance ...................................... 225
      • The Gauntlet ........................................... 226
      • Midday Markets .......................................... 229
      • Time for the Pros ...................................... 229
      • Finding Midday Winners ................................. 231
      • Last Hour ............................................... 232
      • Change of Character .................................... 234
      • Quitting Time .......................................... 235
      • Time of Week and Month .................................. 235
      • Seasons and Seasonality ................................. 237

  • PART TWO - THE 7-BELLS; TOOLS TO LOCATE OUTSTANDING OPPORTUNITIES
    • Chapter 7
      • Mastering the Setup ..................................... 243
      • Classic vs. Original Patterns ........................... 243
      • Pattern Recognition .................................... 244
      • Managing Opportunity ................................... 246
      • Two Classic Applications ................................ 248
      • 2B Top ................................................. 248
      • Description ............................................ 249
      • Setup Tactics .......................................... 250
      • Execution and Position Management ...................... 251
      • Reward Risk ............................................ 253
      • Channel Break ........................................... 253
      • Description ............................................ 253
      • Setup Tactics .......................................... 254
      • Execution and Postion Management ....................... 255
      • Reward:Risk ............................................ 256
      • Introducing the 7-Bells ................................. 257
      • Original Setups and Execution .......................... 257
      • 7-Bells Characteristics ................................ 258
      • Dip Trip-Price That Moves Against a Strong
      • Trend will Rebound Sharply ........................... 258
      • Coiled Spring-Constricted Price Gives Way
      • to Directional Movement .............................. 258
      • Finger Finder-Candles Flag Reversals in the
      • Next-Smaller Time Frame .............................. 258
      • Hole-in-the-Wall -- Gap Downs After Strong
      • Rallies Signal a Trend Change ........................ 259
      • Power Spike--High-Volume Events Print the
      • Future Direction of Price ............................ 259
      • Bear Hug-Weak Markets Drop Quickly after
      • Rallying into Resistance ............................. 259
      • 3rd Watch--Breakouts Through Triple Tops
      • Signal Major Uptrends ................................ 259
      • Trading Strategies ..................................... 260
    • Chapter 8
      • Dip Trip ................................................ 261
      • Characteristics ......................................... 261
      • Trade Mechanics ........................................ 262
      • Dip Strategies ......................................... 265
      • Applications ............................................ 268
      • The 38-62 .............................................. 268
      • Description ........................................... 268
      • Setup Tactics ......................................... 269
      • Execution and Position Management ..................... 269
      • Reward:Risk ........................................... 270
      • Continuation Dip ........................................ 271
      • Description ............................................ 272
      • Setup Tactics .......................................... 272
      • Execution and Position Management ...................... 273
      • Reward:Risk ............................................ 275
      • First Pullback .......................................... 275
      • Description ............................................ 275
      • Setup Tactics .......................................... 276
      • Exectuion and Position Management ...................... 277
      • Reward:Risk ............................................ 278
    • Chapter 9
      • Coiled Spring ........................................... 279
      • Characteristics ......................................... 279
      • Trade Mechanics ........................................ 279
      • Spring Strategies ...................................... 281
      • More on Range Bar Analysis ............................. 283
      • Applications ............................................ 285
      • Triangle Coil .......................................... 285
      • Description ........................................... 285
      • Setup Tactics ......................................... 286
      • Execution and Position Management ..................... 286
      • Reward:Risk ........................................... 287
      • Failure Coil I ......................................... 288
      • Description ........................................... 288
      • Setup Tactics ......................................... 289
      • Execution and Position Management ..................... 289
      • Reward:Risk ........................................... 290
      • Failure Coil II ........................................ 291
      • Description ........................................... 292
      • Setup Tactics ......................................... 292
      • Execution and Position Management ..................... 292
      • Reward:Risk ........................................... 294
    • Chapter 10
      • Finger Finder ........................................... 295
      • Characteristics ......................................... 295
      • Trade Mechanics ........................................ 297
      • Finger Strategies ...................................... 299
      • Other Considerations ................................... 300
      • Applications ............................................ 302
