There are many methods for Forex, but we will introduce Forex swing trading, which trades in the medium term. We will discuss the characteristics of swing trading and how to make good profits.
What is Forex swing trading?
Swing trading in Forex is a long-term trading method in Forex trading, where you hold and buy and sell your position for days to weeks, or even months if it is long. It is a method.
Read more related Forex: What is Forex Scalping That Makes Small Profits?
Unlike scalping, which repeats trading with the shortest sense, and day trading, which trades several times a day, you will hold a position for a long period of time, so you need to have the strong mental strength and the ability to firmly identify trends.
Basics of Forex Swing Trading
Ride a big trend in swing trading
In swing trading, it is most important to ride a big trend in order to make a solid profit. Looking at the charts on a daily or weekly basis, there are many cases where the trend is in a certain direction, although there are small fluctuations.
If you can get on with this trend, you can make a profit, but if you don't identify it, you will lose money.
In Forex, we use leverage and there are days when we move 100 pips or more a day, so we tend to focus on immediate profits and losses, but in swing trading, we trade with a firm long-term perspective. is needed.
Important mental in swing trading
As mentioned in "Riding a big trend in swing trading", in Forex, in addition to using leverage, it can move more than 100 pips a day, so it is easy to focus on immediate profits and losses.
However, in swing trading, it is not possible to make a solid profit by feeling emotional with those small movements. In swing trading, it is important to cut losses firmly, but you do not have to be impatient for small unrealized losses. It is important to have a strong mentality and trade from a long-term perspective.
Choose a currency pair with high volatility in swing trading
In swing trading, you will hold a position for days or even weeks or more. Therefore, it becomes difficult to make a big profit in a narrow range market.
Therefore, from the perspective of financial efficiency, it is necessary to select and sell currency pairs with high volatility, that is, active movements.
For example, the pound sterling is known for its high volatility, and the trend is that moving in one direction tends to give momentum to that trend.
However, depending on the time of year, there may not be much movement, so it is a good idea to conduct fundamental analysis and select a currency pair while considering the social situation.
Pay attention to swap points in swing trading
In swing trading, you will hold the currency for a long time. At that time, you need to pay attention to the swap point.
Swap points are a mechanism by which interest rate differentials between countries that issue the currency come and go every day.
However, if you trade between other currencies, you may end up with a certain amount of money every day.
Even if it's a small amount per day, it can be a painful expense in the long run. When doing swing trading, you need to pay close attention to swap points.
Use large target pips for swing trading
In swing trading, we trade for a long period of time, so we want to make a big profit with one trade.
Therefore, we need to aim for a profit of at least 100 pips. In swing trading, it is also necessary to manage risks and try to be bullish instead of setting bearish goals.
To make a solid profit in swing trading
In swing trading, you will hold a position for a long period of time, and you tend to notice small daily changes in trends and unrealized losses.
However, in swing trading, a long-term perspective is indispensable in order to make a solid profit.
If you have a strong mentality, manage your risk well, and try swing trading, you will be able to make a solid profit. Get ready and make a profit on swing trading.
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