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| Forex Swing Trading - 3 Simple Steps To Big Long Term Gains |
By:
Kelly Price |
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Forex swing trading aims to take profits from movements within the major trends and the good news is - it's easy to learn, easy to apply, fun and can be very profitable and perfect for novice traders.
Here we are going to show you how to swing trade successfully in 3 simple steps.
Swing trading by its very nature is easier than long term trend following and is perfect for the novice trader.
For the impatient trader you get a lot of trades and you get to know whether your right or wrong quickly, so it's a lot easier to stay disciplined.
Its fast and its fun, so lets look at how to make profits forex swing trading.
Step 1 - Spot Support and Resistance
You need to use good old trend lines and see areas of support or resistance to trade into and look for at least 3 tests.
Now you have spotted the opportunity, you need to time your entry and correct timing is crucial!
Step 2 - Trade With Price Momentum
Many traders simply like to go short into resistance or long into support as its tested but this is a huge mistake!
You are guessing or relying on hope and the market will not reward you for this - it will kill your equity and wipe you out.
You need to get the odds in your favour and trade with confirmation of price momentum on your side.
You need to wait for a test and then see the market to turn away from support or resistance and THEN trade.
You are trading with price momentum and this will ensure the odds are in your favour.
What indicators should you use?
Try these two: The stochastic and the RSI When you get both in synch and then execute your trading signal.
We don't have enough time to explain them in detail here - simply check our other articles.
Once you are in the trend and its moving, its time to look to take profits.
3. Step 3 Take Profits To Soon
In forex swing trading your profits can disappear quickly, so take your profits early.
This is BEFORE they test the next level of support and resistance - this will enable you to bank a profit in quickly, before the odds turn against you.
Sure, the trade could run on a bit, but chances are if it comes back quickly you will soon be in a loss - so keep the odds on your side by banking early.
Other points
When swing trading place your stop as soon as you enter your trade on stop close basis behind support or resistance and only trade liquid currencies such as:
Euro, British Pound, Japanese Yen, Swiss Franc and Canadian dollar - don't try it in minor currencies.
A Simple Way To Make Big Profits!
You can use other tools to trade but we have found that trend lines combined with stochastics and the Relative Strength Index, are all you need to have a simple, robust trading method that's:
Fun, can give plenty of action, put the odds in your favour and make big profits longer term.
About the author:
GRAB 3 X FREE TRADER PDF'S, NEWSLETTERS AND MUCH MORE! On all aspects of becoming a profitable trader including features, downloads and some critical FREE Trader PDF's and more FREE F orex Education visit our website at http://www.net-planet .org/index.html
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