By Ian C Jackson
Why would you want to take up swing trading? Maybe you're fed up with your boss, an intimidating character who cares little about anyone but her or himself? Or maybe you would just like to free up more time to spend with your Family and leisure activities and holidays.
I guess you wouldn't miss that trip to work either, getting stuck in traffic queues, paying more by the week, even the day, for fuel and car servicing costs. Your schedule is you own and you answer to no one.
When swing trading, it is absolutely imperative to have a sound management strategy in place. Adopting a system that allows you to place a stop into your swing trading positions is vital. A stop is simply a method by which you can integrate a fail safe into your trading position so that if and when the trade goes against you, and sometimes it will, you will not lose all your money.
Note, I say not ALL of you money. It is inevitable you will lose some money, it is part of the business as every professional trader knows. The idea is that your gains will far outweigh you losses.
Swing trading requires good discipline. The two emotions that need to be addressed here are greed and fear. These two emotions, if allowed to control the mind of a trader will be a sure route to failure.
How do we quantify each, in terms of swing trading? Should you not have a proper management strategy in place, you will likely not have stop loss protection. Just suppose you see your trade doing well, you become greedy and keep with it. This is in the likelihood your even watching it happen.
Then the trade starts to go in the opposite direction. Hopefully it is only temporary, hopefully it will happen slowly enough for you to cope with and to activate a stop loss manually. Unfortunately the markets are not like this and can rear their savage heads. So the reversal holds, you panic, but before you can activate your stop loss, the trade has beaten you moved faster than you can operate. You are gripped by fear. Need I say more.
For the swing traders, both beginner and experienced, the easiest way to trade these days is, I think, with ones computer. There is a vast array of trading platforms enabling you to be up and running with an online account usually within minutes and similarly with data feed for which you can either trade technically with charts, or by following fundamentals i.e. analysis of company and sector performance, such as on the Bloomberg TV channel for instance.
I find it easier to focus on charting software and first learn, then adhere to a few simple indicators. There is plenty of choice and you will be able to find something that can cater for you specific swing trading requirements.
As you can see, swing trading is no longer the restricted domain of the professional floor trader. With consistent application, it is available for you and I to grasp. Take things gradually, steadily and methodically because correctly applied, there is a solid part or full time occupation ready for our taking, often so much more reward for so much less time spent in the average working week.
Thursday, August 27, 2009
Thursday, August 13, 2009
Forex Swing Trading Made Easy
By Justin DeMerchant
Forex swing trading is when you take advantage of the ups and downs in the markets by quickly selling currency that is declining in value or quickly buying currency that is going up in value. I know it seems obvious, but this is based on a very important principal:
Things that are going up will keep going up, things that are going down will keep going down (more often than not that is)
If a currency is growing in value the next tick will most likely go up. Losing currency will most likely keep going down on the next tick. The way people can take advantage of this is to basically sit at their computer and buy every time a currency goes up a cent or two, and sell whenever it goes down. This is how forex day traders make their money, and many of them do so very effectively.
The biggest concern with this type of trading is that the brokerage fees can add up to a lot of money, and can eat up a lot of your profit especially if you are trading in smaller amounts of money. The key to combat this is to find a brokerage firm that rewards you with lower fees for traders who make more trades every month. This can save you a pile when you are making hundreds of trades a day.
So in conclusion I would offer a few basic tips. Stick to one currency, one you know. Trade in high amounts so that brokerage fees take up a smaller amount of your profit. Finally don't fall in love with a currency, trade with your brain.
Forex swing trading is when you take advantage of the ups and downs in the markets by quickly selling currency that is declining in value or quickly buying currency that is going up in value. I know it seems obvious, but this is based on a very important principal:
Things that are going up will keep going up, things that are going down will keep going down (more often than not that is)
If a currency is growing in value the next tick will most likely go up. Losing currency will most likely keep going down on the next tick. The way people can take advantage of this is to basically sit at their computer and buy every time a currency goes up a cent or two, and sell whenever it goes down. This is how forex day traders make their money, and many of them do so very effectively.
