Forex Swing Trading – How to do Swing Trading in Forex

Forex is one of the biggest markets in the world. It is much bigger than any stock market in the world. If we talk about volume, the forex market is almost 5000 times bigger than the stock market of United States of America. From this, you can imagine the volume and number of transactions happening in forex market every day. On top of that, forex market is open twenty four hours a day. Forex swing trading is one of the trading strategies used by day traders in the forex market.

When we talk about normal swing trading, we know that the traders hold the stocks for 2 to 5 days and then close the transaction. It lies somewhere between day trading and long term investing. Swing trading can be done in forex market as well and it is known as forex swing trading. The same principles of forex market apply to the forex swing trading as well.

Forex swing trading strategies are also similar to strategies which are being used in the normal swing trading. It involves principles finding a suitable entry point after doing the trend analysis, then finding suitable pivot points and lastly find the exit points within a couple of days.

Like in usual swing trading, the trend analysis is done on currency pairs to find a suitable point of entry. One method is to apply 10ma and 30ema moving averages study to a candlestick chart.

Once you find a trend using above technique you find a suitable point of entry. In upward trend the currency will trade above the 10ma, and then swing down into the zone between the 10ma and 30ema. On the other hand, in downward trend, the currency will oscillate below the 10 ma, and swing up into the zone. Do a candlestick analysis and find doji, harami or engulfing pattern to find a suitable entry point.

After you enter into a trade, you need to start looking for an exit point. First of all, put a stop loss based on your risk appetite. Then set a profit target depending upon your own method of forex swing trading. You can use a candlestick analysis, Fibonacci method or any other technique to do that. Once you reach the target, you can sell the currency pair.

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