SWING ACADEMY

The Simple Moving Average is the most fundamental indicator. It takes the closing price over the last N days and averages them. That's it. The resulting line smooths out daily noise so you can see the underlying trend.

A 20-day SMA adds up the last 20 closing prices and divides by 20. Every new day, the oldest close drops off and the newest one is added. The line moves forward slowly and evenly — hence "simple."

Notice two things: the 20 SMA (gold) tracks price closely, while the 50 SMA (purple) is much smoother and lags further behind. Shorter period = more responsive. Longer period = slower but more reliable for trend direction.

The Exponential Moving Average solves SMA's biggest weakness: it reacts faster to recent price changes. Instead of weighting every day equally, EMA gives more weight to recent closes. The newest day matters most; the oldest barely matters at all.

Translation: today's close gets multiplied by a weighting factor; yesterday's EMA gets most of the rest. This creates a line that hugs recent price action much more tightly than an SMA of the same length.

Look at how tightly the 8 EMA (green) follows price compared to the 20 SMA (gold). The 8 EMA reacts almost immediately; the SMA is still catching up. That responsiveness is exactly what you want for swing trades measured in days, not months.

RVOL is the single most important indicator for OTC trading. A candle pattern without volume is just noise. RVOL tells you whether the move is real — whether actual buyers and sellers are behind it, or whether it's just thin-market drift.

An RVOL of 1.0 means today's volume is exactly average. 2.0 means double. 0.5 means half. Simple ratio, massive implications.

The gray bars are normal volume — quiet, random, uninteresting. The green bars are the ones that matter. That's real buying or selling pressure, not drift. Every major price move should be backed by an RVOL spike. No spike, no trade.

RSI is a momentum oscillator bounded between 0 and 100. It measures the speed and magnitude of recent price changes to identify when a stock is overbought or oversold. Unlike moving averages (which show direction), RSI shows intensity.

You don't need to calculate it — TOS does it for you. Just know what the output means:

MACD combines two EMAs into a trend-change detector. It doesn't just tell you direction — it tells you how the direction is changing. That's why it's one of the most used indicators in the world.

Three components work together:

No single indicator wins. The trick is stacking them so they check each other. When three independent signals agree, false readings drop dramatically. This is called confluence, and it's the real edge.

The three ideal entry setups:

Real-world applications:

Ten questions covering SMA, EMA, RVOL, RSI, and MACD. One correct answer each. Scored out of 10 at the end.

Support is a price floor — a level where buyers have stepped in before, creating demand that stops price from falling further. Resistance is the opposite — a price ceiling where sellers have historically dumped supply, stopping price from rising further.

These are not magic numbers. They exist because of memory. Traders who bought at a level defend it. Traders who sold at a level short it again. Prior tops and bottoms become battlegrounds because the people who got stuck there are still reacting.

Notice the circles — each marks a point where price tested a level and was rejected. Two tests confirm a level. Three or more confirms it's strong. The more times a level holds, the more traders watching it will expect it to hold again — until it breaks.

Support and resistance are horizontal. Trend lines are diagonal. They do the same job — mark levels where price is likely to bounce — but they slope with the direction of the trend. That's why they're called dynamic support and resistance.

A breakout is when price closes above a key resistance level on above-average volume. A breakdown is the mirror — closing below a key support level on volume. These are the moments when structure resolves and a new trend begins.

The chart shows the classic pattern: price compresses between support and resistance for weeks (volume quiet), then one day it punches through resistance with a massive volume spike. That's the breakout. The volume is not optional — without it, the move is suspect.

A pullback is a counter-trend move within a larger trend. In an uptrend, price moves up, then pulls back temporarily, then continues up. These pullbacks are where disciplined traders enter — not at the top of the rally, but at the pullback that follows.

Each gold circle marks a pullback to the 8 EMA. Price dips, touches the EMA, holds, and continues the uptrend. That's the swing entry. You're not chasing the top of the move — you're buying the dip with the trend still intact.

