Top Forex Swing Trading Strategies That Every FX Trader Needs to Know

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Top Forex Swing Trading Strategies That Every FX
Trader Needs to Know
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• With any sort of currency trading, whether it is
  Forex or stocks and bonds, a strategy needs to be
  in place to be successful. Rarely will random
  trading without rhyme or reason get you anywhere.
• Forex trading can be followed by numerous trading
  techniques. But what about Forex Swing Trading?
  Looking at swing trading, we can also break down
  what the best swing trading strategy is and if
  swing trading really works.

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• What is Swing Trading?
• First things first, what is swing trading in
  Forex?
• Swing trading is a trading strategy where Forex
  traders make an attempt to be able to make a
  profit by picking both an entry and exit point
  that occurs right before and after a sudden turn
  in the market is made. This is where the swing
  comes into play, the trader takes a medium hold
  on the position as a distinct U shape in the
  chart is formed to show an upward trend beginning
  again. The U is then followed until it will
  take a downward turn.

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• This is all about buying low and selling high!
• Swing trading also uses a few indicators that are
  pretty easy to spot. These include head shoulders
  patterns, flag patterns, cup and handles pattern,
  moving average crossovers, and triangle trading
  patterns.
• Pros of Swing Trading
• Swing trading is riskier than some trading
  techniques but is far from a high-risk situation.
  This means that there is a decent ratio of risk
  to reward with using swing trading as a strategy
  for Forex.

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• This trading strategy also allows for a fair
  amount of trading opportunities. Some trading
  strategies are much more restrictive in terms of
  amounts of times you can pick entry and exit
  points.
• Another advantage here is that swing trading uses
  a fair amount of technical indicators to pull
  off. This means that you have the benefit of
  having technical support with looking at what the
  market is doing and when to make a trade.
• Although a fair amount of time may be needed to
  spot the best time to make a move, swing trading
  does not require you to be forever glued to your
  computer screen. Between technical indicators and
  the overall way the currencies fluctuate, if you
  miss an entry or exit point, another will come.

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• Swing trading also yields an average of 2 profit
  per trade. 2 may not seem like much, but it is
  more than the average day trader.
• Cons of Swing Trading
• Forex swing trading strategies do require a fair
  amount of technical knowledge or at least the
  ability to quickly learn to accurately read
  analytics and charts. You need to be able to spot
  those perfect moments to put a bid in for an
  entry and exit point and to do so with swing
  trading you have to know how to read the
  analytics your trading platform will show you.

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• Using any forex swing trading technique also
  means that you have to be able to invest time not
  just money into your Forex account. Because there
  is a specific point in which you have to enter
  and exit to be able to make a profit, you must be
  able to sit and watch your trading dashboard.
  This often means making manual trades, so being
  able to take the time to spot trends is a must.
  Due to this, keeping an eye on those candlestick
  charts will be your key to success.
• Overnight risk is another drawback to swing
  trading in Forex. As Forex is a 24 hour market
  and you simply cannot watch your charts 24/7
  there is huge potential at missing your optimal
  exit point if you are away.

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• What are Some of the Best Forex Swing Trading
  Strategies?
• There are a couple of different Forex swing
  trading strategies, so it really comes down to
  which type of trader you are to best decide what
  the best swing trading strategy is. No matter the
  chosen strategy, they tend to either follow
  trends or trade counter to the trend.
• Trend Trading
• Trend trading is often considered the best swing
  trading strategy for Forex. With this type of
  trading, the trend to spot is being able to
  clearly see prices going up and down more like
  steps rather than in a more linear fashion.

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• This technique also looks to take advantage of
  bullish trend lines. This means looking for those
  perfect points in which the market turns from a
  low and begins and an overall upward trend in
  growth. The biggest tell-tale sign that this
  trend has begun is that the lowest lows of each
  candlestick are beginning to fall higher and
  higher in value.
• Profits often outweigh losses with this swing
  trading technique, so of the main five swing
  trading techniques it is the safest.

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• Counter-Trend Trading
• Counter-trend trading is the exact opposite of
  the first strategy we mentioned. This being that
  for this technique, you try to spot the trends
  turning bearish and turning downward or breaking
  down rather than going upwards.
• This forex trading strategy is a bit more
  difficult than its counterpart because it
  requires you to have greater discipline and it is
  much easier to miss the proper signal and miss
  either your entry or exit point to be able to
  make a profit.

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• Moving Average Strategy
• Moving average strategy is a Forex swing trading
  strategy that involves looking at average time
  periods and making moves within that. This
  technique does take a bit more skill to pull off
  as Forex is a 24-hour market 5 days out of the
  week, so you need to have a distinct strategy to
  implement this type of swing trade.
• 20/21 Period this is often the most popular type
  of moving average strategy. Movements in this
  type of period often are more accurate in showing
  a distinct trend line.
• 50 Period this is considered the industry
  standard as it is one of the most popular uses
  amongst traders. This is often considered a happy
  medium between long or short term trends.

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• 100 Period this is another strategy favoured by
  Forex traders as it often uses round numbers.
  This matches up well for those that swing trade
  from weekly or monthly holds.
• 200/250 Period This is a period strategy that
  works best for those that make daily holds rather
  than longer-term holds. This is because it
  displays a year of price actions so any distinct
  cycles can be displayed better.

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• Bollinger Band Strategy
• Bollinger band strategy is when you end up using
  three different indicators to find an overall
  turning point at when to make a trade. These
  three turning points create averages in a way
  similar to moving averages. For those that live
  heavily in the world of analytics, this can be
  looked at like a standard deviation measurement.
• If a price point is above the band it is
  overbought and if it is below the band it is then
  oversold. This strategy, like the others, is all
  about finding that perfect sweet spot between
  buying and selling and timing it just right to be
  able to make a profit.

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• Decisions are made all in how those points move
  up or down the bands, so this strategy does take
  a bit more skill and strategy to be able to use
  successfully compared to some of the other Forex
  swing trading techniques.
• A Versatile Strategy
• A versatile strategy is also considered a
  beginner strategy and fairly easy to implement
  into the overall tool kit of whatever techniques
  you aim to use, but it definitely takes a deeper
  dive into swing trading than some of the other
  swing trading techniques.
• This type of trading strategy means you will use
  a combination of the above swing trading examples
  plus possible others to cater your trades day by
  day to fit what the market is doing to be able to
  take full advantage of currency movements.

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• This means you have minimal commitment to which
  type of swing trade to use all the time and you
  get to experiment with the best buy and hold
  strategy.
• Is Swing Trading Beginner Friendly?
• Forex swing trading techniques are often
  classified as friendly for beginners or those
  with a medium amount of trading experience. In
  addition to being beginner-friendly, it is also
  friendly for those that have a semi-busier life
  outside of Forex. This means those that work
  during that day or are doing other activities
  just need to be able to have enough time to
  invest to be able to keep up with the market and
  be able to hold onto their position long enough
  to make a proper exit.

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• Although you will have to have the time to find
  the perfect entry and exit points, the medium
  hold time that usually ends up being a spread of
  a few days to a couple of weeks allows for
  beginner traders to take the time to watch the
  market and the trends.
• With the right overall strategy, swing trading is
  fairly easy to both learn and implement in an
  investment portfolio.

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