Swing trading includes forex swing trading strategies. In this article you will learn how to choose them. The main point here is to trade, when the price gives a small, reverse pullback after a swift move. This approach makes it possible to enter the very beginning of a new movement and reduces the risks associated with false price fluctuations. Read more about how such tactics work.
Stock operations are a dangerous activity for your capital, until you download forex swing trading strategies pdf and study this info. So resolve two main issues:
- how to enter the market, with the least risk for your money;
- how to make an exit on time with the best result.
The strategy of entering is an important component in swing tactics. This is the time when you risk part of your trading capital. We figured out that we are looking for stocks that gave a pullback to the active zone of the trader. To open a position, we need to know the moment when the price turns in the direction of the main trend. Then we will open the deal at the very bottom.
The exit strategy consists of two aspects:
- When to close a position, in case the price moved against you, and fix the loss?
- When to leave the market, if you have noticed the stock had come to your side, and fix profits?
There are two major issues, which will constitute your exit strategy. Before you open a position, decide where and when you will go out!
Stop Loss Order
There are two types of stops: physical and mental. The first is a real warrant, which you place immediately after opening a position through your broker. The mental stop loss remains with you on the paper (or in mind) and when the price reaches this level, you close the market position with the warrant. From a technical point of view, it does not matter which stop order you use.
Regardless of what type of stop order you use always exit the market according to the plan!
According to the Dow theory, any price movement is treated as part of a cycle and the purpose of swing trading is to “catch” medium-term fluctuations to enter a strong trend in time. The technique is practically not automatable. So market players with good analytical thinking and quick reaction work on it, in the arsenal of which there are different tactics depending on the situation.
Swing positions are held open from a few hours to 3-5 days (as the trend develops), the number of entries and additions should be minimal. The desire to squeeze out of the trend means high risks, and therefore Stop Loss is mandatory, taking into account the average volatility of the asset and the state of the market.