Structure alone gets you levels. Candles get you timing. Indicators get you confirmation. Stacked together, they form a complete setup template. Here's how all three lessons interact in a real trade.

Real-world setup templates:

The vocabulary of structure in one page. Save this — every trade you take should fit one of these patterns, or it shouldn't happen.

Ten questions on support & resistance, trend lines, breakouts, and pullbacks. One correct answer each. Scored out of 10 at the end.

Every position you hold walks you around the same emotional loop. It is remarkably consistent, and it does not care whether you are trading a blue chip or a stock priced in fractions of a cent. Learning the loop matters because each stage produces its own predictable mistake.

Look at where the two worst mistakes sit. Euphoria removes protection at the exact top. Capitulation sells at the exact bottom. Both feel completely reasonable at the time. That is what makes them expensive — they never announce themselves as errors.

These five have names because they have been studied for decades and they show up in every market, in every account size. Naming them is not academic — a mistake you can name is a mistake you can catch yourself starting.

Tilt is a poker word that trading borrowed. It describes the state after a run of losses where you are still making decisions but your judgment has quietly degraded. The dangerous part is that tilt does not feel like impairment. It feels like determination.

A losing streak is not evidence that your method is broken, and this is worth understanding properly. If your method wins 40% of the time — a perfectly workable rate when your winners are bigger than your losers — then a run of five losses in a row will happen roughly once in every thirteen sequences of five trades. It is ordinary. It is built into the arithmetic.

There is exactly one reliable cure for tilt and it is unglamorous: stop trading for a defined period. Not until you feel better — feeling better is unreliable and arrives right when you are least objective. A fixed period: the rest of the day, or the rest of the week if the drawdown hit your weekly cap.

One more piece of arithmetic worth carrying. The damage from tilt is rarely the individual bad trade. It is the sequence — the trade taken to fix the last one, then the bigger one taken to fix that. Most accounts that are destroyed were not destroyed by a market event. They were destroyed over about two hours by someone trying to get back to even.

A trade plan is not a forecast. It is a set of instructions written by you, for you, covering the four things you will otherwise decide badly under pressure: where you get in, where you get out if you are wrong, where you get out if you are right, and how much you are risking.

If any of the four is missing, the trade is not planned; it is started. And the one people skip is almost always the stop, because writing down where you will admit you were wrong is the least pleasant sentence in the exercise.

The last two lines are the ones that separate a plan from a wish. A plan that only describes the good outcome is not a plan. Write the prohibitions down — they are the instructions that will be under attack when the trade goes against you.

Everything so far applies to a trade you have not taken yet. This chapter is about the harder situation: you are already in, it is far down, and every rule in the lesson is now fighting your own cost basis. This is where OTC positions do most of their damage, because thin stocks fall further and faster than anything on a major exchange.

Take AITXD, which the earlier lessons used as an example. A position opened near $0.117 and now trading around $0.045 is down roughly 62%. Three separate psychological forces are now operating at once, and they are pulling in the same direction — hold.

Notice that the honest answer can genuinely be yes. "Wait and see" is a legitimate decision when the remaining money is small relative to the account, when there is a specific event you are waiting for, and when the alternative — selling into a very wide spread — would itself cost a large slice of what remains. What makes it legitimate is that it was decided, with the reason written down, rather than defaulted into.

The whole lesson on one screen. The left column is what you feel; the right column is what to do about it. Read it before the session, not during.

Ten questions on the emotional cycle, the five errors, tilt, and the written plan. One correct answer each. Scored out of 10 at the end.

A market order says: fill me now, at whatever price is available. It is the only order type that is effectively guaranteed to execute — and the only one that gives you no say whatsoever in the price you get.

On a heavily traded stock this is usually harmless. If a stock trades tens of millions of shares a day with a one-cent spread, your market order crosses that one cent and you are done. On a thin stock it can be brutal, and the mechanism is worth understanding rather than just fearing.

