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Forex Swing Trading Strategies

Author: Rohit Ch
by Rohit Ch
Posted: Nov 28, 2020
swing trading

What is swing trading after all?

As readers of the market, we are looking around for the techniques to make more and more money and also, not lose a lot of it at the same time. Swing trading is one such method.

Swing traders work with procedural scrutiny to look out for stocks that are about to climb or decrease in values. These traders aren't concerned with the fundamental values of the stock, but they are some concerned with the movement a particular stock follows.

In swing trading, the stock is held some time during which its value increases, after the individual trader realizes that it has been following an upward trend. This time duration can be a few days to a few weeks. After that, the stock is sold for profit. The precise procedural breakdown plays an imperative role in the whole process because even a slight inaccuracy can lead to an impending loss.

In what ways can you swing trade?

There are some basic strategies via which a trader can swing trade.

  1. Fibonacci retracement:

Fibonacci retracement is a technique in which a trader has to look out for a certain pattern. This technique works on the idea of the Fibonacci series.

In the Fibonacci series, the third number is the sum of the previous two numbers. For example,


What traders pull out of this pattern is the tendency of a stock to retrace the percentage of the previous move before reversing.

Is it useful?

It can be useful sometimes, but the math has to be done nicely.

Support And Resistance Triggers in swing trading.

Depending on your approach, inclination and behaviour, you always have a choice to contribute in the swing inside the range or in a trend. Swing trader always Aim to hook to the swing low as early as possible and sell when the swing has concluded.

Resistance becomes a support level once it was broken up. Always spread the support level to the right and pay attention if the price complements the support level. Do treat support as a region/range instead of single streak/line.

3. Channel trading: stocks tend to display a trend within a channel. It doesn't matter if a downward trend or an upward trend.

You need to consider opening a "sell" position when the price goes down the top line of the channel. Except its price disrupts out of the channel, moving higher and representing a snag and the commencement of an uptrend.

  1. 10- and 20-day SMA: SMA stands for simple moving averages. It is possible, it will take a period of time say ten days, and it will smooth out the data which represents the price of a stock for that particular time period. By smoothing out, this method will constantly update an average price value so the discontinuity in the data will be negligible.

For in this example, 10-days SMA adds Up the daily close on the prices for the last 10 days of SMA and divides by 10 to calculate a new fresh average each day.

The average is used to cut out the "noise" in the stock chart.

  1. MACD crossover: It's one of the most prevalent swing trading gauges used to outline trend direction and snags. MACD consists of two types of moving averages – the MACD line and signal line buy and sell signals generated when these two lines cross each other. If the MACD line crossed above the signal line a bullish trending is signposted and you would consider entering a buy trade. If the MACD line crosses underneath the signal line, a bearish trend is expected, suggested a selling trade. A stocks swing trader would then wait for the two lines to cross again, generating a signal for a trade in the opposite direction, before they exit the trade.
Why should you swing trade?

Are you a short term trader? Do you work during normal market hours? Do you have less time as a trader?

Then swing trading is just the thing for you. Day trading has its own pressures. The heaviest of it being the time limit where you have to quickly make decisions. Swing trading allows you to take a more relaxed decision. The risk of overnight trading is present, but the gaps that work against you sometimes can also work in your favour. Swing trading is a tool for a trader who just does not have enough time. Brokers like InvestLite 2invest and Primefin are some of the major users of swing trading.

Swing trading helps you make more money while you sit back and study the trends of the market and take your decision in a relaxed manner.

About the Author

I am a Digital Marketer and blogger of the stock market, trading online and also providing tips to trade. Now you can get all the tips and tricks.

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Author: Rohit Ch

Rohit Ch

Member since: Jul 21, 2020
Published articles: 8

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