How To Make Swing Trading Work For You

You’ve got the disciplined mind of a chess player. Your ability to play the long game is unparalleled. You’ve got nerves of steel, and a firm sense of self-belief. Now let’s hone those swing trading skills. To get you started, let’s address some of the most common questions that new swing traders have.

Why swing trade?

Swing trading is an interesting proposition for forex traders who either don’t have the time or aren’t interested in sitting in front of their terminals for long periods of time.

With a typical length of trades between five and ten days, traders have the opportunity to avoid spending significant amounts of time closely monitoring the market, especially if they’ve set up their take profit and stop loss orders correctly.

On the other hand, swing trading does require a significant amount discipline in order to do it effectively. The temptation to get out of positions early can be overwhelming, as can the desire to set take profit orders too ambitiously.

Which timeframes should I be using?

The best timeframes for you to be using as a forex swing trader will differ depending on your strategy, objectives, and the frequency by which you place trades. The best way to find out which timeframes work best for you is often to experiment, either with a demo account or a small deposit on a real account.

Typically, traders make use of more than one timeframe and this is equally true of swing traders. The value of using two to three different timeframes lies in the ability to better understand the wider market context, as well as the immediate conditions of the market in detail.

Given that swing trading is highly reliant on trends, some traders recommend using three timeframes (for example a weekly, a daily, and a four hour chart) in order to help get the big picture.

To find out whether swing trading might be right for you, take the quiz!

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How long should I hold on to my trades for?

As previously mentioned, swing traders typically hold on to their trades between five and ten days. Trades are usually not held for longer than two weeks, or less than two days.

Two weeks is obviously a large window within which to play. Having a coherent strategy as well as defined take profit and stop loss orders are critical. The temptation to hold out for more profit, or to stay in the market waiting for a rebound after a loss, can be significant.

Timing your entry is just as essential for swing traders as it is for scalpers and day traders.

How much volatility do I want when swing trading?

Whereas day traders can often use volatility to their advantage, for swing traders volatility is less than desirable. Steady growth is the key for swing trading and it is unlikely that you’re going to consistently see this in a volatile market.

The easiest way to avoid volatility is to trade popular, high liquidity pairs like GBPUSD and EURUSD, and to make use of indicators like the Average True Range indicator which can help you identify periods of extra low volatility. To find out more about making the most of low volatility, take the quiz and download the ebook.

Which indicators should I be using as a swing trader?

Swing traders make use of both fundamental analysis, including news and reports, as well as technical analysis methods, including indicators.

Our MetaTrader 4 platform comes with 30 trading indicators and our MetaTrader 5 platform comes with an expanded selection of 38 indicators. Traders using both platforms can access more indicators from the MQL4 and MQL5 communities respectively.

Many experienced traders will swear by one or two specific indicators, however, the fact of the matter is that there is no silver bullet when it comes to choosing which ones are best for you. All indicators are just manipulations of volume and price data, and are therefore always open to errors.

Picking the right indicator for you is really a matter of experience and experimentation. Start with some of the most popular swing trader indicators, including moving average and relative strength index, and then go from there.

So you’ve got the basics nailed down. Now for the next steps. Download our ebook to dive deeper in the world of swing trading, then hit the markets with Exness and make your first trades as a swing trader!

Interested in exploring other trading strategies? Check out our guide to being a scalper, and our guide to being a day trader. Alternatively, take our quiz to find out which style of trading you are best suited to.

TAKE THE QUIZ

This article is a marketing communication and does not constitute investment advice or research. Its content represents the general views of our experts and does not consider individual readers’ personal circumstances, investment experience, or current financial situation. This article is not prepared in accordance with legal requirements promoting independent investment research, and Exness is not subject to any prohibition on dealing before the release of the article. Readers should consider the possibility that they may incur losses. Therefore, Exness is not liable for any losses incurred due to the use of its articles. Please note that past performance of an asset is not a reliable indicator of future results.