How to start Swingtrading?

Hello everyone!

I am new to the world of Forex trading. I have been day trading for si months now without much success.

The real problem is that I have a regular evening job, and by the time I get up in the morning, most of the big moves are already long started. So most of the time moves reverses on me or volatility drop.

I went thru the usual noob Indicator phase with charts looking like messes.

Now i trade using only Bollinger bands, Stochastic and Murreys Math.

I want to make the jump to swingtrading and get my life back cause I’m going nuts stearing hours at my computer screen.

Is it possible to be as consistant swingtrading than daytrading??

One of the problem is the psychology of ST. The swings sometime looks impressively big.

I have tried few time to enter trade on a daily chart but just could’nt push the button.

What is the best way to start Swingtrading??
I started studying Ichimoku Kinko Hyo. I find it to be a well constructed method.

I am daytrading 3 currencies only. Should I watch more when Swingtading to get better chances for an entry signal??

Thanks everyone!

When you say you couldn’t push the button, I assume you have to much risk involved and are to emotionally attached to your trades. Trade with really low risk till you find a suitable strategy that builds you a track record (or demo), then up the risk if youd like. Personally I swing trade off the daily and 4hr charts. Only thing i use is a 4hr or daily chart with fractals, SR levels I Hand draw. and Possibly some Fibs.

Just my thoughts. Goodluck piphunting.

If you have a demanding day job, then swing is the way to go. Like Joe mentions above, the risk is probably way too big if you are afraid to enter trades. I would try trading with Oanda and trading nano lots on the Java platform. That way, you can tailor the risk, so you are still only risking 1% of your account, no matter how big the stop is.

Hi SimonZed, from the sound of it you are lacking confidence in your trading system. If at any point you can’t ‘push the button’ you should re-evaluate your indicators. Like Hugh said, your risk is probably too large as well.

I also see that you are in Quebec, putting you in the eastern time zone so I’m not sure how a regular evening job would hurt your day trading. Perhaps I am confused or maybe you meant day job. I work during the day so swing trading really appeals to me. I rarely check the charts during the day time and most of my entries are made just after the close of the NY session.

I won’t comment on the indicators you use because we all have our own style and particular setup we like, but before you start swing trading I recommend you try out your indicators with a demo and do some back-testing to make sure it works for you.

Swing trading in my opinion is more psychological than daytrading (I know, I know, the day traders will argue that) since we setup and make our trades then let them go. I only check my trades every other day or so. If you are used to daytrading there are some things you need to be aware of when swing trading like average daily pip movements for the pair you are trading i.e. the EUR/USD has an average movement of 102.91 pips per day over the last 20 days. Swing trading with a stoploss of 50 pips is more than likely going to get you stopped out real quick. You also need to watch the down days, those can be trade killers and are very depressing if you let it get to you. Make your trades based on the solid, proven, indicators of your choice and stick with it. A down day on your pair is not the end of your trade (unless of course you didn’t watch the daily average pip movement and went with a 50 pip S/L :slight_smile: )

I can’t speak for others but as for me I use a particular set of a few indicators; a couple SMA’s, Stochastic oscillator, RSI, Fib once in awhile, and I draw pivot points & S/R lines. As far as pushing the button, I don’t do anything until all of my indicators match up. I start with a weekly chart to get the overall trend and S/R levels, the daily chart indicators are where I decide to get into a trade or not, and the 4hr [I]USUALLY[/I] gives me my best possible entry point.

I hope this was helpful! Good luck!

For those of you who read this I keep a list of average daily pip movements for multiple pairs (updated weekly). You can message me and I’ll link you to my site for the averages if you like.

-d0c

Hello everyone!

Thank your for your replies!!

JoePippin: Yes exactly. What is actually happening is that I try to swingtrade using the same pip value as I do with Intraday. Which is just impossible. One bad trade and it would wipe out most of my account… I will have to use the 2% rules from now on for my Swingtrading.

Hugh: I have an account on Oanda which I don’t use much… I dont really know why because the best thing about Oanda is that you can buy and sell any size lot. Which, like you said, would permit me to tailor my trade and not risk more than 2% even if my SL is 200 pips away.

d0c: The actual problem is with the risk being too high. I understand that now. And will tailor my risks according to my account. I have the most confidence in my method. I trade using Ichimoku, Bollinger Bands, Stochastic Divergence, chart patterns and S+R. It has given me good results on demo account.

No you understand well. I have a evening job. I work from 5 to midnight most of the time. So when I get home, I am in the Asian session. Which hasnt much volatility. Since I get up around 10 in the morning, I missed most of the London/New York session. So when I start trading, the volatility is allready starting to drop due to the closing of the London session. And sometime Girlfriend is home so… no trading… :wink:

Thanks for your insight on ADR and different time frames. Great ideas!

Take care everyone!!

I work 60 hours a week. Swing trading is all I have time for. I would venture to say that there has been less ups and downs as I traded less frequency than there was when I would trade at least every four hours. I might now make a trade every few days and even then I’m still sitting on them for a week or do, depending on price movement and targets.

hi there,

I would love a link to your site just to build up my confidance. i’m quiet new to forex and would like to swing trading ruther then day trading. do you know of a good site that teaches you the best way to swing trade?

THanks

Robert

Hi Robert,
I posted the link to your visitor page. I recommend you find a system that works for you but feel to jump to the site for those daily moving averages.
Personally I don’t have much experience with day-trading so I can’t go in depth about the differences between the two, but you can find a metric ton of information about trading styles here at Babypips. The way I do things is essentially laid out in my previous post. The one thing I can tell you is if you decide to go with swing trading, do yourself a favor and let the trades ride. What I mean by that is do NOT stare at the screen and watch charts all day long. You’ll start second-guessing your trades and it can get ugly.

