Swing Trading - An Unnoticed Potent Strategy
Even with plenty of new trading strategies that have been devised in the forex trading world, swing trading is still have many users that implement it on regular basis to get steady winning trades every single day; but apparently, this strategy is much less popular among inexperienced traders who strive for instant profits.
Swing trading is a method where the trader is placing buy or sell order close to the end of an up or down price swing that happened due to the market volatility in a given time. This position can last for a couple of days or just one day; depend on the market movement and the targeted profits. It is a strategy that executed based on technical analysis, so you don’t really have to understand about world economic or such; read more about technical analysis at forex trading strategies.
With this particular strategy, there are some important points to consider:
1. Support and Resistance
Don’t rush when you’re trying to identify support and resistance level, do a couple of tests just to be sure.
2. Using the Data
Even between swing traders, there are lots of methods used to define entry and exit point; these are some of them:
* Targeting the time when the currency turn away from support or resistance, then place the order after make sure that the movement is price momentum.
* Identify a certain pivot point in the chart, mark it as “pivot line”, then if the price manage to break the line, execute buy/sell based on whether it is an uptrend or downtrend.
* Using Fibonacci extension tool or just look for nearby pivot point to look exit point from the market.
3. Indicators and their Functions
* Stochastic and RSI (Relative Strength Index) to distinguish momentum.
* Fibonacci, pivot points, and fractal measurements to spot entry point.
* MACD (Moving Average Converge Divergence) as additional tool for confirmation.
4. Taking Profit
How much profit to aim should be adjusted with the current market condition. Should the market is trending or volatile, you have to get in, get as much as you can get (within safe period), and get out fast. This is important because as the market keeps moving, there’s high chance that you’ll get a reversal. You’ll need forex trading platforms that can executing order quickly for this.
The other scenario: the market is relatively calm and not going in any particular direction; in this condition, you should switch to longer term swing trade that last for more than three days. Of course, your target profit will be a lot bigger with this method.
Quite a few novice traders choose short term strategies since they want easy and quick profits, but here’s the hard fact: it is very difficult to make numerous small trades and maintain decent winning rate. Preferably, if you’re just started trading forex, you must go with swing trading because it offer simple analysis and fairly safe approach to earn steady profits. Learn more about a course on how to use swing trading strategy to aim large profits at forex wealth builder review.
