How to Swing Trading

Swing trading is a strategy trading that use volatility or fluctuation market price. Trader who use this strategy system called swing trader.

Swing traders are not the same as day traders, if you look in their trading activities. Trading frequency of day traders is very aggressive, they can open buy or sell position in many times in one day. But day traders just find the right momentum to open single trading position, usually they take 2 – 10 days to hold the trading position. Day traders look money with optimizing the market price fluctuation in certain period. They open buy position when the market price swing bullish and they open sell position when the market price swing bearish.

Swing traders usually take currency pair which has big range price. But they need a good trading strategy to trade in the foreign exchange market. At least they use 2 elements in their trading system, the trend identification and stop loss. Identify trend direction of the market is very difficult, but the good trading system must be able to identify the market trend immediately. Fail in order to determine the market trend its mean trouble for a day trader. You have to keep in your mind “always follow the market trend” or ‘trade in direction of the market trend”.

Stop loss is also one of the most important elements in forex trading system that must follow by foreign exchange trader. There are so many forex trader who has open trading position without stop loss order. Stop loss order is a useful element to keeps trader’s money if the market move against their trading direction. The good swing trading system must be able to determine stop loss level in every trade.

The swing trading purposed to open trading position which has big winning opportunities according market trend direction. A swing trader infrequently makes counter trading or trade against the market trend. Trade in the direction of the market trend will increase your chance to earn bigger profits.

In other side swing trading system applied in long term trading as long as stop loss and profit target has not been reached. This system needs long term analysis and experienced skill from its trader.