A Simple Swing Trading Strategy You Can Put To Use Right Now

(by Dean Saunders)

I started to develop a swing trading strategy after 2 years of trying to day trade the EURUSD. I found trading the longer time frames were not only far more profitable but also less stressful and freed up allot of time to do things I enjoy.

A good swing trading strategy must trade with the longer term trend, all we are looking to do is cut our losses short and let our profits run. It must be simple, anything complicated is only making our trading decisions more difficult.

Lets go through what rules I follow and how I identify a good trade. I trade the 4 hour charts with this swing trading strategy, it works well on this time frame and I suggest you do the same.

First we need to find the trend direction on the daily charts, if price starts in the bottom left and finishes in the top right of your screen then we are in a up trend. If price starts in the top left and finishes in the bottom right then we are in a down trend. If you have trouble show the chart to a child they will get it right every time!

Next we have to go back to the 4 hour chart to find an entry point that gives us good odds of price going in our favour. Look for retraces to the 50% fib level that coincides with good support/resistance levels, I also like to target 00 areas as this is what the larger institutions will be targeting for there orders. Remember only take trades with the trend on the daily chart!

Once you have found a suitable entry point set your order with a 50pip trailing stop loss. Please note that if you trade a currency pair with higher volatility then you will have to increase your stop to suit, 50 pip stop is for the EURUSD which is the main pair I trade.

Once your order is triggered just sit back and watch, do not interfere with the trade, you have a trailing stop to do the work for you. As soon as your position is in profit the trailing stop will move up keeping your stop exactly 50 pips behind and locking in any profit along the way.

Although many new comers looking for a swing trading strategy will laugh at this simple system I can assure you that it works. The more you get a feel for the market the more you will profit with this strategy. Trading forex does not need to be difficult, it is the human physiology that makes it hard for people to see profits disappear. Unfortunately this is part of the business and you must focus on the month to month gains not the day to day gains.

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Swing Trading – Use Momentum Indicators For Huge Profits, Live Examples

(by Sacha Tarkovsky)

If you have been following our articles you will know we love the stochastic indicator it’s simply the best timing indicator you can use and here’s the proof:

We showed you 5 trades and got 4 profits and 1 break even and have 3 open trades all in profit- So why is momentum so important let’s find out.

Trade with The Trend

One of the biggest mistakes you can make in trading is to trade against price momentum.

A Fatal Mistake

Many traders make the fatal mistake of simply buying near support and selling near resistance, even when price momentum is moving strongly to these levels.

However if you trade and “hope” these levels hold then you will be trading against momentum and increase your chances of losing.

Traders do this because they want to sell market tops and buy market bottoms.

This is not a good way to trade!

You are better off waiting for momentum to turn before trading this means that prices have tested the level and then you can get in with the odds on your side.

The Ultimate Timing Indicator For Swing Trades

The best momentum indicator in our view is the stochastic (explained more filly in our other articles) as it measures short term price momentum.

You can see it on many free sites such as futuresource.com.

It’s a visual indicator and you don’t actually need to know the equation behind it to use it – Same as you don’t need to know how an internal combustion engine works to drive a car.

If you look at the Dollar Yen trade we gave a few days ago, you will see both stochastic lines were pointing down as prices zeroed in on support.

To time an entry long and indicate support will hold you look for the following:

A cross of both lines to the upside.

This is referred to as bullish divergence, shows short term price momentum is reversing and the bulls are taking control above support.

The exact opposite applies when you are swing trading into resistance.

Don’t Predict Get Confirmation

By waiting for the crossover, you don’t buy the bottom, but you get in when the odds of an up move are higher and this will mean more profitable trading.

All three trades we picked as live examples are in profit and you can spot similar trade set ups.

Watch stochastic momentum above support or below resistance and watch for bearish or bullish divergence crossovers to time your trades.

If you do, you will get more high odds trades and take the hope out of your trading:

You will trade on the facts and this will increase your odds of success.

Try this method in your swing trading and see how effective it can be.

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On all aspects of becoming a profitable trader including features, downloads and some great FREE Trading PDF's visit our website at http://www.net-planet.org/index.html

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