      • Hidden 100 ............................................. 302
      • Description ........................................... 302
      • Setup Tactics ......................................... 303
      • Execution and Position Management ..................... 303
      • Reward:Risk ........................................... 303
      • 2B Finger .............................................. 303
      • Description ........................................... 304
      • Setup Tactics ......................................... 305
      • Execution and Position Management ..................... 307
      • Reward:Risk ........................................... 308
      • Death Star ............................................. 308
      • Description ........................................... 308
      • Setup Tactics ......................................... 309
      • Execution and Position Management ..................... 311
      • Reward:Risk ........................................... 311
    • Chapter 11
      • Hole-in-the-Wall ........................................ 313
      • Characteristics ......................................... 313
      • Trade Mechanics ........................................ 313
      • Hole Strategies ........................................ 316
      • Applications ............................................ 319
      • 1-2 Decline ............................................ 319
      • Description ........................................... 319
      • Setup Tactics ......................................... 319
      • Execution and Position Management ..................... 320
      • Reward:Risk ........................................... 322
      • Support Hole ............................................ 322
      • Description ........................................... 322
      • Setup Tactics ......................................... 323
      • Execution and Position Management ..................... 324
      • Reward:Risk ........................................... 324
      • Island Reversal ......................................... 324
      • Description ........................................... 325
      • Setup Tactics ......................................... 326
      • Execution and Position Management ..................... 327
      • Reward:Risk ........................................... 328
    • Chapter 12
      • Power Spike ............................................. 329
      • Characteristics ......................................... 329
      • Trade Mechanics ........................................ 329
      • Spike Strategies ....................................... 332
      • Applications ............................................ 333
      • Breakdown Spike ........................................ 335
      • Pullback Spike ......................................... 337
      • Climax Spike ........................................... 340
      • Chapter 13
      • Bear Hug ................................................ 345
      • Characteristics ......................................... 345
      • Applications ............................................ 351
      • Intraday Short .......................................... 356
      • Chapter 14
      • 3rd Watch ............................................... 361
      • Characteristics ......................................... 361
      • Applications ............................................ 368
      • Watch Echo ............................................. 368
      • 3rd Watch Classic ...................................... 371
      • Swing Watch ............................................ 374
  • PART THREE - MAKING THE TRADE
    • Chapter 15
      • Precise Trade Execution ................................. 381
      • Timing and Methods ...................................... 381
      • Execution Target ....................................... 381
      • The Trading Day ........................................ 383
      • Building Execution Skills .............................. 386
      • Pullback Execution ..................................... 393
      • Trade Management ........................................ 397
      • Perfect Entry .......................................... 397
      • The Fill Machine ....................................... 398
      • Watching Active Positions .............................. 400
      • Exit ................................................... 404
      • Beating the Game ....................................... 406
      • Mastering the Tape ...................................... 409
      • ECNs and Direct Access ................................. 409
      • The Tape ............................................... 412
      • Level II ............................................... 415
      • Market Lies ............................................. 417
      • Fakeouts ............................................... 417
      • Whipsaws ............................................... 419
      • Noise .................................................. 421
    • Conclusion
      • Thirty Rules for the Master Swing Trader ................ 423
      • Trade Craft ............................................. 423
      • Rules for the Trading Game .............................. 424
      • Market Wisdom .......................................... 424
      • The Swing .............................................. 425
      • Time ................................................... 425
      • Execution .............................................. 426
      • Opportunity and Risk ................................... 426
      • Secrets of the Price Chart ............................. 427
      • The Master Swing Trader ................................. 428
  • Appendix A: Suppliers ................................... 429
  • Appendix B: Glossary .................................... 431
  • Bibliography ............................................ 439
  • Index ................................................... 441

