Month: October 2021

Best Indicators for Swing Trading

AndyLatest News / Latest News / NewsLeave a comment

Best Indicators for Swing Trading

If you want to become a profitable trader, then one of the things that you need to master are the different types of trading. Of course, day trading is one of the most popular type of trading out there which involves placing trades that generally only last for a single day. Now the type of trading that we are here to talk about today is swing trading. In case you have no idea what swing trading is, no worries because we will explain this below in great detail.

Now what we are really here to do today is to talk about the best indicators for swing trading. In case you don’t know what indicators are no worries, because this is something else that we will explain today. The bottom line is that you do need indicators in order to be a profitable trader, and this goes for all types of trading. Whether we are talking by day trading or swing trading. Let’s get right to it and figure out what swing trading is, what indicators are, and what the best swing trading indicators out there are at this time.

So, What is Swing Trading?

OK so I’m like day trading that generally sees trades only being open for a single day. So in trading is a much longer type of trading. Or in other words, trades can last anywhere from a couple of days up to a few months. As you can see, this is a much longer term type of trading that generally involves buying low and selling high.

The aim is to buy a stock asset or security as low as possible and then sell it as high as possible for maximum profits. Of course, these huge profits is something that many people are attracted to. But with that being said, swing trading does leave you vulnerable to overnight and weekend risk. However, the bottom line here is that swing trading can of course be extremely profitable.

Swing Trading Indicators

What’s an Indicator?

Something else that you need to know here is what an indicator is. For those of you who don’t know, an indicator in trading are statistics that are used to measure current market conditions as well as to forecast future economic trends and financial conditions. When it comes to trading and investing, indicators usually always refer to specific technical charge patterns derived from the price, volume, or open interest of a given security.

Technically speaking, there are four different types of indicators out there, and they all provide you with different types of information. The four different types of indicators out there are volume, momentum, trend, and volatility indicators. These are all important pieces of information that traders should be aware of when it comes to placing profitable trades. Of course, with that being said, what we are here to talk about today is what the best indicators for swing trading are.

Some Swing Trading Indicator Criteria

Before we take a look at the best swing trading indicators out there, we do want to provide you with some criteria that will help you choose the best indicators for this type of trading.

  • One of the most important factors to lookout for when choosing an indicator for swing trading is that it is actually easy to understand. These are tools that you need to be able to understand in order to make profitable trades, so if you can’t understand what is going on, then it is a useless indicator. In other words, you need indicators that are simple.
  • Yet another thing to lookout for here when choosing an indicator for swing trading is that you want to use indicators that provide you with different types of information. The more pieces of information an indicator can tell you, the less indicators you need to have open, and this makes things less confusing. Generally speaking, you want indicators that can do three things at the same time, which include determining your entries, determining how you will take profits, and determining your stop loss.
  • The other thing to lookout for here is that you get swing trading indicators that are free to use. There are plenty of free indicators, so there is no point in paying for anything.

The Best Indicators for Swing Trading

Alright, so now that we have figured out what swing trading is, what indicators are and how to choose the best indicators for swing trading. Let’s figure out what the actual three best indicators for swing trading are.

The Zig Zag

If you need an indicator that can help you determine the market structure and will instantly plotted out for you. Then the zigzag indicator is a great one to consider. This indicator works by plotting points on a chart. Whenever a price reverses by a percentage that is greater than the pre chosen variable. This is a great indicator for identifying price trends and it helps to eliminate random price fluctuations and attempts to show trend changes. With that being said, this is an indicator that you want to use in conjunction with price action.

Swing Trading Indicators

Donchian Channel

Specific indicator is ideal for helping you to visualize both the lows and highs on your chart. Depending on the specific time period that you want to look at. It’s all about being able to determine the highest high and the lowest low over a certain amount of time. It’s a great indicator to use because it tells you where potential buy and sell trades are. As you can see on a chart, it looks a lot like a channel with the lower channel being a reference to buy and in upper channel being a reference to cell it’s almost like support and resistance. With that being said, using trending indicators such as moving averages in conjunction with this indicator is recommended.

OHLC

This stands for open high, low close, and it helps us to visualize the lows and highs of a daily candle no matter the time frame. When you see the price forming a bearish candle from the previous day’s highs, you can go short. On the other hand, when you see the price forming a bullish candle from the previous day’s lows, you can go long. This is an important indicator to use because it will provide you with information about trend reversals from daily highs and lows.

Swing Trading Indicators

The Best Swing Trading Indicators – The Bottom Line

Now that you have a basic understanding of what swing trading is, as well as what indicators are plus how to choose the best indicators for swing trading, you should have no problems finding the best possible options for you. We have already listed three of the very best swing trading indicators out there, but there are of course more.

Remember folks, if you need help day trading, and what you need is a comprehensive education, particularly on Forex trading, then the best place to be is the Income Mentor Box Day Trading Academy. At this time, the IMB Academy is the most comprehensive, user friendly, effective, and affordable Forex trading school out there.  

