Swing Trading For Profit a Live Example

Swing trading is one of the best ways to make money i
n forex trading, it's also a lot easier psychologically than
trend following.
It's therefore a great way to trade for novice traders.
Over the last few weeks we have looked at some live examples:
Banked 4 profits, scratched one trade at break even
and have one open. Let's look at it and another potential
opportunity.
First why is swing trading an easy way to trade?
When we say is easy, we mean psychologically.
You get in quick with low pre defined risk and you're normally
out in 2 - 5 days with a good profit.
This is much easier than long term trend following, in that
you do not have to wait for months and see dips eat into
your open profit.
Long term trend following is highly profitable but requires a
lot more discipline.
We personally mix the two ways of trading to gain some
diversification
of style and smooth the equity curve.
Swing trading basics
We normally look for important chart support and resistance
and trade contrary to it.
We wait for prices to test these areas and watch for stochastic
momentum to fall against resistance or rise against support.
Then we know the level has held and trade off it.
We also use RSI and Bollinger bands to define targets
and that's it.
Nice ands simple, but can be very profitable you can r
ead more about
this method in our other articles.
British Pound
We are short at recent nearby highs and would look for a pop to the
downside to Fridays low or near the middle of the Bollinger band.
Stochastic is weak at present and odds favor a bit more to the
downside.
With swing trading you don't want to hang around to long, get out on
specific target and that's very close now.
Another opportunity
Lets look at another potential opportunity that's could be shaping up.
The euro is trading near its highs and the spike high on the chart is
resistance. Stochastic momentum is waning and a cross with bearish
divergence will put the odds in favor of the bears.
The important point is to wait for confirmation of the crossover -
the target is then Fridays low just above the middle of the center of
the Bollinger band.
Finally
The tools used swing trade are simple and easy to use, but that
doesn't mean they can't make profits as we have shown.
Importantly, for novice traders the discipline needed to trade this
way is a lot easier.
If you practice a bit and learn to spot the set ups you will soon be
able to spot some great low risk high reward trades - Good Luck