Currency swing trading is aimed at catching reactions within the major trend (either bullish or bearish) and seeks to take advantage of trades that can last anywhere from a couple of days, to around a week in duration.
In this respect it is a short term form of trading and is the only short term forex trading method that works.

Currency Swing Trading v Currency Day Trading

Forex day trading is attempted by many forex traders but simply doesn’t work, because the data is not valid and volatility can and does take prices anywhere in a day. Support and resistance is therefore not valid and day traders lose.
Swing traders are trading short term – but support and resistance are valid and make these moves tradable.

Spotting Swing Trades

Currency swing trading is normally carried out between support and resistance levels within the major trend. The forex trader will watch prices move into support or resistance and then take the opposite view and execute a trading signal in the opposite direction.

Confirming a Currency Swing Trade

As with any currency trading system, it is important not to simply take a position and hope that support and resistance levels hold – the trader should look confirmation. This means a waning and turn of price momentum, to confirm that support and resistance are likely to hold and then execute a trading signal.

Trading the Odds

By acting on confirmation in this way with a forex swing trading system, the trader is keeping the odds on their side and this is essential in any forex trading strategy, to win longer term.

Placing Stop Loss Orders

Stop levels are then placed behind the support or resistance level.

Taking Profits

Unlike forex trend following where a trader will place and trail a stop, a currency swing trader will operate using a target. The target will normally be just above support and resistance, that lies in the direction they are trading in and when prices approach the level, the trading profit is banked.

Volatility

Swing trading suits volatile, liquid currencies and the best ones to trade are:
Euro, Yen, British Pound, Swiss Franc, Canadian and Australian Dollar.
The euro and the yen are the two best currencies to focus on, as they offer great volatility and large volumes, which means forex brokers, offer tight spreads.
Any currency that does not have good liquidity, should not be swing traded. Liquidity is essential, for locking in profits quickly and just as importantly, limiting losses.

Commission Impact

In currency swing trading the cost of doing business adds up, as you are trading frequently and aiming for smaller profits, than you are in long term trend following. It is therefore essential to pick a broker that will offer you tight spreads (around 3 pips) to prevent the cost of doing business impacting on your profit.

Keep It Simple

Currency swing trading is very easy to learn.
All you need to use is support and resistance, a few momentum indicators and your all set. Resist the temptation to make your currency trading strategy to complicated, cram in to many indicators into your forex trading system and you will have too many elements to break and it will fail.
Swing trading systems should be kept simple, as simple systems tend to be more robust in the face of brutal market conditions than complicated ones.
All the best swing traders use simple systems and you should to.

Learn a Simple Method and apply it

If you keep your currency swing trading simple, you will understand the logic of it and it will be robust which, will mean that you will be able to apply it with discipline.
This is essential for currency trading success.
It should only take you a few days to learn a swing trading method and then you can look for profits in under an hour a day.
You don’t need to spend all day following the price action.
A good time to look for currency swing trading set ups, are at the end of the US trading day, when the NYSE closes.

Further info

Swing trading is ideal for novice traders and you can read why in our section swing trading for beginners for an idea of how to construct and apply a swing trading system for profits, we have given the basics of the way we do it in the section Swing trading in forex. Currency swing trading is a great way to build significant profits over time and is ideal for novice traders, as well as experienced pros.

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Long Term Trend Following V Currency Swing Trading

The hardest form of trading to master not from the point of view of method – but from the point of view of adopting the right mindset is long term trend following as we have just stated.
If you look at any Forex chart, you will see Forex trends that last for months or even years yet, only a small minority of forex traders have the discipline and correct mindset to hold these trends and milk them for their full profit potential.
All traders want to make big gains but capturing them is the hardest bit.
If money is important to you, (as it is to most forex traders) then your emotions will be present and they will play havoc with your discipline, in you in your quest to hold these trends.
When counter trend moves come, they will reduce your open equity profits (sometimes by thousands of dollars quickly) and the losses in open equity can frighten you to take profits early.
Most traders get excited and nervous when they get a profit and the bigger the profit gets; the more tempted they are to bank it before it gets away. Most forex traders end up banking early and getting a small or marginal profit, when they could have had a huge profit.
That’s why swing trading for beginners is the best strategy to try first – it requires less discipline and is less demanding, in terms of your mindset and attitude.

