FX swing trading is simple to understand and will always work and is perfect for novice traders, not only is it easy to understand, its fun exciting and makes big gains, in around 30 minutes a day. Let's look at a simple Forex swing trading strategy which can lead you to Forex trading success.
The reason why swing trading always works is - its based on the fact that, humans are emotional beings and will always be influenced by the emotions of greed or fear. When investors are greedy, they push prices to far to the upside and when fear takes hold, they push prices to far to the downside and if you want proof of this, you can see it on a Forex chart in the form of a short term price spike.
Fx Trading
You will notice these price spikes, never last long and prices soon return to more realistic levels. So what sort of system should you use to capitalize on these price spikes? Let's take look.
We are going to look at an example, of a price spike to the upside but the same logic of course works in reverse in a bear market - let's take a look at the strategy.
- What you need to do is look for a price spike to occur and then, you have a potential swing trade which you can enter for profit.
- Once the price spike is in motion, you need to check your charts and see how overbought the currency has become. To measure how overbought a currency is you need to use some momentum indicators which will give you a visual view of this. We don't have time to discuss them in detail here - but good ones to use are - the MACD, Stochastic and RSI. They will only take you a day or two to learn, so look at them in more detail.
- Once the currency has become overbought, wait until momentum turns down - while prices are still rising and go short. This is called trading divergence and as soon as momentum has diverged from price, it warns of a trend change so you need to get your trade in the market.
- Then you need to place your stop behind resistance and pick a downside target which should be just above support and take profit.
When swing trading be careful, to study all the majors and cross rates and pick markets that are not just overbought but near chart extremes - the more overbought a currency is the harder it will fall so, trade extremes! You may trade less but your profit per trade will be huge compared to your risk.
A simple strategy?
Yes and it makes a lot of money! Humans will always be greedy or fearful and w2ill always push prices to far up or down and this gives you the opportunity, to make a great second income from home, in around 30 minutes per day.
FX Swing Trading - The Perfect Method for Novice Traders to Make a Triple Digit Income!
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