📈 Advanced Swing Trading with the Golden Swing Strategy (GSS)
🚀 Refining the Golden Swing Strategy for Maximum Profits
In our previous discussions, we covered the Golden Swing Strategy (GSS), a buy-on-dips and sell-on-rallies trading system that leverages RSI, Bollinger Bands, Supertrend, and ATR to identify high-probability trades. Now, we refine our approach by covering:
✅ Precise Buy & Sell Conditions Using RSI 20 ✅ Filtering Trades with Supertrend & Bollinger Bands ✅ Setting Stop-Loss & Targets Using ATR Calculations ✅ Live Market Examples: Successful Buy Trades ✅ Understanding Why Sell Trades Are Limited in Bullish Markets
📊 Using RSI 20 for More Accurate Trade Setups
Why RSI 20 Instead of RSI 14?
Traditional RSI (Relative Strength Index) is calculated using 14 periods, but for swing trading, we use RSI 20 because:
It is less sensitive to small pullbacks.
Prevents unnecessary exits due to minor dips.
Ensures that uptrends stay valid even after short corrections.
👉 Buy Condition: RSI should stay above 50. 👉 Sell Condition: RSI should stay below 50.
Using RSI 20 avoids fake signals and focuses on stronger trends.
📉 Filtering Trades with Supertrend & Bollinger Bands
Apart from RSI 20, we add Supertrend (10,2) and Bollinger Bands (20 SMA) to confirm trade setups.
Supertrend Settings (10,2) vs. (10,2.1)
Supertrend (10,2) is used for buy signal confirmation.
Supertrend (10,2.1) could be used, but it is placed too far away, increasing risk.
We keep Supertrend close enough so that price touches it but does not close below it.
👉 Buy Condition: Price should breach the Supertrend but not close below it. 👉 Sell Condition: Price should move below Supertrend, confirming a downtrend.
Using the Mid-Bollinger Band (20 SMA) for Confirmation
Price should pull back to the Mid-Bollinger Band before a buy trade.
If Supertrend is above Mid-Bollinger Band, it is not a valid buy signal.
📌 Example: IndusInd Bank Buy Trade (13 Nov 2023) 1️⃣ RSI was above 50 (50.08). 2️⃣ Supertrend was breached but did not turn red. 3️⃣ Price touched the Supertrend value of 1458.85 but closed higher. 4️⃣ Supertrend was below Mid-Bollinger Band, confirming a strong buy.
✅ This setup met all conditions, making it a high-probability buy trade.
🎯 Setting Stop-Loss & Target Using ATR (Average True Range)
ATR is a critical component of the Golden Swing Strategy, used to determine: 🔹 Stop-loss placement → Below 1.1 ATR from entry. 🔹 Target price → 2.2 ATR above entry for profit booking.
📌 Example: IndusInd Bank ATR Calculation
ATR on 13 Nov 2023: 27.88
Half ATR: 13.95
Maximum Buying Price: 1472.8
Stop-Loss (1.1 ATR below): 1442.1
Target (2.2 ATR above): 1534.1
📈 Trade Result: ✅ Target achieved in 6 days 🎯 ❌ No stop-loss hit
📌 Live Market Example: Cummins India Buy Trade (12 Dec 2023)
Trade Setup: ✔ RSI above 50 ✔ Price breached Supertrend without closing below it ✔ Supertrend was below Mid-Bollinger Band
🔹 Trade Execution Details:
Supertrend Value: 1880.50
ATR: 73.69
Max Buying Price: 1925.35
Stop-Loss: 1844.29
Target: 2087.47
✅ Trade still active & close to hitting target 🚀
📉 Why Are Sell Trades Limited in Bullish Markets?
Since the market is in a strong uptrend, sell trades have been rare. To identify a strong shorting opportunity, the following conditions must be met:
🔻 Sell Condition:
✔ RSI below 50 ✔ Supertrend above Mid-Bollinger Band ✔ Blue Line below Red Line (Bearish Momentum)
📌 Example: Hindustan Unilever (HUL) Sell Signal (24 Aug 2023)
All sell conditions met
Price dropped significantly afterward
However, no recent sell trades due to market strength
🏆 Key Takeaways: Mastering the Golden Swing Strategy
🔥 Optimized Entry Conditions:
✔ Use RSI 20 instead of RSI 14 for stronger trend confirmation. ✔ Supertrend (10,2) must be breached but remain green. ✔ Mid-Bollinger Band (20 SMA) must be below Supertrend for valid buys.
🎯 Stop-Loss & Target Calculation:
✔ Use ATR to determine max buying price. ✔ 1.1 ATR = Stop-Loss | 2.2 ATR = Target.
⚡ Why No Recent Sell Trades?
✔ Market is in a strong uptrend—selling opportunities will come in a bearish phase. ✔ Wait for RSI to dip below 50 + Supertrend confirmation for shorts.
🚀 What’s Next?
Now that we have mastered GSS for swing trading, in the next section, we will explore:
🔹 Live Market Scanning: How to Quickly Identify GSS Trade Setups 🔹 Trade Management: Scaling In & Out for Maximum Profits 🔹 Combining GSS with Fibonacci for Higher Accuracy
Stay tuned as we continue unlocking professional trading strategies! 🚀
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