Four Important Factors To Consider In Swing Trading

Even with so many variation in forex trading strategies, many professional traders are still using swing trading to earn steady profits from the forex market; on the opposite, novice traders who usually longed for quick profits are not really interested in using this strategy.

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.

With this method, there are a few important things 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 many methods used to define entry and exit point; these are some of them:

* Aiming for the time when the currency turn away from support or resistance, then place the order after make sure that the movement is price momentum.
* Wait for the price to break through the "pivot line", identify it as uptrend/downtrend, then buy/sell accordingly.
* Using Fibonacci extension tool or just look for nearby pivot point to look exit point from the market.


3. Methods and Indicators

* Stochastic and RSI (Relative Strength Index) to identify momentum.
* Fibonacci, pivot points, and fractal measurements to identify entry point.
* MACD (Moving Average Converge Divergence) as additional tool for confirmation.


4. How much Profit?
This is highly depending on the market condition when you use the method. If the market is trending or volatile, you need to get in, grab as much as you can get (within safe period), and get out quickly. This is important since as the market keeps moving, there is high chance that you'll get a reversal.

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.

Most new traders prefer short term trading strategies due to their lust in fast profit or their low deposit, but in reality it is very hard to make many small trades during the day and keep winning. Instead, if you're just started trading forex, you should go with swing trading since it offer simple analysis and relatively safe way to earn steady profits.

Learn more about a simple course that utilize swing trading method to aim huge profits in Forex Wealth Builder review. Claim your free forex 6 days trading lessons at forex trading course.