Adaptive Swing Trading Systems

In this three-month format, Dr. Ken Long presents a series of advanced, adaptive trading systems that work well in the swing period holding timeframe – from two days to two weeks.

Note: The Foundation course is required learning in order to attend Ken's technical courses. If you have not yet attended the Foundation Course, select it from the options below. One may take Foundation and up to two technical courses per quarter if your time allows.

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Foundation Course With Ken Long - Quarter 4 Begins October 1st 2022
Swing Trading Course With Ken Long - Quarter 4 Begins October 1st 2022

Regression Lines – An Adaptive Framework:

For years, Ken has been looking at regression lines to help him understand the broader trends in the market.   Recently, he started applying linear regression methods to individual indexes and to individual stock prices to see what he could find.  Ken is constantly finding what works and then extending it.  He knew that a regression line gave the best linear description of a data set using its slope, and its R2 figure provided very helpful information.  Don't worry if you do not understand these terms or basic statistics—just know that regression lines can be very useful when applied in an appropriate trading system.  In simpler language—they work!

As have most traders, Ken has heard plenty about moving averages crossover-based systems over the years.  The idea has plenty of merit for finding shorter-term opportunities within longer-term trends.  That is when there are trends.  A major problem for moving average crossover systems lies in the flat periods.  Traders can get “chopped up” when the price moves up and down causing the averages to cross and then cross back again.  Ken wondered if regression lines would work better.  They did – but not good enough to have a great trading system yet.

After more thinking, a good amount of research, and testing various strategies, Ken found two additional inputs that added much confidence for his entry and exit signals.  Ken first paper traded the concept for a while and then started a prototype trading test with small positions of real money and intraday holding periods.  As he traded and evolved the concepts, they gained more clarity and evolved into a framework for a kind of trading with several possible entries and several possible exits.  Today, he trades several variations of regression line crossovers (RLCO) on an intraday basis with a “production level” position sizing strategy.

Lesson Structure:

There will be one lesson per week allowing you to manage your own study time and calendar. Lessons are delivered through live-stream and recorded material. In both cases, Ken will be available for live questions during and after the lesson.

This combination of recorded lectures, nightly strategy podcasts,  and live Q&A weekend sessions will also include access to past terms' Q&A sessions.

The Case For Adaptive Systems:

In this 4 minute video, Ken discusses the challenging market conditions for swing trading systems in the second half and the first half of various years. Ken has been evolving his thinking about systems and strategies from being strictly mechanical to being more adaptive.  He discusses those ideas in the following video.

Click here to view the video

Top Benefits of the Regression Line Framework:

Finds Critical Moments:  The RL framework helps traders identify key moments when the market or a single issue has an increased probability of transitioning from one trend to another.

You have a very good idea when price will start to move, continue to move, or has finished its move.

Works in Multiple Market Directions: The RL framework helps traders when price is moving up, down, and sideways.

You can focus on one tool to help you understand price regardless of the direction

Works in Multiple Timeframes: The RL lens applies to time frames as short as minute charts to weekly and monthly timeframes.

Day traders, swing traders, and even long-term traders can use the RL framework effectively.

Adaptive: The system adapts as price and volatility change whether that is smooth or discontinuous.

You can focus on one tool to help you understand price regardless of the volatility.

Applicable to Multiple Markets:  The RL framework offers insights and can be traded in various capital markets: equities, currencies, and commodities so far.

You will not have to switch markets to trade RL.

Continuous Update: The RL framework combines the immediacy of assessing current snapshots of market conditions and evolves with the market.

As prices move, your understanding and expectations adapt along the way to allow you to manage your trades better.

Captures Multiple Kinds of Trades:

There are seven specific RLCO entry patterns and several additional patterns using the regression lines and other inputs to get traders into positions with good probabilities of profitable outcomes.  The various patterns can be found multiple times during the week in your favorite trading universe.

