Everything You Need to Know about Forex Swing Strategies


There are many different styles of trading and the one you chose will probably be based on your tolerance to risk. So, if you have a high risk threshold and like living by the seat of your pants, scalp trading might suit, but if you are the patient type and don’t have time to be a full-time trader chained to your desk, forex swing trading is perfect for you.

What is Swing Trading?

Day traders buy and sell in the same day whereas trend traders look for long-term price movements. Swing traders fall in the middle. They hold their positions for a few days, hoping to profit from significant price drops.

Who is Best Suited to Swing Trading?

These days, anyone can have a go at forex trading and you don’t need to be a professional to profit from the ups and downs of the currency markets. Thanks to reputable brokers like easyMarkets, it is easy to open a forex trading account and start making trades. This has opened the market up to amateurs, who make trades part-time in the hope of making small profits.

Swing trading is ideal for part-time traders who can’t devote all their time to monitoring their positions. Because swing traders leave their positions open for several days, it’s a handy strategy for amateurs. You can check your trades and analyse trends in the evening and get on with your life during the day.

If you are a total newbie, it’s wise to check a learning resource, where you can get some useful tips on trading, including other strategies listed here.

How Does Swing Trading Work?

Forex traders buy and sell when the conditions are optimum. They look for price rises and falls, also known as ‘swings’. So, if you spot that your chosen currency is rising in price (it swings high), you buy, but when it swings low or falls, it is time to sell.

Risks of Swing Trading

The key to success in forex trading is risk management. Unless you manage your risk, you could end up losing significant sums of money. One way to manage your risk is by using stop losses.

The main risk for swing traders is volatility. The forex market is very volatile and prices can rise or fall hard without much warning. During any 24-hour period, you can expect to see numerous price fluctuations. However, instead of panicking, it is important that you stay focused on your analysis. As long as your analysis is on target, you should be OK.

It is common to have large stop losses and fewer trades in swing trading. This helps to minimize the risks.

Is Swing Trading Right for You?

Not everyone is cut out for swing trading. It probably won’t suit you if you like fast trades and you lack patience. But if you are only able to trade part-time and you don’t mind weathering periods of volatility, swing trading is a good strategy to try!