Swing Trading for beginners Advantages

The aim is to catch reactions within major trends which normally last around a week and profits can be taken quickly.
Swing trading forex trends is exciting, there are plenty of trades and you know if you are right or wrong quickly – this makes it easy on the mind and psychologically better for most forex traders especially novice traders.
Swing trading is the best form of short term trading that works. Day trading sounds great in theory – but in practice doesn’t work as the data is not valid, whereas it is in swing trading.
We have all ready given the basics of what swing trading for beginners is and in this section why it is a great method to trade and can be very profitable part of your forex trading strategy.
Next we need to design a forex trading system for swing trading and this is simple:
You can get a swing trading system together in a few days – that’s robust, offers great risk to reward and is easy to understand, so you can execute your trading signals with confidence and discipline.
Now we are going to look at building a swing trading for beginners system – so click the link here swing trading in forex and let’s get started.

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If you do not know what swing trading in forex is, check out the background at currency swing trading and if you want to know why its one of the easiest forms of trading psychologically, check out our section swing trading for beginners

Here we are going to look at swing trading in forex from the standpoint of building a simple forex trading system, based on catching swing trades which is easy to understand, easy to apply and even better, can make big forex profits.
Here is your guide to a swing trading in forex with a system designed to make regular capital gains, whilst at the same time keeping losses to a minimum

Step 1 – Spot Support and Resistance

You need to use trend lines and spot areas of support or resistance to trade into.
Look for 3 tests or more – the more tests there are of course, the more valid and important the level will be.
Now you have spotted the opportunity, you need to time your trading signal and correct timing is crucial to success.

Step 2 – Trade with Price Momentum

Many traders simply like to go short into resistance or long into support, as it’s tested but this will never work.
If you do this, you are guessing or hoping the level will hold and the market will not reward you for this.
You don’t have the odds on your side and you will end up a loser.
With swing trading in forex (or any other method of trading for that matter) you need to trade the odds and get them in your favor and this means getting confirmation. You need to trade with confirmation of price momentum on your side BEFORE you execute your trading signal.
You therefore need to wait for a test of support or resistance.
Then Wait
Watch for the currency to turn away from support or resistance with accelerating price momentum and THEN execute trade.
You are trading with price momentum and the odds are in your favor.
Sure you won’t catch the turn exactly and you miss a bit of profit – but if you trade this way and grab 60 – 70% of the potential overall profit, you will make a lot of money and this is the aim of any forex trading system.

Which Indicators Are Best?

Try these:
The stochastic and the Relative Strength Index (RSI) as a good pair to start with.
We don’t have enough time to explain them in detail here – but these are superb momentum indicators.
There are many others – just pick and choose a few you like best but don’t use too many – up to 3 is fine.
When swing trading in forex, your system should be simple and robust – if you complicate it you will lose, as there will be too many elements to break.

Step 3 – Stop Reverse on Breakouts

For example, if you are trading into resistance that is at a market high, you may want to use a stop reverse upon a break.
Most major trends start from new market highs NOT market lows.
If prices break out go with the break.
The initial breakout of strong resistance, will see stops hit and new trend followers kick in and by taking the turn, you can go with this momentum.
Be careful – you should only do this into strong resistance that is considered valid by the market participants. This will ensure you don’t get caught trading false or weak breakout trades.

