Forex Swing Trading Strategies For Part Time Traders
If you spend some time online I’m sure you come across ads inviting you to join worldwide market of currency trading. Since you are reading this article I can assume that you are either thinking about or already have started you trading career in Forex. Many people after initial slap of loosing their money on the market start the search for the perfect system or strategy that could help them win all the time. Unfortunately such system does not exist.
I’ve been trading currencies in Forex part time for a few years by now. I was also looking for a perfect strategy in the beginning of my trading career. I was jumping from scalping on 5-minute charts to day trading on 15-minute charts to trading the economic news. You name it. From that experience I realized two important things. First is that there is no such thing as a perfect system that will make profit constantly. Any system will loose from time to time. Second the most important thing in my experience was that my results were better for the longer term trades. That’s why I started using swing trading systems almost exclusively.
Swing trading strategies that can last a few days have two major advantages over the day trading strategies. The first one it requires much less time to set up and monitor your trades. The second advantage is it almost completely eliminates emotional charge from the trading. At least that was my experience. Once trade is in place it can be left alone to mature. When you come back the next day it may be still evolving, it may already hit the take profit or it has been stopped out.
Either way you don’t feel the agony when price goes against your trade, nor you feel overexcited when the price goes in favor of your trade. Holding on to such strong emotions during the day trading can easily drain your energy. And that’s one of the major reasons why people start making wrong trading decisions. It is much easier to control your emotions when you swing trade. Since you don’t have to babysit your trades.
You may want to know the rules of my swing trading strategy. I can share with you one of my strategy. But remember it is not the system that matter it is your belief system and mindset can make or break your journey to become a successful trader. For one of my systems I use Heikin-Ashi candles and support and resistance levels. In my opinion if you master support and resistance you will sooner or later make a living of your trading. This concept is that powerful.
So I apply Heikin-Ashi candle to a daily chart and look for the strong support and resistance levels. It is much easier to do on a daily chart than on any shorter-term charts since the noise level is very low. Now I look for Heikin-Ashi change color and look if price is bouncing off the support or resistance levels. If those conditions are met I enter the trade.
You can fine-tune you entry by going to the lower time frames. Set the stop loss order on the other side of support/resistance level. I usually look for the next support/resistance levels to set the take-profit order. But taking profit from a trade actually is an art not a science. Thus you decide what price level would be the best for you to take profit.
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The article is usefull for me. I’ll be coming back to your blog.
I completely agree with this assessment. Swing trading is by far the best way to play the markets, but you have to be well versed in your technical indicators as well as your economic fundamentals. I read a quote the other day that said, technicals will be right about 60% of the time, but fundamentals will be right 100% of the time. And if you combine your technicals with your fundamentals and add in good risk management rules, then you will become an excellent swing trader.
Well said. A good trader is one who applies fundamentals along the technical analysis. However I don’t know about being right 100% of the time. If they can accomplish that, good for them.