TIPS FOR SUCCESSFUL SWING TRADING

Swing trading is a method of trading which aims to take advantage of the swings that price makes as it moves from level to level. Unlike other styles of trading, swing traders usually aim to open and hold a trade for several days to a week. Because of this, there are certain tips or strategies that a trader should implement to take advantage of the movements that price makes.

1. Trade for the long term - Swing trading is a medium long style of trading. Unlike day trading which opens and closes trades within a single day period, swing traders are holding trades for several days. This is necessary to catch and ride the swings as price moves up and down in the market. Holding trades for too short a period of time may result in you getting out too soon before price begins its next swing.

2. Plan your trade and trade your plan - It can't be said enough. Any trader needs to make sure that they have a solid trading plan or strategy before opening any trade. If you don't have a plan then don't trade, at least not live. Spend your time demo trading and developing your own style of trading before you go live.

The best tips for swing trading are to be patient so you can catch the next big price swing and follow a plan. To swing trade effectively, you must be patient and have a proven system that allows you to take advantage of the swings that price makes as it moves along through the market.

BUYING SUPPORT AND SELLING RESISTANCE

Your success in Forex trading also depends on the trading system you use for your trades. One of the most popular trading system use by investors in technical method of trading is buying support and selling resistance. If you don't know about this important system you have the opportunity to learn it now and add it to your trading tools. Though there are variations to the use of this system and different names given to it. Traders use a mixture of different indicators like stochastic oscillator, relative strength index and so on to identify there support and resistance areas. But the base of the concept is still maintained as buying at the support and selling at the resistance zone.


WHAT IS SUPPORT AND RESISTANCE?

As the chart moves up or down, it attains some level where it becomes tired of moving and tends to change its direction of movement. Watch any chart moving up and you will notice that there are are some areas on the chart where the price stops going further up and you will notice that there are some areas on the chart where the price stops going further up but instead, it changes direction to downward movement. Such area(s) is called resistance area. That is the exchange rate (i.e. price) is resisting from further upward movement.

Also when a chart is going down it reaches a point where it will settle from further movement and change its direction of movement from down to up. This area is called the support or rather the bottom. Trader all over the world watch out for these areas to place their trades so, market most of the time follow this concept. Remember i told you that the secret to pipping the Forex market is the ability to gauge the direction most traders will be placing there trades. If most will be selling then the market will go down and if most traders will be buying. then the market is heading up.











This is a USD/CHF chart. This market is trading in a range looking at the chart you will see the resistance and support area which are indicated by red lines. The support area is marked as 1.1816 while the resistance area is marked as 1.1853. A trader who observes these areas will place his trades accordingly and make a nice profit.
Simply place a buy order at the support area as the market move up and enjoy your pips. To sell, your orders will be placed at the resistance area for a good trade.

WHEN THE RESISTANCE AND THE SUPPORT LINE IS BROKEN

Another way to trade support and resistance is to watch when the support and the resistance area is broken. At times it happens that due to some fundamental factors, the market will experience a heavy buying. In that situation instead of the price to reverse at the support and resistance areas, it ignores them and move further down or up respectively. In a situation like this, a trader seeing that the support area is broken will place a sell order because the market will be going further down.

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