Sound Analytical Foundation: The broad application of regression lines across both hard and soft sciences, in theory, and practice, business, and academy suggest that it will continue to be robust and useful.

You can know RL works without researching its basic concepts because they have been broadly studied.

Forward-Looking:  Regression lines help forecasters in numerous fields assess future possibilities.  They can help traders understand past prices, and they allow us to take informed action in the future with confidence.

You can understand how much price might move with some confidence.

Market Context: The RL framework helps traders answer an important question - How extreme is the current condition historically? The answer helps you evaluate how critical, unusual, or abnormal the current price structure is and adjust your expectations for the level of the following action.

You can be prepared for and win from potential big moves in the market.

Disciplined Approach: The RL framework can act as an overlay when applied to different systems and time frames.  It can provide important context and keep you grounded when it comes to making decisions across systems.

You can continue using your current trading systems and add RL framework methods to help

Additional Adaptive Swing Trading Systems:

In addition to the robust seven patterns found in the RL Framework, Ken will also teach at least three other swing trading systems:

1. MaxPain Range Compression System:

In any given two-week period, some stocks and ETFs will be down.  If you compare all of the issues that are down, some of them are down more than others.  These are the issues with “max pain.”  Of that max pain group, some of them are very near their 10-day lows – they have not yet started to recover.  These are the ones who have range compression.  MPRC symbols have a higher probability of popping than other groups, and Ken has effective and simple ways to take advantage of these situations.   

2. Auto Frame System:

For this system, Ken starts with the assumption that every symbol has a reward to risk relationship with its 10-day high and ten-day low.  The potential long reward is the distance from its current price to its 10-day hi, and the risk is the distance from its current price to its ten-day low.  Ken will stalk those symbols very closely with the greatest reward to risk ratio within those parameters.  That idea is so simple that you might not think this system would work well but if you thought that, you would miss out on nearly daily opportunities.

3. Daily Squeeze Play System:

While prices do not move reliably in a cyclical pattern, volatility tends to move much more cyclically. Periods of high volatility typically follow periods of low volatility.  With an effective way to find symbols that have had low volatility recently, Ken has developed an effective system that captures those volatile moves out of the narrow price ranges.

Market Monitoring:

As Van urges traders to watch the big picture and describe the market character with some classification system, Ken has such a system that he will teach at the workshop.  He monitors a handful of standard and homegrown statistics to help him interpret the market and consider possible scenarios.  He will describe both the calculation of the homegrown statistics and the usage of them so that the workshop traders understand them as well as can consider how to adapt them for their use if they like.

What About “You”? Your Most Important Asset:

Even though this is a technical workshop and not a Peak Performance event, Ken will talk a lot about what he does and what you can do to help yourself generate better results through various strategies.

One of the most effective self-development strategies Ken uses personally and many of his chat room traders also follow is to keep a learning journal.  A learning journal follows a specific format that was developed by leaders in the area of adult learning theory.  The format and process employ some simple steps that better integrate your experiences, reflections, and follow-up plans than anything else available right now.

If you ever get a chance to join Ken in the chat room, you will see him and the other traders make a nice win, endure a loss, and in either case – talk about getting to the “zero state.”  This idea of state management is critical for being able to take the next action you need to – without lingering emotion from the last trade.  Ken will go over some strategies he uses to manage his mental state and trade from the zero state.

Adaptive Trading Systems – A Quick Q & A:

What is an Adaptive Trading System?

Adaptive trading systems have rules and rule parameters that adjust to market conditions and price conditions rather than remaining constant.

Which kind of rule parameters works better, adaptive or mechanical?

They both work well; they just work differently.  Mechanical rules are more easily understood, are easier to program, and they are easier to execute.  Mechanical rule-based systems typically do not adjust to changing market conditions and therefore are out of the market at times when the condition criteria are unmet. These are the kind of systems detailed in the Swing Trading Elearning Course.

Adaptive rules require a better understanding by the trader of price action, of self and the market.  These systems can also take more time to monitor and to execute.

