How to Learn Swing Trading in Forex

By Albert Schmidt

Many people start trading in Forex using short term trading techniques or even scalping techniques. In my opinion learning such techniques is a much harder task than learning longer term trading techniques like swing trading. That was my experience. It may not be your experience. However I believe that swing trading has a number of advantages over the short period trading systems.

1. Pay less in spreads.

Traders don't pay commissions in Forex instead they pay spreads - the difference between buy and sell prices. So if you execute 10 trades in a short time period with a currency that has 2 pips spread you already short of 20 pips. That's the reason I believe a good trading strategy to start with should have less number of executions in the same day and it should have a higher profit target. Swing trading allows you to do that. A trade last for a few days and take-profit levels are usually well over 100 pips.

2. Better emotional control.

Short time trades usually require traders continuously monitor their trades. It can be really stressful for a trader who just starting his career in Forex. You may be already familiar with the emotional roller coaster of observing the price going in favor and against your position. On the other hand longer-term swing trading may require only a small amount of time to monitor the trade. You still need time to study the market and look for the signals of your system. But once you execute the trade, set up the stop-loss and take profit orders then all that left is to come back to you charts once or twice a day to monitor the progress of your trade.

3. Level of noise.

When you work with the higher time frame charts for swing trading you can easily spot the price patterns that you need to trade. Quite in contrary shorter timeframe charts have the level of noise pretty high. Look at one-minute charts everything is buried in random noise so it's hard to see any price pattern appropriate for a trade.

4. Part time trading.

I already mentioned that the longer the timeframe you trade the less time is involved in monitoring your trade and ultimately less time to spot the right setup to trade. This is a big advantage to those who want to see if trading is a good opportunity for them. Those people can spend only small amount of time trading Forex.

To learn swing trading is easy. In my opinion it's easier than most day trading techniques. It does require patience though. Since a trade can last a few days and also there may be no trade days. So it's a good tool to develop you patience. Pick a swing trading system that has a positive mathematical expectation and execute it at least 100 times on a demo account. Don't worry if it takes a long time. Market is always here. There is always an opportunity to start making profit in Forex. Once you mastered the execution of your trade and developed patience necessary for swing trading then look at the outcome of your system. If it has a positive gain you are ready to trade on a live account.

Albert Schmidt is a part-time currency trader. After quite a long time of struggle he learned to make consistent profit trading in Forex. Review a trading strategy he successfully uses in his trading Forex.