The biggest concern with this type of trading is that the brokerage fees can add up to a lot of money, and can eat up a lot of your profit especially if you are trading in smaller amounts of money. The key to combat this is to find a brokerage firm that rewards you with lower fees for traders who make more trades every month. This can save you a pile when you are making hundreds of trades a day.
So in conclusion I would offer a few basic tips. Stick to one currency, one you know. Trade in high amounts so that brokerage fees take up a smaller amount of your profit. Finally don't fall in love with a currency, trade with your brain.
How to Profit by Swing Trading in Today's Market
By Brian T Mikes
It's not exactly breaking news. A buy and hold strategy hasn't worked for the last decade. You probably know as much if you've opened your retirement account statement lately. The Dow, S&P 500, and NASDAQ are all flat or down over the last 10 years.
It's time to face facts, the old-time buy a few large-cap blue chips and hold them forever strategy has gone the way of the Dodo bird.
So, what's the answer for this particular market?
Personally I swing. Swing trade that is.
I like swing trading for this market because it takes advantage of momentum... or trading in and out of stocks and sectors that are seeing a temporary boost. There's no 'buy and hope' strategy at play here.
Let's take a look at how swing trading works.
In a nutshell swing trading is... buying the lows and selling the highs. Ok, I know what you're thinking... how do I consistently buy the lows and sell the highs? It seems like it is easier said than done.
Although there's a lot of different ways to approach it, my favorite is looking for technically-based short-term trends. And taking a position to profit from the trend.
Here's something you might not know; swing traders don't care why a stock is trending. If the technical's show there's a trend, it's not your job to figure out why. You just want to profit from it.
But here's the catch... the stock market isn't just flat over the last 10 years. It's flat over the last few months too. Lots of volatility but no real trends.
You may be happy to see a flat market - especially after last year. But for swing traders like me a flat market is worse.
So how do you overcome a flat US market?
By not limiting yourself to just the stock market.
Here's why. You won't always find a trend in the US stock market. So I'll trade foreign markets, bonds, commodities and even currencies. Until recently, access to these markets was difficult and often required separate trading accounts.
In the past, many individual investors found it hard to trade these markets. This helped give rise to the notion that a buy and hold strategy is the best way to invest.
Now, there's an easy way to trade US stocks, foreign stocks, bonds, commodities, and currencies using momentum. It's quick, cheap, painless and you can do it all from one trading account.
Want to know what it is?
That's right, ETFs (Exchange Traded Funds). These are the one investment that can give you exposure to all of these markets. Today's ETFs are revolutionizing the ability to trade currencies, commodities, and foreign markets. You can now really drill down and focus on specific subsectors of all these markets.
As I said... follow the trend. If you can't find it in the US stock market, you now have easy access to an entire array of markets with ETFs.
I believe that the big money over the next few months and years will be found in the 'specialty' ETFs that are popping up. The value of these ETFs can be derived from commodities like gold, currency pairs, corporate bonds, and any specific subsector you can think of. The list goes on and on.
And now you can go long or short with two or even three times leverage. Talk about spicing things up!
And remember as a swing trader you don't care why the ETF is trending. The patterns and trends you use as a swing trader hold up regardless of the asset being traded. So you can apply the same technical analysis principles that you use with stocks.
Combining technical analysis, momentum trading, and specialty ETFs isn't a bad way to trade this market right now. And it sure beats the heck out of buying a few blue chips and holding on for dear life!
It's not exactly breaking news. A buy and hold strategy hasn't worked for the last decade. You probably know as much if you've opened your retirement account statement lately. The Dow, S&P 500, and NASDAQ are all flat or down over the last 10 years.
It's time to face facts, the old-time buy a few large-cap blue chips and hold them forever strategy has gone the way of the Dodo bird.
So, what's the answer for this particular market?
Personally I swing. Swing trade that is.
I like swing trading for this market because it takes advantage of momentum... or trading in and out of stocks and sectors that are seeing a temporary boost. There's no 'buy and hope' strategy at play here.
