Tag: FOREX

As a trader, you have available at your dispose many styles of trading, regardless if you prefer stocks over FOREX or options over futures. There really isn’t any other business in the world that offers what trading does. However, this doesn’t come with some risk. Trading by its very nature is risky, so it would make sense to evaluate the different styles of trading to see which one increases your odds. As a trader you need a trading style which gives you the best possible trading odds. Such a style that offers this is that of swing trading. This style of trading can be applied to almost any market and offers you the best chance to be a profitable trader.

There are two main reasons why swing trading is the best trading style for almost any market worldwide. The first is you’ll have more free time to do other things as swing trading doesn’t need you to be awake 24 hours a day waiting for a trade setup. Many people become obsessed with trading and watch their charts day in and day out. Typically, this kind of trading doesn’t help at all and instead ends up with blown up trading accounts. There is no need to wait in front of your monitor all day just to place a trade. The benefit of swing trading is the freedom that it gives you away from the computer. Entering and exiting trades doesn’t mean you must be near your computer all day.

In addition to trading freedom, swing trading is extremely low risk. Swing traders see the big picture. This can’t be said for other styles of trading which are cluttered with small time frames and the noise and false trading signals. They usually observe markets from the higher timeframes and can see major trends much more clearly. Trading low level timeframes is difficult as the trends come and go much faster. Such trends can be difficult to trade because they are so short. Trading higher timeframe trends usually gives a swing trader several days ot usually many months to make a profit. By being able to trade in the direction of these major trends, returns on your investment are increased greatly while the chance of a loss is reduced significantly.

Each person has their own style of trading, but if you are looking to gain an edge over the markets, no matter the market you trade, then swing trading should be something you look at. Swing trading has been used with great success by professional and corporate traders around the world for years. It would make sense that private traders should adopt this style based on how effective it has been proven to be. This style of trading offers the absolute highest levels of returns with lowest risk. No other trading method can offer higher returns without high levels of risk. Swing traders usually follow the smart money thanks to their preference of trading higher timeframes and only trading in the direction of the trend.

Just what are the best currencies for swing trading? The FOREX market has a vast number of currency pairs that a trader could trade. Some of these currency pairs are more main stream like the EUR/USD and others are so called exotics like the GBP/JPY to name just a few. With so many currency pairs available it can be difficult for a trader to know which one they should trade. Swing trading is based on the principal of taking chunks or slices out of the market as price moves up and down throughout the market. If you are looking for the best FOREX currency pair or pairs to trade then you should keep in mind that swing trading works best on markets that trend and are not too volatile. This isn’t to say you can’t swing trade volatile markets, but for anyone who is just starting out it would be advised to stick to a currency pair which satisfies these two conditions.

The first thing you should look for when searching for a currency pair to trade is that it is not too volatile. Volatility, for some traders, is seen as a good thing. This is because some traders believe that higher volatility implies more market movement and as a result a trader can earn more money per trade thanks to how far and fast price moves. This does hold some truth. Currency pairs like GBP/JPY do have a high degree of volatility and a trader can make more per trade thanks to how fast and rapid price can move. However, volatility also increases the level or degree of risk you are placing yourself at. Too much volatility makes it difficult for unseasoned traders to have enough time to correctly evaluate and plan a trade. Price can move so fast and hard that one single trade can turn out to be a massive loser. Volatility is a double sided coin. While you may earn more per trade, you also stand to lose more per trade if you make a bad decision. For this reason it is strongly recommended that new traders avoid any currency pairs like the GBP/JPY which are extremely volatile and seem to move up and down throughout the market for almost no apparent reason.

The second thing you should look for in a currency pair is the level of trendiness. Swing traders need a predominant trend for them to be able to make a profit. Without a trend or price moving up and down for extended periods of time it makes it extremely difficult for a swing trader to place trades. Swing traders need this up and down or zig zag movement of price where price moves up and down as it continue in the direction of the major trend. Many currency pairs move sideways and do not trend much. Some currency pairs trend but are far too volatile and there is no time for a swing trader to open a trade.

If you are looking for the best currency pairs to swing trade, be sure that you always keep in mind that swing trading requires a currency pair that is not too volatile and also has a tendency to trend. Trading a currency pair that satisfies these two conditions will greatly improve your swing trading success.