Forex Trading At Favorable Pricing

It is every Forex traders dream to buy a currency pair at the lowest price possible and then sell at the exact closing high. If we had this ability we could have capitalized on every last pip in the

GBPJPY

daily uptrend pictured below! While this is something we as traders aspire to do, it’s not always possible. The next best thing is to take advantage of market swings within an existing trend. So what is Swing trading and how does it work?

• 
  Swing Trading
  
• 
  Timing Entries
  
• 
  Trading Tips
  

Trading the Swing

Swing traders keep this buy low sell high mentality, and look to take advantage of dips in the market. While swing traders realize they may not identify the exact high or low of their favorite currency pair, they can enter into the market at a favorable price as the market temporarily dips. Normally this is done through trend identification and an entry mechanism like an oscillator.

To time out entry into the market, an oscillator such as Stochastics, MACD,

RSI

or CCI can be employed. The trick is to buy into an uptrend after a decline on short term bearish momentum. Below we can see a Stochastic oscillator in use on the daily chart. Trader will wait for momentum to turn bullish after the %k line returns from an oversold value beneath 20. The objective is to buy into an existing uptrend, at the lowest possible price. This way the Swing trader is ready to sell high, when their profit projections are met.

Learn Forex – GBPJPY Retracement Swings

(Created using FXCM’s Marketscope 2.0 charts)

Final Trading Tips

Swing trading can be a very natural and intuitive way to approach markets. Buy high, sell low. Seems easy right? However, traders will have to remain patient and wait for a swing to occur. While our first instinct may be to jump in to the first trend we see, we should always wait for an appropriate entry signal prior to execution. This will allow us to maximize potential returns by consistently entering into trends at favorable

prices

.

As with any trading strategy, traders should always utilize a

stop order

on their positions. In the event that an existing trend comes to an end, traders will look to close any existing directional trades.

—Written by Walker England, Trading Instructor

To contact Walker, email

[email protected]

. Follow me on Twitter at @WEnglandFX.

To be added to Walker’s e-mail distribution list,


CLICK HERE


and enter in your email information.

Become a Smarter Trader Today!

Claim your FREE universal membership to Internet Courses

& save yourself hours in figuring out what FOREX trading is all about.

You’ll get this FREE 20 minute

“New to FX”

course presented by

Education

. In the course, you will learn about the basics of a FOREX transaction, what leverage is, and how to determine an appropriate amount of leverage for your trading.

You can

instantly register for free here

to start your FOREX learning now!

Here’s another great resource if you’re new to FX?

Watch this video