Let's take a look at how swing trading works.
In a nutshell swing trading is... buying the lows and selling the highs. Ok, I know what you're thinking... how do I consistently buy the lows and sell the highs? It seems like it is easier said than done.
Although there's a lot of different ways to approach it, my favorite is looking for technically-based short-term trends. And taking a position to profit from the trend.
Here's something you might not know; swing traders don't care why a stock is trending. If the technical's show there's a trend, it's not your job to figure out why. You just want to profit from it.
But here's the catch... the stock market isn't just flat over the last 10 years. It's flat over the last few months too. Lots of volatility but no real trends.
You may be happy to see a flat market - especially after last year. But for swing traders like me a flat market is worse.
So how do you overcome a flat US market?
By not limiting yourself to just the stock market.
Here's why. You won't always find a trend in the US stock market. So I'll trade foreign markets, bonds, commodities and even currencies. Until recently, access to these markets was difficult and often required separate trading accounts.
In the past, many individual investors found it hard to trade these markets. This helped give rise to the notion that a buy and hold strategy is the best way to invest.
Now, there's an easy way to trade US stocks, foreign stocks, bonds, commodities, and currencies using momentum. It's quick, cheap, painless and you can do it all from one trading account.
Want to know what it is?
That's right, ETFs (Exchange Traded Funds). These are the one investment that can give you exposure to all of these markets. Today's ETFs are revolutionizing the ability to trade currencies, commodities, and foreign markets. You can now really drill down and focus on specific subsectors of all these markets.
As I said... follow the trend. If you can't find it in the US stock market, you now have easy access to an entire array of markets with ETFs.
I believe that the big money over the next few months and years will be found in the 'specialty' ETFs that are popping up. The value of these ETFs can be derived from commodities like gold, currency pairs, corporate bonds, and any specific subsector you can think of. The list goes on and on.
And now you can go long or short with two or even three times leverage. Talk about spicing things up!
And remember as a swing trader you don't care why the ETF is trending. The patterns and trends you use as a swing trader hold up regardless of the asset being traded. So you can apply the same technical analysis principles that you use with stocks.
Combining technical analysis, momentum trading, and specialty ETFs isn't a bad way to trade this market right now. And it sure beats the heck out of buying a few blue chips and holding on for dear life!
Tuesday, August 4, 2009
What is the Best Swing Trading Indicator?
By Jolon Warren
Swing traders could not ask for much more than an indicator that could offer the chance of knowing in advance when the market they were trading was at its breaking point. If you could know in advance when a market was ready to turn, this would greatly increase your chances as a trader of entering into a profitable trade. Luckily, such indicators already exist and when used properly they offer to give you an enormous edge while trading. These indicators are known as momentum indicators.
While many indicators are lagging, momentum indicators are leading. Put simply, they offer a glimpse at future price movement before it has occurred. Momentum indicators work on the basis of measuring a currency pair's level of momentum. As a currency pair begins to slow down and lose speed or momentum, the indicators warn of this and alert traders that a possible retracement in future price movement may be about to happen. By plotting a currency pair's momentum, a trader can know in advance when markets may be preparing to pull back.
One such momentum indicator is called the RSI. The RSI (relative strength indicator) shows levels of a currency pair that are considered overbought or oversold. When the indicator is in these areas, a trader should be on the lookout for potential price retracement. When a currency pair goes into overbought or oversold, there is a fairly good chance that it will retrace in order to adjust to the new price levels before it continues. By knowing in advance when this may happen, traders can close trades out early and lock in profits before they are wiped away and lost forever in the retracement.
Swing traders could not ask for much more than an indicator that could offer the chance of knowing in advance when the market they were trading was at its breaking point. If you could know in advance when a market was ready to turn, this would greatly increase your chances as a trader of entering into a profitable trade. Luckily, such indicators already exist and when used properly they offer to give you an enormous edge while trading. These indicators are known as momentum indicators.
