Forex trading can be very confusing and complicated if you are starting to learn the 101s. There are several styles, strategies, and methods that are involved in this process. However, worry not, because here we discuss one of popular ways to trade in the financial market – Forex swing trader.
Who Are These Forex Swing Traders?
Well, swing trading is an activity where the trades happen over several days, even weeks. It is opposite of day trading where the buying and selling happens on the same day.
Swing traders hold their assets for more than a day and identify swings in the trade. Swings are of two types:
Swing low – When an asset is going through a downtrend and its price is low.
Swing high – When the asset is going through an uptrend and its price is high.
A Forex swing trader monitors these swings and buys/sells assets according to their current position.
What Are The Characteristics Of Forex Swing Traders?
Swing traders Forex are people who are usually busy throughout the day and don’t get time to monitor the markets. They are people you exhibit great calmness and take the patience is a virtue phrase quite seriously.
They use technical and fundamental analysis of the market to create trading algorithms. Plus these traders also use these algorithms to buy and sell the assets.
A Forexswing trader targets smaller profits instead of going for big ones. As the length of trade is short, he/she can make smaller profits which can eventually become a large turnover.
Traders lookout for breakout and breakdown points on the chart and keep themselves ahead of the situation. They identify the crucial positions of the assets and make their move according to the trend.
Advantages of Swing Trading
It can be suitable for beginners and amateurs.
It doesn’t require constant monitoring and can be useful for part-time traders.
The swings that happen overnight can go in your favor sometime.
Swing trading allows a person to analyze the market more thoroughly and make the right decision.
It is simple and does not require expensive computers and large screens.
It involves fewer stop losses which can enable you to back out before losing a significant portion.
Swing trading provides relatively less stress as you are spending less time monitoring the market.
Useful Indicators of Forex trading
Momentum Oscillators – It is indicated by a range of 0 to 100. It analyses whether the price of a fall will further rise or fall.
Relative Strength Index (RSI) – It is a score that also ranges between 0 and 100. It combines a share’s profits and losses, indexes them and provides an RSI score to it.
Bollinger Bands – They are a type of trading bands or envelopes that analyses patterns and provides trading approaches.
These are some crucial things you will need to know about becoming a Forex swing trader. However, before jumping to conclusions you should practice with a demo account. That will only make you more confident when trading currencies.
The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteForex. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.