Taylor's trading technique

"Taylor's trading technique", a short-term method for trading intra-day price movements that relies entirely on odds and percentages. This is a method as opposed to a system. Very few people can blindly follow a system, although many find it easier to be controlled by a system approach.

Since the short-term swing technique (a technique based on fluctuations) leads to frequent trades, it is important to know the " rules of the game "in order to capture profits and look for the"true trend". Losses are taken just to get a better position. Trading is conducted strictly for future results, and not based on what the market can do.

Knowing the "rules of the game" means knowing when to buy or sell, exit or hold. Trades are based on" objective points", which are simply the highs or lows of the previous day. The movement between these two points determines the "true trend".

When you trade on fluctuations, manage your expectations. The lower your expectations, the happier you will be and, surprisingly, the more money you will probably be able to make! Entering the market is part of the pie, but you must also trust yourself to get out of bad trades. It is important to use closer stop orders when trading on fluctuations and wider stop orders when trading on a trend.

This method teaches you to expect! Never react! Know what you are going to do before the market opens. Always have a plan - but be flexible! Consider your stop order (support or resistance) before opening a position. Know how to trade in case of unfavorable development of events and to get out of losing trades with the least loss.

Finally, never trade in narrow, dead markets. On them, the fluctuations are too small. Never pursue the market. Instead of worrying that you missed a move, think instead, " Great! I will have a movement in the opposite direction."
Basic rules of swing trading

Due to the short-term nature of this technique, swing traders must adhere to some basic rules, including:

· If the market is moving in your favor, move your position to the next day. Plan to exit the next day near objective levels. The night gap is an excellent opportunity to take profits. Focusing on just one entry or exit per day reduces psychological pressure.

· If your entry is correct, the market should move in your direction almost immediately. It may return for testing and exceed your entry point by a bit, which is normal.

* Do not transfer a losing position to the next day. Go out and play the next day in a better position.

* A strong close indicates a strong opening for the next day.

· If the market does not go as expected, exit at the first pullback.

· If the market offers you a big profit, take it.

· If you are in a long position and the market closes flat, indicating a lower opening the next day, exit the position. Play the next day with the best position.

* Use close stop orders when trading on fluctuations (wider stop orders when trading on a trend).

· The goal is always to minimize risk and make money.

· When in doubt, get out! You've lost your compass and your game plan!

Trading on fluctuations

When to enter the market? The following can be an indicator of the day of purchase or the day of sale:


Start looking for the day of purchase 2 days after the upward swing or, conversely, the day of sale 2 days after the downward swing. Ideally, if the market moves in a full 5-day cycle. (In a strong trend, the market will move 4 days in the main direction and only 1 day in the correction direction. So, you need to search for an entry 1 day earlier.)

"Bird" when testing

A potential entry point is selected opposite the previous day's close. If, when considering buying (selling), you want the market to first "test" the minimum (maximum) of the previous day, preferably at the beginning of the day, and then form a trading model that resembles a "bird" (see examples).

Day Cycle

This model establishes a "double stop point" or strong support. If you enter the market with only a "single stop point" or support formed only by today's low, exit on the same day - trading is clearly against the trend.

Closing vs. opening

Closing must indicate the opening of the next day. When the market doesn't open as expected or as indicated by a trend, you can wait for the change first - but you should pick up the profit quickly. Then watch the u-turn!

Support (resistance)

See where today's support (resistance) is, above or below yesterday's.

measurement of vibrations

Where is the market relative to the past swing up or down? Look for fluctuations (up or down) of equal length, and with recoveries of the same percentage.

Additional considerations

Regardless of the time format, always look for resistance at the top and support at the bottom. The intersection should be accompanied by volume and increased activity.

The following conditions are reliable enough to start an uptrend or downtrend.

- The narrowest range in the last 7 days

- 3 consecutive days with a small range

The point of the wedge


- Increase ADX (with 14 periods) above 32


Since gaining confidence in any technique requires that it is consistently applied when trading, trading on training accounts can help gain the confidence necessary to recognize this technique and trade on repetitive patterns. While it is always tempting to try many different styles and methods, you should strive to ultimately trade in only one consistent manner - or at least combine the methods into your own unique philosophy.