You now have two Swing Workshops, one live and one recorded. Which course should I take, the online swing trading course or the live swing trading workshop?

There’s not a simple answer because the courses cover different systems at different levels of assumed knowledge and experience.  If you have not traded very much or if you have not been profitable yet for any stretch of time, Ken recommends that traders start as he did—with mechanical rule-based systems.

Mechanical, rule-based systems are the kinds of systems taught in the Swing Trading Systems Elearning Course.  Once you are competent in trading those kinds of systems, then you can progress to the adaptive systems — if you want.  There’s a level of skill or craft and knowledge you will develop from the experience of following your rules that then proves its worth as you move into less mechanical trading.

If you have been trading for some time already, especially Ken’s day trading or swing trading systems, you will find the advanced swing workshop’s systems to be an extension of what you have been doing already. 

If I have not been trading very long or I have not been trading more mechanical systems, can I still attend?

Yes. With the new quarterly format, more novice students will have time to keep pace. Taking the Swing Elearning course first is also very helpful. 

Am I required to take any other course or workshop before this one?

Yes. The Foundation course is required before all quarterly offerings by Ken Long. This course lays all the groundwork needed for all three quarterly offerings. Note: If you are new to trading, Ken recommends you take Foundation alone (no technical courses added) during your first quarter.

Student Feedback

The best aspect or takeaway from the course was:

  • The follow-up webinars to check my learning progress and catch many of the topics Ken does not have time to cover in class.
  • The effective way this course was taught. I got it and retained a lot the information.
  • Difference between execution stops and position sizing stop. 
  • Understanding patterns.
  • Insights into market mosaic and risk index. 
  • Structured thinking in developing the system.
  • "Owl" as a very convincing pattern.  
  • It opened many doors for my conceptional thinking about trading. A few dozen "AH HA’s"
  • The concept of protecting "average wins."
  • Ongoing chatroom community.
  • Cost of certainty. 
  • Many ideas for framing trades, finding trading candidates and managing them.
  • Trading multiple time frames. 
  • The potential mechanization of swing trading systems.
  • Stress reduction via 'Frog Box" and execution stops.         

I was most surprised by:

  • Easy ways to trade US markets from Australia.
  • How simple and robust the ideas are.
  • I love the body of knowledge Ken has achieved and how he moves it forward. 
  • Difference between execution stop vs. position sizing stop.
  • Performing re-entires.
  • The most generous approach of Ken sharing his knowledge. Outstanding. Very appreciated!
  • Pre-class study material to prepare better for the class.
  • How mechanical 'Owl" can be.
  • When to hold swing trades. 
  • The number of potential trading opportunities that I have been missing.
  • The importance of remembering why I trade and who for.
  • The speed at which I picked up OWL trading.

A Few Traders Have Already Had the Opportunity to Trade These Systems, Here's What They Have to Say:

"I cannot say enough good things about Ken’s new adaptive swing trading systems.  Ken provided the systems, strategies, and tips to help me take my trading to a professional level.  I do not want to sound cheesy, but the swing systems’ trades were able to pay for the course within about two weeks.  I highly recommend this workshop to anyone who is serious about swing trading." —Terry H., Buckingham County VA

"There have been so many golden nuggets from the adaptive swing course.  Moreover, it is not just learning the rules — it is also managing the exits, the “off-field” preparation, trade framing, developing my skills, and more. And every single one of those lessons transfer directly to the markets outside the US that I trade. 

