Basic Of Swing Trading In Forex

Best Currency for Swing Trading

Swing trading in Currency is a Short to long term trading style that requires patience to hold your trades for several hrs to days at a time.
Swing Trading ideal for those who want to trade but can’t monitor charts throughout the days. Swing trading call can be generate by giving few hours of day during market hours or after market hours.
This is probably best suited for those who have full-time jobs or school but have enough free time to stay up-to-date with what is going on in the global economies.

Swing Trading in Currency

Trading in Currency?Currency is best instrument for Swing trading. As both side goal keeper is Government. Currency mostly stable instrument.
EUR ,USD, JPY, AUD, CHF, GBP make best pairs for Swing Trading as per our opinion.
Swing trading attempts to identify “swings” within a medium-term trend and enter only when there seems to be a high probability of winning.

     

Because trades last much longer than one day, larger stop losses are required to weather volatility, and a forex trader must adapt that to their money management plan.
It is important that you are able to remain calm during these times and trust in your analysis.
Since trades usually have larger targets, spreads won’t have as much of an impact on your overall profits.
As a result, trading pairs with larger spreads and lower liquidity is acceptable.

Finding the right Swing strategy is tough.
Considering the thousands of trading strategies in the world, the answers to these questions are hidding in chart pattern Analysis
Where do you start? How do you know when you’ve found the right one?
By the time you finish, you will know exactly what swing trading is and whether it’s right for you. I will also share a simple 6-step process that will have you profiting from market swings in no time.
As traders, it’s our job to time our entries in a way that catches the majority of each swing body.
While catching a swing point can be incredibly lucrative, it isn’t absolutely necessary.

Step 1: Select Time Frame – Hourly / Day.

Mostly traders prefer Hourly chart for Swing Trading in Currency with Final judge by Day chart. They offer a bigger picture of what’s happening with the price action and provide more reliable signals.
However, Daily chart may be lagging alone so best trade when swing call generate in Hourly chart with Daily chart considering.
My suggestion is to start with the daily time frame. Once you become profitable at swing trading with the daily, feel free to move to the hourly time frame.
As a general rule, price action signals become more reliable as you move from the lower time frames to higher ones.

Step 2: Draw Major levels on chart – Support & Resistance

After 1^st Step, its most importance step to find right trade to ride.
Support – LOWER LOW of last few candles is majorly support
Resistance – Higher High of last few candles is majorly Resistance
drawing key support and resistance levels as building the foundation for your house.
These are the most basic levels you want on your charts. They provide a great foundation for trading swings in the market and offer some of the best target areas.
Draw Trend Lines or Nack Line. Not all technical traders use trend lines. If I’m being honest, I have no idea why someone would ignore them, especially a swing trader.
Trend Lines use as a signal creator in Swing trading. Once Trendline or Nack line crossed by Price its time to be ready

Step 3: Evaluate Other Factor – Volume

Till now you set your time frame , understand which are your support and resistance now time to understand Volume factor.
At this point, you should be on the daily time frame and have all relevant support and resistance areas marked.
Well, this is where those swing highs and lows come in handy.
There are three types of market momentum or lack thereof.

1. Uptrend: Higher highs and higher lows
2. Downtrend: Lower highs and lower lows
3. Range: Sideways movement

Once you identify that Market on uptrend is carving higher highs and higher lows. Then next step Check Volume factor – are they supported this breakout – if volume is higher then last few candles then its will be good breakout.
Notice how each swing point is higher than the last with volume.
On the opposite end of the spectrum we have a downtrend. In this case, the market is carving lower highs and lower lows with higher volume of last 10 candles its indicate that market start downtrend. You want to be a seller here.
Rangebound market always give pain to all trader. how to find avoid Rangebound market will discuss on it in next Blog. Keep remind me if I forget to write
In fact, ranges such as the one above can often produce some of the best trades. This is mostly due to the way that support and resistance levels stand out from the surrounding price action.

Step 4: Watch for Price Action Signals

Let’s review where you should be at this point.
Steps 1 and 2 showed you time frame and Levels using the daily time frame.
Then in Step 3, you learned to about volume importance. This tells you whether the market is in an uptrend, a downtrend or range-bound.
You might not catch the entire swing, and that’s okay. The idea is to catch as much of it as possible ,but waiting for confirming price action is crucial. Watch Closing Price of Candle if its nearly around last candle close or low then wait for next candle still Price moment not start. It may be time to wait and watch till Big Fishes eat their foods and you rid on dolphin
So remember to  Volume as well as Price Action Required before Enter into swing trade opportunities

Step 5: Plan your Exit Points

There are two rules when it comes to identifying exit points.

• Profit Target
• Stop loss Level

Many traders make the mistake of only Put a target and forget about their stop loss.
Don’t make that mistake.Money Management is key you can read about it here
Remember that the goal is to catch the majority of the swing. We don’t need to catch the entire move to make a profit.