Understanding Swing Trading Strategy

There are many Forex trading strategies available in Forex trading , named : Rsi Overbought Oversold Indicator trading, Stochastic Divergence Strategy, Bollinger Band Stochastic Strategy, Donchian'S Channel Breakout System and etc. In this article we will learn about swing trading strategy. In many cases on a short time trading, the Foreign exchange market will trade versus a main trend. These cases can give many chances to either short highs or long dips, if momentum swing reverse into the way of the main market trend. Below we can learn an instance of pair chart trending bearish. In Forex market there have been many chances to determine selling chances as the Forex market gives a short time rally. But, how can we correct determine these opportunity to trade ?

To momentum our trading entry, an oscillator indicator can be used. If a Forex market is in a bearish trend, Forex trader can wait for an technical indicator such as CCI Commodity Channel Index to trade overbought. Overbought gives a situation where the Foreign exchange market may be over causing an technical indicator to trade its upper levels. If you do not like CCI Commodity channel Index indicator, you can use other technical indicator such as Stochastic indicator, Heiken Ashi Reversal, MACD Histogram Signal, OBV Granville, Double Parabolic SAR and etc.

Commodity Channel Index is like to other indicator oscillators, such as Relative Strength Index, in that it describes oversold level and overbought levels for Foreign exchange traders. In the following chart, we can examine that below the -100 level is marked oversold while above the +100 level is marked overbought. The point is to time our entry if market momentum reverses to the bearish side. This intends waiting from the technical indicator to reverse below +100 and start trading lower. Let us view last examples using our formed pair bearish trend.

In the following chart example, we have used the Commodity channel index CCI technical indicator. We will know that there have been a total of 4 chances to short the currency as momentum reversed bearish. The point is to time your entry level as Commodity Channel Index CCi technical indicator trades reverse under +100 determining the summary of our short term bullish move with momentum returning to the Forex markets longer standing trend. As with any trading system such as : Double Moving Average Crossover, Price Channel Breakout, Aroon Indicator Strategies, Diamond Bottom Pattern, Exhaustion Bars, Ichimoku Adx - swings trading needs limiting our loss in case our trend finished. One method to arrange loss is to plot stop loss order over the last swing high. This method in the case that our bearish trend is concluded we exit any trading positions to short at their first convenience.