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Forex Swing Trading Guide

Forex swing trading involves attempting to profit from swings in currency market prices that typically last a few days to a few weeks. The document provides a 6 step process for swing trading: 1) use daily charts, 2) draw support and resistance levels, 3) evaluate momentum, 4) watch for entry signals, 5) identify exit points, and 6) calculate and manage risk. It also describes when swing trading may or may not be a good fit for different trading styles.

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Mohamed Saabkey Haaji
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516 views6 pages

Forex Swing Trading Guide

Forex swing trading involves attempting to profit from swings in currency market prices that typically last a few days to a few weeks. The document provides a 6 step process for swing trading: 1) use daily charts, 2) draw support and resistance levels, 3) evaluate momentum, 4) watch for entry signals, 5) identify exit points, and 6) calculate and manage risk. It also describes when swing trading may or may not be a good fit for different trading styles.

Uploaded by

Mohamed Saabkey Haaji
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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FOREX SWING TRADING

Cheat Sheet

Forex swing trading is a style of trading whereby the trader attempts to profit from
the swings in the market.

These swings usually last anywhere from a few days to a few weeks.

The two main parts of each swing are called the body and the swing (turning) point.

The goal of every swing trader is to profit from the momentum within the swing
body.

In other words, buy low and sell high.


STEP #1

Move to the Daily Time Frame


The daily time frame produces some of the most reliable signals. It
makes sense then to use the daily when swing trading the Forex market.

Be sure to use a New York close chart. Each session should close at 5
pm EST. If yours don't, you aren't using a New York close chart.

Not all Forex brokers offer these charts. Be sure to ask your broker if you
aren't sure. You can also find a list of brokers at the link below.

Why New York Close Charts Matter to Forex Traders

STEP #2

Draw Key Support and Resistance Levels


Using the highs and lows in the market, draw the key support and
resistance levels.

The two types of levels you should identify are:

Horizontal levels and,
Trend lines

See the two links below to learn how to draw both types of levels.

How to Draw Key Support and Resistance

How to Draw Trend Lines


STEP #3

Evaluate Momentum
If the market is making higher highs and higher lows, it's in an uptrend.

If the market is making lower highs and lower lows, it's in a downtrend.
STEP #4

Watch for Price Action Signals


Now that you've identified key support and resistance and evaluated the
momentum, it's time to look for opportunities.

During an uptrend, scan for buy signals from key support.

During a downtrend, scan for sell signals from resistance.


STEP #5

Identify Exit Points


For bullish (buy) setups, use the next key resistance level. This is usually
the previous swing high.

For bearish (sell) setups, use the next key support level. This is usually
the previous swing low.
STEP #6

Calculate and Manage Risk


Last but not least, you need to calculate and then manage your risk.

Be sure to calculate your risk before you enter using this calculator:
Forex Position Size Calculator

The lesson below will show you how to use R-multiples and asymmetry
to help stack the odds in your favor.
Using a Favorable Risk to Reward Ratio (R-Multiples & Asymmetry)

Is Forex Swing Trading Right for You?


If you're still on the fence about whether or not swing trading is right for
you, the following key points will help you decide.

You might want to be a Forex swing trader if:

You don't mind holding trades for several days


You want more freedom with your time
You don't mind taking fewer trades but making more on each one
You're looking for a slower paced style of trading
You have a full-time job or school to attend

You might NOT want to be a Forex swing trader if:

You're looking for an action-packed style of trading


You don't mind making a small amount on each position
You can't stand the idea of holding positions overnight
You need to know if you're right or wrong immediately
You get anxious when trades go against you

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