A limit order names a price and refuses to do worse. A buy limit at $0.0046 will fill at $0.0046 or lower and never higher. A sell limit at $0.0588 will fill at $0.0588 or higher and never lower. You have taken complete control of price, and given up all certainty of being filled.

There is one honest cost, and it is not the fill price — it is the trade you do not get. Price comes down to $0.0047, turns, and runs without you. Your limit at $0.0046 never traded. That is the price of discipline, and over a long run of trades it is much cheaper than the alternative, because the trades you miss are disproportionately the ones that were running away from you anyway.

A stop order is an order that does not exist yet. It sits dormant until price touches a level you chose — the stop price — and only then does it wake up and become a live order. It is the mechanism that lets the calm version of you protect the position while you are not watching.

There are two kinds, and the difference between them is the single most misunderstood thing in this lesson.

A fixed stop protects you from a loss. A trailing stop also protects a gain. You set it as a distance — a percentage or an amount — and it follows price upward, never downward. Every new high drags it up behind. When price finally turns and travels that distance against you, it triggers.

Read that line again and notice what happened. The trade never had to be sold at a target you guessed in advance. It was allowed to run to $0.075, and it exited at $0.069 — a 38% gain — because the trailing stop ratcheted up and then held its ground. That is the entire argument for trailing: it lets a winner become a big winner without ever asking you to predict the top.

Everything above matters more as a stock gets thinner, and OTC stocks are the thin end of the market. Here is what actually changes.

Every order type on one screen, with the one thing each of them guarantees and the one thing each of them does not.

Ten questions on bid and ask, market and limit orders, stops, trailing stops, and thin-market handling. One correct answer each. Scored out of 10 at the end.

The oldest rule in professional trading: no single trade may cost you more than 1% of the account. Some traders run 0.5%, some run 2%. Almost nobody who lasts runs more than 2%.

Note carefully what the 1% is not. It is not 1% of your account put into the stock. It is 1% of your account lost if the stop is hit. On a $20,000 account you might buy a $1,500 position — but if your stop is only 13% below your entry, the trade still risks only about $200. The position size and the risk are two different numbers, and confusing them is the most common sizing error there is.

Here is the change that separates a system from a hunch. Most people decide how many shares to buy based on how confident they feel. In a real method, you never choose the size at all. You choose the risk and the stop, and the size is whatever number falls out of the arithmetic.

Now watch what happens when the chart demands a wider stop. Same account, same $200 risk, but the only sensible support is at $0.038 — a risk of $0.014 per share. The formula returns 14,285 shares, exactly half as many. A wider stop does not mean more risk; it means a smaller position. The risk stays fixed at $200 by construction.

Once every trade risks the same amount, you can stop counting dollars and start counting in a single unit. That unit is R — your risk on the trade. If you risked $200, then $200 is 1R. A trade that made $600 made 3R. A trade that lost the full stop lost 1R.

This does two useful things at once. It lets you compare a trade in a $0.05 stock with a trade in a $50 stock on the same scale. And it takes the emotion out of reviewing your own record, because a run of results reads as +2R, −1R, −1R, +3R rather than as money you can feel.

Read that carefully, because it overturns the thing most beginners believe. A high win rate is not the goal. A method that wins 70% of the time with winners of +1R and losers of −2R has an expectancy of (0.7 × 1) − (0.3 × 2) = +0.10R — it feels twice as good and performs half as well.

Risk per trade protects you from one bad trade. It does nothing about six bad trades in one afternoon, or about ten positions that all fall together because they were the same bet wearing different tickers. That is what caps are for.

The open risk cap is the one traders discover late. Five positions each risking 1% is not 1% of risk; on a day when the whole market falls together it is 5%, because correlated positions hit their stops on the same day. Add up the risk on everything live before you open the next one.

Thin stocks break three of the assumptions that the standard rules quietly make. Each one needs an extra limit.

The numbers to have on paper before the market opens. Fill in your own account figure and the rest is arithmetic.

Ten questions on drawdown arithmetic, risk per trade, position sizing, R multiples, and the caps. One correct answer each. Scored out of 10 at the end.