If you want to get started in currency trading, currency swing trading is ideal. Here is a simple, easy to understand swing trading system to help you trade currencies for profit.
Swing trading is based on sound logic, unlike forex scalping or day trading which is the route a huge amount of traders go and lose.
Forex day trading and scalping doesn't work, because volatility in short term time frames is random, so you can never get the odds on your side.
Currency swing trading though involves using valid data of around 2 - 7 days which is valid and is based on the following logic.
Markets move to the following equation.
Fundamentals + Trader Perception of = Price
It's not the facts that are important; it's how traders perceive them that is.
Traders will always push prices to far away from the fundamentals, when greed and fear take hold.
Prices then become overbought and oversold in the short term and by executing trading signals against these overbought and oversold levels, the trader can make a profit, as prices return to more realistic levels which are in line with the fundamentals.
These price spikes are easy to see on a forex chart.
The trader can use the following method to take advantage of opportunities.
1. Look for a price spike
You are looking for price spikes, that make the market overbought or oversold in the short term and look for a level you think will hold.
2. Use Momentum Oscillators
These will show you when short term prices are overbought or oversold.
We have discussed them fully in our other articles. Some excellent ones to use are - the stochastic, RSI, ADX AND MACD.
These are visual indicators and you don't need to know the calculation, just look at the visual set up.
When currencies become over bought or oversold, you look for a price change in the opposite direction, supported by momentum changing in the direction you wish to trade.
3. Stop and Target
When you get the chance to execute your trading signal, put your stop behind the area of support or resistance you are trading into.
You then need to look to take your profit early if the price moves your way and do it, just before it reaches an important level in the other direction.
You should always take your profit early, before other traders do, as this keeps the odds in your favour.
The above is simple to do and can make big profits.
Currency swing trading is ideal for novices, as it's easy to understand, you get plenty of action and of course, it can be very profitable.
If you want to make big forex profits a currency swing trading system can do it for you. Make swing trading part of your forex trading strategy and it can give you big long term consistent profits.
Try swing trading in currencies and you maybe glad you did.
| NEW! 2 X FREE ESSENTIAL TRADER PDFS For free 2 x trading Pdf's and more FREE Forex Guides and an exclusive risk free Forex trading Course visit our website. |
No comments:
Post a Comment