Forex Trading for Beginners: The Scope on Forex Swing Trading

Not only is forex trading popular, but it is also one of the largest, most liquid, and available around the clock under a decentralized system, making it one of the most sought-after trades. This attracts all sorts of traders from newbies, pros, small and even big traders.

Forex trading, along with its perks and also comes with its cons, one being its volatile nature. Although this does attract all sorts of traders, it’s usually taken on by more experienced traders. But don’t be discouraged! Because any trader can take on forex trading, all you need is a good strategy.

In this trade, there are all kinds of strategies you can use and whatever kind of trading style you prefer, there’s always going to be a strategy for it! The most common forex strategies are day trading, scalping, swing trading and position trading.

If you prefer trades that look to profit from oscillations that happen within a wider market movement, then you should try out swing trading. This is somewhat similar to day trading but what sets them apart is that swing trading takes around days or even weeks.

And if you’re someone who likes quick trades at the same time take your time while trading, swing trading is perfect for you. To know more about this strategy, check out everything there is to know about it down below!

What is swing trading?

Swing trading is a kind of trading strategy where a trader aims to make a profit from oscillations that occur in a wider market movement. Trading with this strategy can take around days and even weeks, depending on your speculations.

This is commonly compared to day trading since they have the same objective but unlike swing trading, day trading only takes a day to trade. This means a trader opens and closes trades within a day.

Most swing traders need to be knowledgeable about trading forex trading indicators and use technical analysis when coming up with speculation. Since this trade seeks to profit from a short portion of a longer trend in a specific market.

The majority of assets have significant price activity against the prevailing trend, even during large bullish or bearish swings. Swing traders try to profit from that price movement.

Keep in mind that, as a swing trader, you are not considering a pair’s long-term worth, but rather if it has the potential to see a significant price change in the near term.

How do you find opportunities as a swing trader?

Swing traders find opportunities using technical indicators to help them decide when to open and exit a trade. One of the most common indicators swing traders use is RSI which is short for Relative Strength Index.

An RSI analyzes the pace and variance of price changes. Its measurement fluctuations between zero and one hundred. When the RSI rises over 70 and falls below 30, it is common knowledge that the market is overbought.

Can you get rich by swing trading?

Yes, you definitely can! But only for as long as you play your cards right which means, (1) work with a reliable trading platform, (2) have a hefty knowledge in forex trading (3) stick to your strategies, (4) know how to efficiently speculate the market and (5) stay focused and attentive.

For as long as you have all 5, you can be one of the swing traders who get an annual return of a whopping 30% in forex trading!

Why do most swing traders fail?

Failure is always a certainty in trading, whether it be in forex or any other market. But lack of attention and commitment is the main reason why 90% of swing traders fail in forex trading. As mentioned above, one of the key elements to becoming a successful swing trader is by staying focused and attentive.

How many pips is a swing trader?

Since this is a medium-term trading strategy, the potential profit of a swing trader can range from around 50 pips to 150 pips, depending on the currency pair.

So if you want to earn more, consider working with great currency pairs for this strategy. To help you out, down below is a list:

What currency pairs are best for swing trading?

For this trading strategy, there are 6 ideal currency pairs to use for trade such as:

• EUR/JPY – This pair is known for its high liquidity.
• EUR/USD – This pair is known to be the largest and most stable currency on the list.
• USD/CAD – This pair is known to be a commodity pairing since it’s often connected with Canada’s oil market.
• NZD/USD – This pair is also known to be a commodity pairing since it’s often connected to the New Zealand export market.
• EUR/CHF – This pair is known for having low volatility which is ideal for medium to long-term trades.
• AUD/USD – This pair is known to be a commodity pairing since it’s often connected to precious metals and other major exports from Australia.

What indicators are best for swing trading?

There are 5 ideal trading indicators that are best used for swing trading. Each has its own function and objective. So to amp up your swing trading game, down below is the list of the 5 indicators:

• Moving average – this determines the average price movement of a market over a specific time frame. They eliminate any inconsistent short-term surges by doing this.
• Volume – It gives information on how strong a new trend is. It follows a simple rule that a trend with high volume will outperform a trend with low volume.
• Relative strength index (RSI) – The rate and variation of price fluctuations are examined using RSI. Its measurement ranges from zero to one hundred.
• Stochastic Oscillator – This is similar to the RSI in terms of momentum indicator. It evaluates a market’s closing price in relation to the range of its prices over a predetermined time period.
• Ease of movement – This gives you a deeper look at volume by demonstrating how it links to price movement. Using EOM, you can determine if market behaviour is being influenced by a disproportionately small number of deals.

Takeaway

Now that you are well-informed on swing trading, you can determine whether or not you want to use it as a forex trading strategy. Swing trading is not for everyone but if it happens to be something you’d think you’d excel in, this strategy can be very profitable.

Don’t forget all the key details about swing trading such as what it is, how it works and more. So use your newfound knowledge and go ahead and see if swing trading is the strategy for you!