I could not say exactly how many R multiples all those lessons learned have saved me on the downside. I could not say either exactly how many more R I will make on the upside.  I can say that I have doubled my trading returns already as a result of doing this course.  The course was a key part of my trading success that I did not know was missing."— Dave C, Cairns Australia 

"The adaptive swing trading course has been a great experience. Ken's lessons are really instructive, and he shows how he trades and manages positions. That is phenomenally helpful. It is great to see a master trader at work, and Ken shows every detail of that in this workshop which is well-organized. The coursework is very thorough, the homework is a nice progression through the material, and everyone partnered up with a team so that we can learn jointly."— Margaret O, Red Bank, NJ

"I attended Ken's live swing workshop in person in 2014 and at the time of this writing (April 2016), I have nearly completed his adaptive swing course. I highly recommend both of Ken’s swing workshops. He has provided a wealth of highly useful information, insights and support – far more than I have experienced at other trading events. He uses a combination of statistical analysis, proven trading systems, strategies, techniques, and tips accumulated over decades of work and input from a diverse group of traders.

He also guides people through the emotional and cognitive elements of self-discovery and self-mastery. Invaluable, for anyone embarking on a similar journey, Ken is a unique and highly valuable resource, a dedicated teacher, a wonderful mentor and one of the most generous human beings I know. What's more, I now have a series of accurate measures to help me refine my trading to the point where I can demonstrate true mastery and above average results. I cannot ask for more." — . Jeremy K, Brisbane Australia

Ken is extremely generous with his time and knowledge and can make ideas easy to learn and understand. His systems are very actionable! — M. Grossbard, AU

Very good course. Enlightening. Fun. Wonderful. — T. Hee, Malaysia

I love Ken and his approach and enthusiasm. — K. Cooper, Canada

Van Talks About Your Instructor, Ken Long:

Ken Long started investing in mutual funds in the 1990s but has grown over the last fifteen years into an outstanding big-picture thinker and tactical trader. He has also evolved his strategies over the years and teaches his latest advancements in this workshop.

When Ken Long first attended my Systems Development workshop in the mid-1990s and submitted his objectives to me, I thought to myself, "Someone from the Army is going to apply this material?" Little did I know that Ken Long would not only apply it but master it and become one of the best traders I have met. I first asked Ken to help me teach the How to Develop A Winning Trading System workshop many, many years ago. He also taught with me in the Blueprint For Trading Success Workshop. Then, as Ken started developing a successful trading system, he started teaching his workshops for VTI. He has taught Swing Trading, Day Trading, Discretionary Trading, and Core (Long-Term) System trading.

Ken is one of the few people I know who has a graduate degree in systems design and a doctorate in management with a dissertation on making decisions under uncertain conditions.  Because of his academic training, military background, and vast market experience, Ken spots trading ideas that most people would never think of. For example, when Ken attended our systems workshop and learned about the complex training game we were playing, he developed a procedure for strategizing about the game that I now teach in that same workshop. He is that good!

Ken is one of our best instructors mainly because he treats his trading and teaching the way he treats his martial arts, his soccer coaching, and life in general: he pursues excellence to the point of mastery. Ken is a thinker, philosopher, tinkerer, and leader. He applies what he learned to everything he does and therefore gets more done each day than anyone I know.

A Note to Ken from a past student:

I struggle to find the right words to express the gratitude I feel for you and what you have shared with me.  You are what I call a "life-changer" — someone who emits high, positive energy, and who is willing to share his expert knowledge and energy for the betterment of those he comes in contact with. Thank you for sharing with me. I believe the right thing for me to do is to pay it forward, and so I am.

I continue to learn and grow in life through trading. I appreciate this trade for what it is and how it makes me feel, and now it is time to prepare for the next one. Follow the rules and enjoy the process — the rest is MATH...I would have never known any of this without reading Van's books, taking your at-home courses, and subscribing to your newsletter for the past 5-6 years. So my deepest thanks to all of you guys for what you are doing. Keep up the great work, and hope all is well with you." — Anonymous

Video Resources

In this series of videos, Ken goes through a list of swing trade candidates and open swing positions. Ken’s review monitors the entries, exits, and trade management over a four-week period in March. Each of the videos is about 15 minutes long, and for those interested in watching the series, it presents a continuous and progressive view of how Ken pursues an adaptive system approach to swing trading.       