Book Review:

In The Master Swing Trader, the author, Alan Farley gives the impression of attempting to encompass within 443 pages every rule and concept about short-term stock trading strategies that has ever been promulgated in modern literature. While this is not actually accomplished, the text gives the impression of providing "all you ever wanted to know about short-term, technical trading." Rather than being limited to a description of the technique of swing trading in the sense it was used by writers such as Gann, the discussion deals with the broad scope of strategies that underlie and surround swing trading, exposing the underlying activity that drives price action and provides the knowledgeable trader with profit opportunity.

This rather lengthy book's sixteen chapters are roughly divided among three major sections. The first, titled The Gateway to Short-term Trading, deals with chapters on Trading the Pattern Cycle, Preparing for the Market Day and Understanding Time. More than half the book is relegated to this section. In it Farley reveals the underpinning of his approach in subsections with intriguing titles such as "The Hidden Market," "Cross-Market Analysis" (not to be confused with inter-market relationships described by previous authors), "Avoiding The Momentum Trap," "Needle In The Haystack," "Trend Mirrors," Psychotic Trendlines" and "Farley's ADA (Accumulation-Distribution Accelerator)." The whimsical nature of some of these belies their inherent seriousness. No skip through the park, here! This portion of the book requires most careful reading more than once in order to understand the import of the author's ideas and appreciate the interrelationships among them. Here we find numerous descriptions of how the market works and how human players in the market game act in response to each other's machinations, causing familiar price patterns to form. Importantly, Farley points out those places on price charts where opportunities exist and the manner in which they relate to the actions of the various participants.

The author gives the nod to a number of trading tools that are capable of being represented visually. He is adamant about such tools being far more useful than those which rely on complex mathematical procedures, principally because of the temporal precedence of price action. Such patterns represent market activity as quickly as it can be shown. Within that construct the author covers the use of a broad spectrum of popular trading techniques, ranging from predictive indicants such as Elliott Wave to purely descriptive tools like trend lines and chart patterns. Particular emphasis is given to the last of these. Farley's use of patterns, while possibly not unique, includes some original twists to pique the interest of the careful trader.

Also included in the first section is a hallmark of Farley's style, the use of cross-validated, multiple time-frames. Traders are well aware of the value of working across time frames. The same is true of using several tools to provide a stronger statement than is yielded by only one. Farley combines these techniques. He recommends "cross-verification," the use of several market tools to provide consensual validation of a setup or entry position, in concert with several indicants of support/resistance across time frames. Of particular interest is the author's use of a combination of S/R levels with Fibonacci retracements. These, applied in three time frames, form a key strategy for a confident entry and are represented in examples of numerous stock trades.

The second major section of this book is titled, "The 7-Bells: Tools To Locate Outstanding Opportunities" in which a generous chapter is devoted to each of seven specific trading techniques. If the reader has been anxiously looking through preceding pages for a by-the-numbers, how-to-do-it description of market entry, he finds it here. The detailed use of each indicant is described and is further amplified by advice regarding when and how to use other tools in conjunction with each of them, a hallmark of Farley's strategy. This theme is reiterated throughout the book. Its truth is proven through the graphic display of numerous examples, also explained in the text.

The chart patterns that are subsumed under the 7-bell title have cute names such as Finger Finder, Hole-in-the-Wall and Bear Hug. A quick perusal of these chapters reveals the cutesies to be well-known formations. Well, why not? Did we expect the author to have invented new market activity? Not to be put off, we read further and find details about these well-known formations that have eluded us throughout our trading career. Furthermore, it begins to appear that the lack of this information may have been responsible for losses where there might have been profits. Take an introductory remark to the Dip Trip (cute name for buying a dip) chapter as an example:

Strong rallies generate sudden corrective movement to shake out weak hands. Swing traders can buy these pullbacks within a tick or two of a major reversal under the right conditions. The dip trip recognizes that many of these selloffs represent low-risk buying opportunities. But countertrends often last longer than expected, and no one wants to be stabbed by a falling knife. So, effective risk management requires careful stock selection, the right decline, and precise timing.

In the sixteen pages that follow this statement we find a method of trading out of a retracement that is specific and satisfies the author's requirements. Each of the "bells" is similarly described, with attendant instructions on trade mechanics, setup tactics, trade execution and position management. Examples are clear and are documented graphically. This section is worth the price of the book.

The final section of the book deals with trade execution. While relatively short by comparison to the previous segments, it is nonetheless important, providing detailed advice about timing entry and exit. Such niceties as the specifics of trading a pullback most safely and the building of execution skills are among those covered.

The style in which this book is written reveals that the author obviously enjoys reaching his craft. He is a voluble, articulate writer who has something to say. He presents a vast array of facts and relationships revealing only a smattering of priority among them. To use all of these, the reader would need a prodigious memory, indeed. One gets the sense that Farley has provided enough good tools to allow a dedicated student to select judiciously from among them and put together a well-organized program of short-term trading whose rationale he understands and that has reasonable chance of being profitable. This book is the kind that lends itself to multiple readings, allowing additional information to be added to the trader's bag of tricks each time.

Review by Edward Dobson, President
Traders Press, Inc.

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