Forex swing trading is easy to learn and understand and can make you a triple digit
income quickly; in this article we will look at the basics of swing trading and how to put together a strategy which can help you make big gains with low risk.
Forex trading is based on the principle that short term price spikes don't last and are the product of greed or fear. Humans push prices to far in the short term away from fundamental value and then, prices come back to more realistic levels. You can see short term price spikes up or down to overbought or oversold levels on any chart, on any currency chart.
Here are the steps you need to follow when swing trading:
Look for a short term price spike to occur and check some momentum and volatility oscillators to see how overbought prices have become.
Good indicators to use are Bollinger Bands to see volatility and for momentum use the MACD, Stochastic and Relative Strength Index. You can learn these indcators in an hour or so each and they will give you a visual picture of how overbought prices are.
If prices are overbought wait for the oscillator to diverge from price I.E the price is still rising but the indicator is falling and get short and put a stop above nearby resistance
Choose a target and look to take profit just above it, don't run swing trades! Swing trading is hit and run trading and you want to take profit before support is tested, in case prices recoil back against you.
You can experiment with the indicators given and there are many more but don't use too many 3 indicators is enough - if you use to many, you will complicate your system and it will have to many elements to break; the best swing trading strategies are simple so don't work harder than you need too.
Swing trading is easy and fun to do, you can put a strategy together in a week or two and soon be making triple digit gains in around 30 minutes day and enjoying a great second income.