Step 4 Take Profits Too Soon

When swing trading in forex, your profits can disappear quickly, so you need to make sure that you get them in the bank, when the risk reward is in your favor – before recoil in price sets off a counter move.
Take your profits early and by this we mean.
BEFORE they test the next level of support and resistance.
Your aim is to “hit and run”, the closer the trade moves to a target the more chance you have of a reversal so get out early. You may miss some of the move – but as we said earlier (on getting into the trade) that doesn’t matter – your aim is 60 – 70% of the overall profit potential.
If you can do this regularly, you will make you a lot of money and ensure your forex trading strategy is successful over the long run.
Other points in relation to a successful swing trading method we covered earlier in  other sections – but their important so to repeat:
Only trade liquid, volatile major currencies and pick a broker that offers you tight 2 – 3 pip spreads, so they do not impact on your overall forex profits.

A Simple Way to Make Big Profits!

Swing trading in forex is simple to learn, easy to apply and requires far less discipline than longer term trend following. It’s also exciting, fun and ideal for either novice traders or seasoned market veterans – learn and enjoy forex swing trading today

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Everything about forex trading can be learned with the right forex education and here we are going to give you a great example of what can be achieved.
You don’t need to work hard to win at forex trading you just need to learn the RIGHT knowledge.
A perfect example of this is the “turtle” experiment, which is outlined below.
In just two weeks a group of 14 people from different walks of life were taught to trade financial markets, and these traders nicknamed the “turtles” became world famous.
The turtle experiment proved ANYONE can become a successful trader with the right education and everything about trading can be specifically learned.
Traders with no experience learned the tools to make millions in just two weeks, and they represented a variety of different people, from all walks of life including:

· An actor
· A security guard
· Two professional card players
· An auditor
· A boy who had just left school
· A woman who used to be an exchange clerk

They then went on to make annualized 70% returns!

Is Trading a Learned Skill, or is it all Down to innate Ability?

In 1984, Richard Dennis taught a Trend Following trading methodology to the group of students above, to prove anyone, no matter what their profession, could be taught the skills required to trade successfully.
Dennis was settling a debate with his friend and business partner William Eckhardt. Dennis believed anyone could learn to trade and Eckhardt disagreed – the “turtle” experiment was conducted to settle the debate.

The Experiment

The group of 14 traders he taught (the turtles) earned an average annual compound rate of return of 80% proving Dennis right and making him $100 million dollars!

What the Experiment Proved

The experiment with the “turtles” showed that anyone could indeed be taught to trade – all they had to do was learn, and follow a set of rules.

What you can learn from the Turtle experiment

Trading actually looks quite simple, yet few succeed and the fact is 95% of traders lose all their money.
The reason most traders fail is simply they cannot get the right mindset to succeed. The turtle trading experiment taught them the RIGHT MINDSET to trade successfully
The system they were taught was essentially simple, so simple in fact, that anyone could learn it and he combined this with giving the traders not just the system and rules but also the mindset to succeed and trade it with discipline.
Dennis realized that most traders can’t trade with discipline, their emotions get involved and they end up losing.

Why is Discipline so Important?

Quite simply, without the discipline to follow your method, you don’t have a method at all, and are doomed to failure – money management breaks down and losses inevitably follow.
Dennis taught them to have confidence in the system they were trading, and follow it rigidly to achieve success.

A Simple System + Discipline = Trading Success

Dennis knew that complicated trading methods are NOT likely to be more successful than simple ones – as a general rule, a simple trading system is more likely to be successful than a complicated one, as its more robust.
Simple systems are easier to understand as well – this meant the turtles had confidence in the system and could apply it with discipline.

So, What can we Learn from the Turtles?

Well, we know that anyone can learn to trade successfully and it can be do quickly.
We also know that simple systems applied with discipline and strict money management will work over time.
To become a successful trader you need a simple method that you can understand and have confidence in.
Just as confidence flows from understanding, discipline flows from confidence and it is the discipline to follow your method through losing periods which, is the key to long term success
You may not be as successful as the turtles but you can become a successful trader and you can make a lot of money.
Trading offers ANYONE the chance to build wealth – all you need to do is have the right mindset and learn the right knowledge.
Are you prepared for a challenge that could change your financial future forever? If you are, trading offers you the route to financial success.

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