The Forex market is one of the most exciting markets in the world. It changes every minute and is full of highs, lows, and surprises. One type of forex trading strategies that seems to have been successful over the past few years has been Swing Trading.
In this article we will discuss what Swing Trading is and how it differs from some other types of Forex trading you may be familiar with.
Introduction to Swing Trading
Many traders start out in the Forex market by day trading or scalping, but as they become more experienced they often find that these types of trades are not as lucrative for them.
Swing trading is a great way to bridge the gap between day trading and scalping because it doesn’t rely on daily fluctuations like some other methods do. In this post we will discuss how swing trading works and give you some tips on how to get started!
What is Forex Swing Trading?
Forex swing trading is a type of Forex trade that involves holding onto positions for days at a time. Swing traders are primarily looking to take bigger risks over longer periods of time, and this means they also have the potential to earn more than with other types of trades such as day trading or scalping.
In order to be successful in this kind of trade, it’s important to make sure you have an understanding of what could drive prices up or down and how your currency pairs react when these events occur.
Swing Trading vs Day-Trading
The main difference between swing trading and day-trading is that while both involve taking long term positions on currencies, swing traders tend to hold their position for three days in the very least. Day traders, on the other hand, are constantly buying and selling currencies with a risk tolerance that is much lower than swing trading.
Risk Reward Ratio
As we mentioned before, one of the benefits of swing trading over some methods is that it has less risk associated with it because most swings last three days or more; however this also means there’s not as big a potential reward either.
What Indicators do Swing Traders Use?
There are some indicators that are quite accurate for swing trading. These include the:
Swing traders primarily use EMA’s and Fibonacci Retracements because they work well for them – 100 to 650 pips per swing trade is not unheard of when done correctly; the potential with this type of Forex strategy is limitless!
- -RSI (14): What is a good RSI for swing trading? A good RSI is between 20-30%
- MACD: MACD Lines will be effective so long as you don’t have to buy stocks or index futures. The problem with these is that they are mainly for day traders and scalpers who trade on a more frequent basis than swing traders .A cross of the fast and slow lines (MACD Lines) can signal a change in momentum. The best time for your trade to go long or short would be when there’s an upward crossover
- Bollinger Bands®: These bands consist of two channels, typically set one standard deviation away from each other. When prices move closer together on both sides of the channel, it indicates that volatility is decreasing
- CCI (19) and MACD Lines are momentum indicators, so it would be difficult to find an indicator which suits both types of trading but there are some worth mentioning such as Bollinger Bands(24), EMA’s(29), and Fibonacci Retracements.(30). Swing traders mainly use the mentioned indicators because they work well for them.
How many pips can you gain from swing trading?
100-650 pips. That’s what most swing traders are looking to gain from a single trade. The potential of swing trading is unlimited.
How many pips does a typical trader gain from holding forex positions? The answer really depends on how long you hold your position for–the longer the better since every pip counts! But with that said, we have seen people make anywhere between 100 – 650 pips in just one trade if they bought at the right time and sold at the perfect moment.
Can you start swing trading with $1000?
Yes, you can.
With swing trading, it’s possible to start forex day trading with as little as $1000 or less depending on your account size. You have nothing to lose but everything to gain!
Who is the best swing trader?
There is no one best swing trader.
Best Resources to Learn Swing Trading
Swing Trading: A Beginner’s Guide to the Forex Market by Penny Lee Review – If you are looking for a guide that tells you how to start trading in forex, this book can be very helpful. Though it does not offer any specific methods of day or swing trading, it explains what kind of traders should use which method and why these techniques work. The author also discusses some other factors involved with starting out as a beginner such as risk management, money management and differentiating between trades based on your own personality type among others.
Some other incredible books for swing traders are:
– Forex for Beginners by John T. James Review – This book is a great choice for those who are new to the world of trading in forex and want to understand it better. The first few chapters go over some important concepts including the basics, how currencies work together and how traders can make money through different types of trades like day or swing trading among others.
– Swing Trading Strategy Guide How To Take Profits In Any Market Condition And Why You Should Be Doing It! By Michael Dolce Review – If you have been looking for an all encompassing guide on swing trading that will teach you everything from what this type of trade entails to techniques that one should use when considering starting out as a newbie then this might be the best book for you.
– Swing Trading For Beginners: What Is Swing Trading? How To Trade The Forex Market And Make Money By Holding Your Positions Longer! – If you are looking for the most comprehensive guide to swing trading then this is one of the best books out there that will teach you everything from what it means and how to trade.
There are a number of other books out there that can teach you about swing trading, but if you are looking for the most all encompassing guide to this type of trade then these two might be some of the best choices available.