Swing Trading


Forex swing trading is one of the most popular trading styles around, and for good reason. It allows for a less stressful trading environment while still producing incredible returns. It’s also great if you have a day job or school to attend.

Although being different to day trading, reviews and results suggest swing trading may be a nifty system for beginners to start with. Used correctly it can help you identify trend signals as well as entry and exit points much faster than a simple moving average can. Read More Get the Term of the Day in your inbox! In my experience, the daily time frame provides the best signals.

What is a ‘swing point’ in the market?

Definition. Traders who can react quickly to market changes, including at-home and day traders, benefit from swing trading, which is a trade strategy that involves holding a position for longer than a day.

I have held several positions for over a month. Longer-term trades such as this require patience. It may take several days, weeks, and sometimes months before you know if your analysis was correct. That said, trailing your stop loss to lock in some profit along the way does help to relieve most of that pressure. Drawdown is something all traders have to deal with regardless of how they approach the markets. However, drawdown can last longer for a swing trader. It allows for a less stressful trading environment while still producing incredible returns.

Having accurate levels is perhaps the most important factor. In my experience, the daily time frame provides the best signals.

Check with your broker to be sure. The best way to remove emotions from trading and ensure a rational approach to the markets is to identify exit points in advance.

Above all, stay patient. Remember that it only takes one good swing trade each month to make considerable returns. It contains the 6-step process I use. Hi Roy, it is by far the best approach for a less stressful trading experience. Just my opinion, of course. Good way of teaching. I would like to make an investment with you if you would like to do it for both of our benefits ensuring slow and steady profits.

Another helpful article and more confirmation that I am in the right place with Daily Price Action. Swing trading very much fits around my lifestyle, although this week was the first week I had held a trade for more than a day, which had me checking my charts more often than is healthy!

I much prefer the pace of swing trading the daily charts and the time you get to analyse trades before pulling the trigger. Great to hear, Dan. The extra time to evaluate setups along with market conditions is one of my favorite aspects of swing trading. Hi Justin, you are there at it again, what a wonderful expository post.

I will start the practice right away because it suits my personality. Thank you Justin for your wonderful clear and concise presentation on swing trading. Not only did I think it was an easy read: Feel free to reach out with any questions as you transition back to the trading lifestyle.

Less if the option has just a week left. Get a slightly out of the money strike. Thanks Justin for information. You just make trading simpler for me. I value your input. I always try to keep things simple. Thank you for all your patient teachings. Thanks Justin for this free forex education i am better now and i can see the progress, All i need is to join the community.

I used to think swing trading and day trading is one and the same thing,now I know on which side I belong,thanks Jb. Hi Justin I have been missing out on profits with my trades by not identifying a target. I have gone trough your Forex Swing Trading lessons which has cleared my mind but what I would like to know is whether I should move my stop to the resistance or support area when the price has moved beyond Kind Regards Andre.

Since I have been using price action which you showed me my trading has become more stable less losses. It improves my confidence in daily price action trading which consist swing trading. This is great and awesome work Justin.. Thank you very much for this.. February am officially adopting this trading style and its highly profitable.. Thanks once again Justin. Be it advice, books to read or anything that can help me move forward. When you say l go to daily frame, all l know there is that the action is shown by one candle or a bar.

Justin, you always explain these forex concepts with great clarity. Thanks for sharing your knowledge! As a swing trader can Fibonacci be used to identify the reversals? If yes how do you know when to use Fibonacci and how it works? I work a very small real account but I hope to increase it in the future. Thank you for the valuable information you share, see you.

I apologize for the English but I use google translator. Hi Thanks for the content. I just wanted to ask, in your opinion, is it wise to focus on a few pairs or should i scan as many pairs as possible for set ups? I like holding trade for some time and with this content, I no it will help me become a better trader and swing trader. Bennett i there a way to upload a picture here please……!?

Please may i ask if it will be good using the zigzag indicator on meta trader platform to get the swing high and low. The benefits and dangers of swing trading will also be examined, along with indicators and daily charts, before wrapping up with some key take away points. The straightforward definition of swing trading for beginners is that users seek to capture gains by holding an instrument anywhere from overnight to several weeks.

As training guides highlight, the objective is to capitalise on a greater price shift than is possible in an intraday time frame.

But because you follow a larger price range and shift, you need calculated position sizing so you can decrease downside risk. To do this, individuals call on technical analysis to identify instruments with short-term price momentum. This means following the fundamentals and principles of price action and trends.

Swing trading setups and methods are usually undertaken by individuals rather than big institutions. This is because large enterprises usually trade in sizes too great to enter and exit securities swiftly.

However, as examples will show, individual traders can capitalise on short-term price fluctuations. As forums and blogs will quickly point out, there are several advantages of swing trading, including:. Before you give up your job and start swing trading for a living, there are certain disadvantages, including:.

These are by no means the set rules of swing trading. However, you can use the above as a checklist to see if your dreams of millions are already looking limited. The main difference is the holding time of a position. Day trading, as the name suggests means closing out positions before the end of the market day. However, as chart patterns will show when you swing trade you take on the risk of overnight gaps emerging up or down against your position.

As a result, when swing trading, you often take a smaller position size than if you were day trading, as intraday traders frequently utilise leverage to take larger position sizes. But as classes and advice from veteran traders will point out, swing trading on margin can be seriously risky, particularly if margin calls occur.

So while day traders will look at 4 hourly and daily charts, the swing trader will be more concerned with multi-day charts and candlestick patterns. In fact, some of the most popular include:. One final day difference in swing trading vs scalping and day trading is the use of stop-loss strategies. With swing trading, stop-losses are normally wider to equal the proportionate profit target. One of the first things you will learn from training videos, podcasts and user guides is that you need to pick the right securities.

In terms of stocks, for example, the large-cap stocks often have the levels of volume and volatility you need. But this description of swing trading is a simplification. In reality, swing trading sits in the middle of the continuum between day trading to trend trading. What Type of Trader Are You?

The first key to successful swing trading is picking the right stocks. The best candidates are large-cap stocks , which are among the most actively traded stocks on the major exchanges. In an active market, these stocks will swing between broadly defined high and low extremes, and the swing trader will ride the wave in one direction for a couple of days or weeks only to switch to the opposite side of the trade when the stock reverses direction.

A couple of months might pass with major stocks and indexes roughly at the same place as their original levels, but the swing trader has had many opportunities to catch the short-term movements up and down sometimes within a channel.

Of course, the problem with both swing trading and long-term trend trading is that success is based on correctly identifying what type of market is currently being experienced. Trend trading would have been the ideal strategy for the bull market of the last half of the s, while swing trading probably would have been best for and Bullish and bearish crossover patterns signal price points where you should enter and exit stocks.