Forex Swing Trading For Beginners
Forex swing trading can be a great way to get high rewards with low risk, but if not executed or understood correctly can make you lose, and lose big. To keep this from happening to you, we will discuss a method of swing trading that can give you the low risk you are looking for with a higher reward than conventional methods. Essentially swing trading watches for corrections in value and takes advantage of them This generally happens for two to five days.
Many traders make the mistake of thinking they can use the swing trade technique daily, but this is not a good idea and you can lose equity quickly. Instead reserve forex swing trading for days when the market is just right for swing trading. So, how do you know when the market is right? Watch for resistance or support that has been held several times like when the chart is high or low. Watch the momentum and look for when prices swing strongly toward either the resistance or the support, while this is happening watch for confirmation that the momentum will turn. This confirmation is critical and if the momentum of the price is starting to wane and a turn is likely, then the odds are in great favor of a swing trading environment.
Use the stochastic indicator as one of the best ways to watch for this. This is a visual indicator. An example of this indicator is when the market starts trending toward resistance; the stochastic lines should point upward. Is the market is swinging down the lines will reflect this. When the lines cross either on the up or down travel, then this is when you take the trade according the when and where the lines cross. When they cross and are pointing up, this usually means to buy. When they cross pointing down, sell. Using a free charting service like is a great way to keep track of this method.
Once the trade you want during the swing is entered, you need a target to anchor it. The Bollinger band can be used for this. When the prices swing back to the middle, this can be target. Set a target and move out quickly. A standard swing can last for two to four trading days and should be taken advantage of when all the signs are present and not used when they are not.