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Forex trading for beginners: The scope on forex swing trading

Not only is the forex market 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. This strategy does draw a variety of traders! Although most of them are seasons trader, however, resist giving up! 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 profit from oscillations 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?

ST is a kind of trading strategy where you, as a trader, aims to make a profit from oscillations that occur in a wider market movement. Depending on your speculations, using this strategy can take around days and even weeks.

This is commonly compared to day trading since they have the same objective but unlike ST, day trading only takes a day to trade. This means you can open and close trades within a day.

Most swing traders need to be knowledgeable about 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?

As a swing trader, you find opportunities using technical indicators to help you decide when to open and exit a trade. One of the most common indicators most 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. Therefore,  is well known that the market is overbought when the RSI climbs over 70 and drops below 30.

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 platform, (2) have a hefty knowledge in forex (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! Plus, all these skills are attainable, all you need is the willingness to learn! 

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 you can get as a swing trader can range from around 50 pips to 150 pips, depending on the currency pair you choose to trade. If you happen to use a strong currency pair, this can increase.

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 – Euro and and Japanese Yen currency pair is known for its high liquidity which means quicker and cheaper trading costs.
  • EUR/USD – The Euro and US currency 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 – The Australian and US currency pair is recognised as a commodities pairing since it is frequently linked to precious metals and other significant Australian exports.

Takeaway

Now that you are knowledgeable with swing trading, you can decide if you want to utilise it as a forex technique or not. This strategy is not for everyone, but if you believe you would be successful at it, this approach could be extremely profitable.

Don’t forget all the key details about ST 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! Because who knows, this strategy might just be your niche technique!

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