Swing portfolio update March 13, 2016 

Swing portfolio update March 20, 2016

Swing portfolio update March 27, 2016 

Swing portfolio update April 3, 2016

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Product Name Adaptive Swing Trading Systems
Workshops By Month April
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Q & A with Ken Long

We have received these questions from clients and would like to share them with you in case you have similar ones:

Q: How many systems will we be learning?

A: You will learn one “framework” with seven patterns which are in effect, seven systems. Also, I will teach three other trading systems. I will also teach some trading strategies – robust ideas with an edge that you could easily turn into fully developed systems.

Q: What is the required capital needed to trade Ken's day trading systems?

A: I recommend a minimum account size of more than $25K for several reasons. You need to be properly capitalized and being able to maintain a $25K account is an indicator of that. You need to allow for the possibility of entries and exits within one day – those will count as a day trade, and with less than $25K in a trading account, you will only be allowed very few of these kinds of trades before the broker takes action. Finally, you may want the ability to take “Day 1” trades – or opportunistic single-day trades based on swing signals.

Q: What kind of capital markets can the systems be traded in?

A: The systems are designed for equity indices, ETFs, futures, and individual stocks, however, there is a growing body of evidence that suggests the systems may be effectively applied to Forex pairs and Forex pairs futures. 

Q: What are the trading hours/time required to trade the systems?

A: The systems do not require active management during open market hours – although that can help improve performance. Pre-set orders can be entered in the evenings or mornings outside of market hours.

Q: In what market types do these systems operate?

A: The RL framework has adaptive parameters that frame decisions and opportunities consistently across all market types. I make that statement given the particular methods I use to describe market conditions, but I believe the statement to be fair given what we mean by market classification.

Q: Is there any special software required to trade these systems?

A: Special software or any software, no. If you want to tinker with the parameters and symbol sets for the systems, you need to know how to use Excel, and you need to subscribe to the Excel add-in XLQ for ease of data retrieval (about $150). Otherwise, none is required. Any full-featured charting package and most brokerage platforms will have the simple indicators we apply to create the framework, which is our particular way of describing market conditions and price action.

 Q: What is the minimum risk required per trade?

A: That depends on some factors — your objectives, your strategies, your beliefs, etc. My beliefs: risk per trade would range from .1% of a portfolio, to not higher than 2% of portfolio per trade. I favor trading at the minimum risk per trade that remains acceptably cost-effective.

Q: What beliefs are required to trade these systems?

A: These are fully articulated in the system's definitions provided in the workshop, and they are exercised daily in our chat room. I have found, however, that it is easier for people to believe they have understood the beliefs rationally than it has been for them actually to put the beliefs into practice. I appreciate this question because I have not ever put that idea into those exact words, but I now recognize just how true and important that insight is

Q: How much trading experience should I have before attending?

A: We require that attendees at this workshop have some swing trading experience and understand the various uses of the market, stop, and limit orders. But the pace of the new quarterly format allows newer traders to keep pace with less experience. 

Q: Is there anything I can do before the workshop to get ready?

A: Yes, students are required to take the Foundation Course before taking Swing Trading Systems, or simultaneously.

Note: If you are new to trading, Ken recommends you take Foundation alone (no technical courses added) during your first quarter.

Q: Is there a refund or cancellation policy?

A:  Customer satisfaction has always been important to the Van Tharp Institute, and we would much rather have an empty classroom seat than an unsatisfied client. Realistically, however, we do not worry about that because Ken Long has always delivered outstanding workshop value. Requests for a refund at one of his workshops have been exceedingly rare. Due to the length of the workshop, we do not offer refunds. But if timing is the issue you can move your registration to another quarter. 

Am I required to take any other course or workshop before this one?

Yes, students are required to take the Foundation Course before taking Swing Trading Systems, or simultaneously.

Note: If you are new to trading, Ken recommends you take Foundation alone (no technical courses added) during your first quarter.