While many indicators are lagging, momentum indicators are leading. Put simply, they offer a glimpse at future price movement before it has occurred. Momentum indicators work on the basis of measuring a currency pair's level of momentum. As a currency pair begins to slow down and lose speed or momentum, the indicators warn of this and alert traders that a possible retracement in future price movement may be about to happen. By plotting a currency pair's momentum, a trader can know in advance when markets may be preparing to pull back.
One such momentum indicator is called the RSI. The RSI (relative strength indicator) shows levels of a currency pair that are considered overbought or oversold. When the indicator is in these areas, a trader should be on the lookout for potential price retracement. When a currency pair goes into overbought or oversold, there is a fairly good chance that it will retrace in order to adjust to the new price levels before it continues. By knowing in advance when this may happen, traders can close trades out early and lock in profits before they are wiped away and lost forever in the retracement.
Forex Swing Trading For Beginners
By Jayda Kaycee
Forex swing trading can be a great way to get high rewards with low risk, but if not executed or understood correctly can make you lose, and lose big. To keep this from happening to you, we will discuss a method of swing trading that can give you the low risk you are looking for with a higher reward than conventional methods. Essentially swing trading watches for corrections in value and takes advantage of them This generally happens for two to five days.
Many traders make the mistake of thinking they can use the swing trade technique daily, but this is not a good idea and you can lose equity quickly. Instead reserve forex swing trading for days when the market is just right for swing trading. So, how do you know when the market is right? Watch for resistance or support that has been held several times like when the chart is high or low. Watch the momentum and look for when prices swing strongly toward either the resistance or the support, while this is happening watch for confirmation that the momentum will turn. This confirmation is critical and if the momentum of the price is starting to wane and a turn is likely, then the odds are in great favor of a swing trading environment.
Use the stochastic indicator as one of the best ways to watch for this. This is a visual indicator. An example of this indicator is when the market starts trending toward resistance; the stochastic lines should point upward. Is the market is swinging down the lines will reflect this. When the lines cross either on the up or down travel, then this is when you take the trade according the when and where the lines cross. When they cross and are pointing up, this usually means to buy. When they cross pointing down, sell. Using a free charting service like www.futuresource.com is a great way to keep track of this method.
Once the trade you want during the swing is entered, you need a target to anchor it. The Bollinger band can be used for this. When the prices swing back to the middle, this can be target. Set a target and move out quickly. A standard swing can last for two to four trading days and should be taken advantage of when all the signs are present and not used when they are not.
Forex swing trading can be a great way to get high rewards with low risk, but if not executed or understood correctly can make you lose, and lose big. To keep this from happening to you, we will discuss a method of swing trading that can give you the low risk you are looking for with a higher reward than conventional methods. Essentially swing trading watches for corrections in value and takes advantage of them This generally happens for two to five days.
Many traders make the mistake of thinking they can use the swing trade technique daily, but this is not a good idea and you can lose equity quickly. Instead reserve forex swing trading for days when the market is just right for swing trading. So, how do you know when the market is right? Watch for resistance or support that has been held several times like when the chart is high or low. Watch the momentum and look for when prices swing strongly toward either the resistance or the support, while this is happening watch for confirmation that the momentum will turn. This confirmation is critical and if the momentum of the price is starting to wane and a turn is likely, then the odds are in great favor of a swing trading environment.
Use the stochastic indicator as one of the best ways to watch for this. This is a visual indicator. An example of this indicator is when the market starts trending toward resistance; the stochastic lines should point upward. Is the market is swinging down the lines will reflect this. When the lines cross either on the up or down travel, then this is when you take the trade according the when and where the lines cross. When they cross and are pointing up, this usually means to buy. When they cross pointing down, sell. Using a free charting service like www.futuresource.com is a great way to keep track of this method.
Once the trade you want during the swing is entered, you need a target to anchor it. The Bollinger band can be used for this. When the prices swing back to the middle, this can be target. Set a target and move out quickly. A standard swing can last for two to four trading days and should be taken advantage of when all the signs are present and not used when they are not.
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