CLICK BELOW TO JOIN INCOME MENTOR BOX AND START MAKING REAL PROFITS! 

Trading with the RSI Indicator

AndyLatest News / Latest News / NewsLeave a comment

Trading with the RSI Indicator

If you are just getting into the world of trading then one of the most important things that you need to be able to master are indicators. When it comes to trading, indicators are extremely useful tools that can provide you with many different types of information. Ultimately, these indicators help you place the most profitable trades possible. What we’re here to talk about today is trading with the RSI indicator. The RSI Indicator is indeed one of the most popular and useful indicators out there.

Now, the fact of the matter is that although the RSI indicator is extremely useful and fairly easy to use, many people actually get it wrong. What we are here to do today is take a much closer look at the RSI indicator to see exactly what type of information it provides you with and how to use it. We also want to take a look at a big mistake that many traders make when using this RSI indicator, and how to avoid this mistake. We’re also going to provide you with many other useful tips for trading with the RSI indicator that you need in order to be successful.

What is the RSI Indicator?

The RSI indicator stands for the relative strength index. Now, in terms of what type of indicator it is, this is a momentum indicator. It was first created by a man named J. Welles Wilder. What you need to know here is that for this particular indicator is designed to measure the momentum or the speed of a price movement.

Some people might refer to this indicator as an oscillator because it oscillates between 0 and 100. What it means here is that the faster a price goes up, the higher that RSI value will be, and the other way around. In case you are wondering what the formula for calculating the RSI is, it is the following.

100 – 100/[1 + RS]

Keep in mind that for this formula, RS stands for the average gain/average loss.

RSI Indicator

How it Works

As you can see, the formula for the RSI indicator is actually fairly simple. We only slightly confusing thing might be the RSI calculation, which is of course the average gain divided by the average loss. What is important to note here is that the RSI indicator will go up when the average gain is very large, or when the average loss is very small.

Something that isn’t course important for you to know is how the value of the average gain goes up, and this is actually quite simple, so when the price of a security moves upwards very quickly and there are little or no pullbacks, the average gain is going to be very large because that price is making positive gains and that leads to a higher RSI value.

On the flip side of the coin, if the price falls very quickly and there are little or no pullbacks, the average loss is going to be very large because the price is making negative gains, and that leads to a lower RSI value. What is also very important to note is that both the average gain and the average loss can be easily manipulated by changing the settings of the relative strength index indicator. For instance, if you use a five period RSI, then the average gain, an average loss will both be based on the last five candles.

Therefore, what is important for you to know here is that the lower your RSI setting periods are, the more sensitive the indicator will be to recent price movements. Moreover, if you use a longer time period for the relative strength index, then the price will not be as sensitive to the motions and movements.

RSI Indicator

The RSI Mistake that Many Make

Something else that is important for you to know is that when the relative strength index is below 30, an asset is considered to be oversold. If the relative strength index is over 70, then an asset is considered overbought. So when the RSI indicates that an insecurity is oversold, many people think that the market can’t possibly go any lower, so they hit the buy button and go along.

Well, this can actually be a big mistake. This is because the RSI indicator actually measures the momentum of a market. It’s important to note that the RSI, if it is oversold, it signals that there is a strong bearish momentum, and if it is overbought then there is a strong bullish momentum.

Therefore, the big mistake that many traders make is blindly making a buy trade because there is strong bearish momentum or many people also hit the sell button because of the price seems way too high. The bottom line here is that don’t make the mistake of buying a security just because the RSI says that it is oversold, because the bottom line is that it can always be more oversold.

Using the Relative Strength Index to Win Trades

Technically speaking, the relative strength index indicator measures the average gain to loss ratio over a certain period of time to help determine the momentum in a market. A simple example of this is that if the relative strength index is above 50, it means that the average gain is greater than the average loss. So how exactly can you use the RSI indicator to help you win trades? Well, the bottom line is that the RSI indicator makes for an awesome trend filter that will provide you with information on whether you should buy or sell. Follow the examples as listed below in order to place the best profitable trades.

  1. A great idea is to adjust the period you are 200. So, you can easily identify the average gain versus the average loss over a very long period of time.
  2. If you see that the 200. Relative strength index is over 50, then the market is very likely in an uptrend, so you want to place buy trades, and on the other hand if the RSI is below 50, then the market is likely trending downwards, which means that you want to place sell trades.

RSI Indicator

Bottom Line on the RSI Indicator

Although there is of course a lot more information about the relative strength index, or RSI indicator, that you need to know, the bottom line is that we have provided you with a basic foundation of knowledge that you should be able to build upon. Keep in mind that the RSI indicator is one of the bold best momentum indicators out there, and it can help you enter trades with great confidence.

Remember folks, if you need help day trading, and what you need is a comprehensive education, particularly on Forex trading, then the best place to be is the Income Mentor Box Day Trading Academy. At this time, the IMB Academy is the most comprehensive, user friendly, effective, and affordable Forex trading school out there.  

CLICK BELOW TO JOIN INCOME MENTOR BOX AND START MAKING REAL PROFITS!