Swing trading is a type of trading lasting from 1 to 4 days and only rarely to a week. Not all types of forex markets are suitable for the use of this strategy, thus you need to be rather careful if you have plans not to lose while trading. Another choice that should be made is the currency you are going to exchange.
This strategy, which is also known as “hit and run”, is well fitting for those traders who are moving the direction of major trend. This means that in contrast against the flow of the trend, which is typical of short-term trading, this strategy evolves a short-term investigation of the market to choose the best currency to make the investment.
The best time to start swing trading is when you see that a specific currency price grows and has a potential of continuous growth for your specific trading time. The strategy is being developed based on trend lines, indicator confirmation or even resistance level. The most common ones to use are stochastic and Relative Strength Index indicators.
The best option is to analyze the market not with a single tool, but rather within a few tools at once. If you’re not familiar with the analyzing tools, your forex broker will be helpful here.
As long as you’re done with the choices of the currency, make sure to catch up with the right timing. Do not be worried if you will lose some profit for not being in time, but it’s crucial to make sure you don’t stay too long with the currency so that it starts going backwards. In this case you will be able to get at least 60-70 % of the potential profit that has the currency itself.
And as always, there’s a list of rules that do work ideally with swing trading. Always try to work with not cash money, but instead with the liquid money. Try to look for a reliable broker, which will be sufficient to give advice based on reliable analysis. And finally look for the trading options which have 2-3 pips at most, so that it will not influence your trading profits.
