Swing Trading Forex - Discover a Way Wealthy Traders Make Consistent Profits
Ever wondered how so many people are making a living trading the Forex market? Well, the most common way that people do this is by using swing trading Forex methods. This form of trading is far less risky than scalping or trading news events. The idea is to catch a point where a currency pairs price movement is about to swing in another direction.
Why is this so powerful? Well, the top traded currency pairs are known to trend for a few hundred pips over a short period of time. So, when you use swing trading methods to find the beginning of a trend, you can let it ride for massive profits. Once you enter a swing trade, it's a smart idea to use a trailing stop loss order. This will allow you to capture as much profit as possible when a currency pair trends a long way. Also, if price turns against you, you will protect your capital.
One method to pick out swing points is by using support and resistance levels. I like to see price channeling between support and resistance lines. It looks like a snake bouncing back and forth between these lines. For example, if price is trending up, and bouncing between support and resistance trend lines, you can buy and the low points and sell on the high points. This is a very safe way to trade.
Some traders will add oscillators to their charts. RSI is one that is fairly reliable. You can use this to help select the points that are about to swing. A more aggressive approach is to re-enter the trade after you close your long position in the previous example. You can then open a short position to make more profits. So, you keep going long and going short until the trend is over.
Regardless of how you decide to start using swing trading Forex methods, be sure to implement proper money management methods. Stop losses on all of your trades is a smart tactic to safe guard your capital from any large, unexpected price movements. Also, limiting the amount of capital per trade will reduce your risk. Only use about 15% to 20% of you account balance per trade.
All manual trading methods are very difficult to master. They take weeks if not months of practicing. Even then, you may not get it right. In conclusion, swing trading Forex methods work. The best way to use them is by using the latest technology that pick out these trade set ups for you.