I’ve been reading Naked Forex by Nikritin and The Black Book of Forex Trading by Langer, and I like the simplicity of both strategies.
To distill it down, it seems like what they recommend is to just understand the major support and resistance zones of a currency pair and then wait for a reversal or breakout pattern (engulfing candle) and then enter the trade using your risk management rules.
I’ve read a lot lately, and it’s been overwhelming, so I really appreciate the simplicity of this. I’m not looking to be glued to a monitor all day for scalping or intraday trading, but would prefer to make each day an analysis of the charts and determine if a setup opportunity is presenting itself and then make a decision to enter a trade or not (so more swing trading).
This is a classic approach, it’s the sort of thing that doesn’t get a lot of internet or Youtube profile because it is centuies old and unlikely to get a supercar delivered to your front door within 30 days. But keep using it, because you don’t sound like the sort of new trader who rates their success by either having a super car or not having a supercar within the next 30 days.
I feel sure that aspiring traders doing the kind of thing that you’re doing are, collectively, doing far better than the majority who are trying to use multiple indicator combinations!
(I haven’t seen Langer’s book, but Nekritin & Peters is ideal.)
I’ve also read that book, and I’m currently backtesting a strategy on the D1 timeframe using historical data. The only thing that discourages me is that it can take days or even weeks before I get a trade setup. For example, I entered a trade on November 27, 2012, and closed it with a profit of 191 pips on December 18, 2012—almost three weeks later. My next trade was on June 20, 2013, and I took a profit of 146 pips on June 27, 2013.
Two trades in half a year seem very few. To be fair, I might have been overly cautious, but still—how do other swing traders manage this? Do they trade multiple currency pairs at the same time?
I haven’t tried it yet. I started with Forex only recently, so I’m still learning. Right now, I’m in the process of finding a suitable strategy. The Big Shadow pattern, which I’m currently testing, isn’t recommended for lower timeframes due to increased market noise, but I plan to test it on H2 and H3 as well.
I don’t want to spend hours at the computer every day, so swing trading seems like a good choice. On the other hand, I don’t want to take just one trade per month—that would bore me to death Ideally, I’d like to have a strategy with several trade opportunities per week.
I’d appreciate any advice on getting started with swing trading.
No problem. I’m looking for a strategy that provides multiple trade opportunities per week, but I still prefer swing trading over day trading. Some swing trading strategies have lower trade frequency, maybe just a few trades per month, while others allow for more setups per week. I’m aiming for a balance—holding trades for a few days but still getting enough opportunities to stay active in the market.
It’s not just you. It confuses loads of people, but it’s only a semantic (“use of words”) confusion, @AnnaProbably.
The established trading textbooks (from which I think you’re wisely learning?) all stress that swing trading isn’t related to timeframes at all, and they naturally include examples of intraday swing trading. In fact, all the swing traders I happen to know myself are actually intraday swing traders. As are many others, of course, including both retail and institutional traders.
But in some beginners’ forums, and doubtless on Youtube, some people nowadays seem to use the term “swing trading” just to mean “slower than intraday”. So for them it is related to the timeframe. In fact they’re maybe even defining what swing-trading is more or less according to the chart-speed. I think that explains your confusion? (It confused the hell out of me, too, when I first looked in forums, and English is my first language!).
Actually this is not simple by any means! let me tell you why.
How would you define and find these zones, this is a very hard thing to find major zones and each trader defines them in his own way.
Again you should define what you consider break out and what you consider reversal also on what time frame, do you only wait for engulfing and you do not consider other patterns?
Also for this, you should just chick longer time frames, like daily and h4 maybe, or daily and weekly
Adding more instruments sounds good in theory, but it also means spreading focus too thin. Quality over quantity, always. As for timeframes, yeah, lower ones can help, but they also bring more noise and fakeouts.
As a beginner, I’m currently focusing on just one pair, as widely recommended. As Oli_jackson mentioned, lower timeframes bring more noise and fakeouts, but I’ll give them a try and test them out.
I always place the buy stop a few pips above the high of the
bullish candlestick or sell stop a few pips below the bearish candlestick.
I haven’t ever really done scalping - I’m no good at watching price on screens on short TFs. So I’ve often wondered whether it is actually easier in slow, directionless markets or in more active movements.
Honestly I prefer scalping in more active market or during major news events. Otherwise it just becomes a head scratching exercise in the slow markets, wondering where the movement will be.
Ideally, I’d like to have a strategy with several trade opportunities per week.
