Trading manual part 5: types of trading cont.

Types of trading cont.


Swing trading

Swing trading attempts to capture gains in an asset within an overnight hold to
several weeks. As a swing trader, you prefer the higher time frames to base your
analysis on! Swing trading is an ideal trading style for traders who have limited time
available. It is often used by traders who also have a full time job, but also by
students etc. Forex swing trading attempts to identify medium term trends where
you only enter on high probability trade set-ups. Most swing traders execute no more
than 5 trades a month, when mostly handling a minimum profit target of 150-200
pips. Those traders being places in the category of ”fundamental traders” now and
then; This is because it also takes time for banks and financial institutions to drive the
price to a certain level by using economic data releases.

Time frame analisys

As a swing trader you will start your analyzing the higher time frames as the
monthly, weekly but also the daily chart. Knowledge on
time frames and the accurate usage of it, are both essential key elements in reading a
price chart successfully.

You should always be aware that a trade set up, which has been found on the 2 Hour
timeframe, can be in complete contradiction with the overall daily trend. The risk to
reward ratios, are therefore quite low on swing trades. A trade will need to find its
way to the target you set. It will go from loss to profit and from profit to loss, before
it eventually reaches its target. This is what we call “breathing” in trading. We will
also go more in depth on that later on. On swing trades, it is essential to handle a
strict risk management to become and stay profitable with this trading style



The direction of trend

The direction of the actual trend is vital to trading analysing the market. When
trading the Forex market, you have the possibility to make money, even when the
markets goes down. This is better known as buy and sell orders. We need to be fully
aware of the overall trend before we can even think of opening a position.

The swing trading style is an extremely lucrative and profitable way of trading when
you fully master it. You need to know exactly where you should keep an eye on.
Swing trading will ask a lot of patience, as you will not only need to wait for the
perfect trade set up; You must also wait for the trade to fulfil, what could possibly
take several weeks as the trade goes into consolidation immediately when you’ve
entered it.

Swing trading is one of the most emotional styles of trading. Putting your capital at
risk for multiple days/weeks is something what will attract your emotions trade after
trade. This is why it is essential to fully control them before even thinking about
entering a trade! In the Crypto trading and forex manual we will be basically teaching you the swing
trading style as well as the shorter timeframe style.

As you already know, the Forex market is always moving; Either up, down or
sideways. lt is important to recognise the different market stadiums. Besides that,
you must fully understand them! So, let’s take a quick look at the different trends.

Check out some of our strategies: Bands of bollinger strategy

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