Good luck

-d0c

Hello Everyone!!

Thanks all for your replies!

Mastergunner99 --> Thanks for your insight. Yes thats exactly the way I need to trade. Once in a while and let it run. I have to rethink the whole process of trading. Actually, all week I didnt day trade and I only looked at daily charts for about an hour everyday. And yet, I feel so much better. I feel like i’m getting my life back. I have so much time to do other things now!

d0c --> Can you PM me the link to your site?? I am interested in taking a look at your site.

I have read in another thread here that someone was wondering why Swingtrading was not that much popular. I am actually wondering the same thing…

SZ

Simon,
I think it may be the fact that we have to let our trades ride. A lot of traders need more excitement than that. Due to the size of stoploss needed for longer term trades, and proper risk management, I can’t have a bunch of trades open all at once. I don’t check my charts every single day, I just don’t have time. All of these things just don’t appeal to most traders from what I gather. The risk is still the same, I’m down 2.5% on the month and it’s only the 4th. Gotta love the string of losses. This happens in all trading styles.

-d0c

On a daily chart draw a trend line and horizontal s/r lines. In a trend, price typically pulls back to the trend line, then continues in the direction of the trend. You want to enter just after the pullback, as price is starting to move back in the direction of the trend.

Look for price to pull back to the trend line, which wants to be backed up by a horizontal s/r line. Use Fib levels for extra confirmation. Price is likely to reverse at this point, so look for a candle/bar reversal pattern to enter a trade.

hi there,

do you have any good strategy that works with good succsess rate for swing trading?

Regards

When I started Forex many years ago(can’t believe I can say many now hehe) Everyone I knew was an intraday/day trader type. Looking back now through all the stops and starts, and all the bumbling and fumbling, I would have seriously looked at Swing trading to start off. The misconception when I started was that higher period time frames 1HR - Weekly Charts meant wider stops and more money, so more risk was necessary. The reality is that day trading and fast charts require much more skill and experience, especially when you’re starting out. You have to make quicker decisions and require much more discipline when executing. Longer time frames give you more time, you’re able to see the larger trend. The most important thing in Forex after money management is knowing the direction of the trend. So to start out swing trading, scale down the positions, start with a micro account if possible.

As far as what system. I’ll have to read the forum rules, I wanted to post a few links and blog stuff, but I don’t want to break any rules. I opened a small micro for my sister last year that grew over 100% just on tiny micro lots, this was just trading support and resistance on dailys, and using Williams Chaos method. It’s not really the trading method, but the management of the risk.

Hi SimonZed,

There’s a great community of swing traders (purely swing trading) hanging out here: 301 Moved Permanently
The thread is a great help and a goldmine of info on profitable swing trading.

Cheers!

Just wanted to share one of the few trading ideas that popped up today. Besides Elliott Wave and BW Chaos Trading, I’ll sometimes take a Harmonic pattern trade. Three more posts and I’ll be able to share the chart. It really does make me feel like a Newbie, only a 10 year Newbie though :slight_smile:

Ok, so even though I’m a newbie, I think I have enough posts to share a chart. Makes me feel real proud. :29:


This is a Bearish Butterfly. Harmonic patterns are embraced by some swing traders. It’s not all I trade, but I do take notice if I see the pattern. As I added in the text, this would be a countertrend trade.

Now why would you trade against the trend, aren’t you asking for trouble?
Short answer: Yes, if you don’t know when to get out. You would trade against the trend here
because you’d be risking near 40 pips to gain 127 pips. 1:3 is not too shabby, especially if the patterns on aaverage are right over 60% of the time, some may even say 70%. To catch a trend early, sometimes you have to catch the trend in it’s early phases. Yes the trend of USD/CAD is up, but if.when that trend changes or ends, in that case you’ll be on the train already not late like everyone else. We won’t know if this is a pullback. If it is, and you’re counterend like in this trade. You’ll get out when it hits the target. If the trend continues upwards you’re not trapped. If this trade hits your stop about 35-40 pips away. That means the trend up is alive and well and you better not be Short without a stop.

Sorry that was suppose to be a short answer. I failed, but wanted to show a Swing trade. This is the 4HR chart by the way. Daily and weekly is fine also. Position sizing is the most important thing. Size accordingly with good risk management.


Update: Wanted to add that $/CAD went +50 pips from entry then reversed, if you didn’t move stop to break even then this would have been stopped out. Being stopped out in this case is not a bad thing, it gives us clues in the structure of the trend. As I mentioned earlier, the Bullish trend is alive and well, we won’t fight it, we’ll go Long and let the trend more than make up for any small loses we took. What we don’t want to do is go heavily short, that’s where the greater risks are, and risks are what
we’re managing, the profits will take care of itself.

Hi there,

do you mind send me another link to that site that you send me before, for some reason i can’t find it. you can put it in your response if you don’t mind.

Thanks

Robert

Swing trading is more of a bit long term trading. I myself combine swing trading with day trading. There are positions that i hold over nigth but most of my trades are day trades

I think swing trading is a good strategy and that is suitable for people who trade Forex for part time or full time. There is a report on the net explaining 3 simple rules that diverse the profitable swing trader and the bad one.

You can read it here.

For those of you who read this I keep a list of average daily pip movements for multiple pairs (updated weekly). You can message me and I’ll link you to my site for the averages if you like.

hi-d0c
please link me to your site for the averages. how do i use the averages to set stops

regards

finjoman