Swing is the absolute best swing trading strategy or style when it comes to currency trading or any other kind of market. Traders have a wide variety of different strategies available to trade markets with but none come close to offering the same kind of high rewards with minimal risk that swing trading does. This doesn’t mean that swing trading is a fool proof style of trading, but what it does mean is that a trader is giving themselves the absolute best odds of pulling the trigger on a winning trade each time a trade is placed. If you would like to try your hand at swing trading then there are two important factors that must consider before deciding which market to trade and how to swing trade it.
Two Tips For Anyone Looking to Try Out Swing Trading
The first thing any swing trader must do is ensure that the market or instrument they want to trade shows a higher tendency to trend than not trend. What does this mean exactly? Since this style of swing trading strategy takes chunks out of market swings, the best markets to use with this style are ones that trend in much more natural and smooth ways. Not all markets behave the same way and you will find that some seem to never trend and others are too erratic and jump around all over the place.
The easiest way to check if an instrument trends well or not is to open up a four hour to daily chart and take a look at the past several months of price action. If you notice price moving up and down in a seemingly fluid manner with visible swings in price action, then there is a good chance that you could swing trade this market. If you notice that price haphazardly jumps around or goes sideways with no visible market swings, then you’d be best off skipping this market and looking for a more suitable one.
Swing Trading Strategies Ideal
The final factor is that of trading with the trend. Swing trading strategy are trend followers by their very nature and this is something that many new traders are not comfortable with. One of the main reasons for carrying out the previous trend check on the instrument you want to trade is because not only does swing trading require price to makes swings up and down but traders of this trading style are mainly considered trend followers.
You stand to make much more in the long run by going with the trend and not against it. It sounds simple and it is something that all traders are aware of but you may be amazed at just how many are unable to follow this simple rule.