Tag: what is swing trading

Best Indicators for Swing Trading

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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.  

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Swing Trading for Beginners 2020

Fabian FabianLatest News / Latest News / NewsLeave a comment

Swing Trading for Beginners 2020

Today we are here to talk about swing trading for beginners, a little introduction to let you know what it is all about. When it comes to trading the markets, whether stocks, crypto, Forex, or otherwise, making a profit can be very challenging. In fact, making money is much harder than losing it.

What this means is that you need to discover a way to trade that actually works for you, something relatively simple that can put money in your pocket. One type of trading that you might want to familiarize yourself with is swing trading.

Swing trading is a special type of trading, and no, it is not the same as day trading. Swing trading involved executing positions over fairly long time frames, anywhere from a few days to a few weeks.

The point of this type of trading is to make a profit when the price of an asset swings up or down. Sure, there is more to it than this, but this is what we are here for today, to provide you with a little swing trading for beginners 2020 guide. Let’s get right to it!

Swing Trading

Swing Trading Explained – The Basics

What we want to make clear right from the beginning is that although swing trading might seem a bit intimidating, it is actually quite easy to master. Most people find that due to the long time frames which positions are open for, it’s actually a much more relaxed way to make money in the markets. For those of you who don’t know, the number one goal of swing trading is to identify market trends and trend reversals, and then to capitalize on them.

The reason it is called swing trading is because the number one goal is to make money when the price of something, say a currency pair, swings up or down. In other words, it is all about capitalizing on the reversal of a particular price in order to make a healthy profit. For the most part, pro traders will stick to intermediate or long time frames, sometimes as little as 3 days, and sometimes as much as a full month, or even longer.

Something else that you need to know about this type of trading is that it involves using a variety of technical indicators in order to identify both trends and trend reversal. More often than not, these trend indicators are used to find trends that occur in the previous 3 to 15 periods of trading. The point of this whole exercise is to identify areas of support and resistant, which can then identify trends and possible trend reversals. Keep in mind that swing trading combines various aspects of day trading with position trading, particularly the speed of position trading.

The goal of using these technical indicators is to find both bullish and bearish trends, and then to look for reversal to those trends. Keep in mind that reversals can also be referred to as counter-trends or pullbacks. Once you have identified a reversal, you can then use various methods to find the ideal entry points for positions. It’s all about entering a trend right before a reversal, and then to capitalize on said reversal.

The 4 Benefits of Swing Trading

Now, you might be wondering why you would engage in swing trading, as opposed to something like day trading. Well, the fact of the matter is that there are a few key benefits to this type of trading that you might not know about.

No Wasting Time

When it comes to other types of trading, such as day trading, as well as scalping, you have to constantly be paying attention to your positions. You need to be glued to your monitor in the event that something doesn’t go your way. However, this is not the case with swing trading.

Due to the fact that the time frames for these trades are so long, you don’t have to constantly monitor your trades. Yes, you do still want to keep an eye on things, but you don’t need to have your account or trading platform open 24/7.

Simply put, swing trading tends to be much less stressful due to the long time frames, and therefore it’s much easier for beginners to keep track of.

Eliminating Market Noise

Another reason why you might want to consider swing trading as your primary method of making money on the market is because it goes a long way in eliminating market noise. No, it does not get rid of all market noise, but it certainly helps.

For those of you who don’t know, market noise is defined as data, financial news, or minor price movements which can distract investors and traders from the underlying value of an asset. This is not a good thing, and the less noise you suffer from, the better your end result will be.

Less Risk & More Reward

Another thing which many professionals enjoy about this type of trading is the fact that it involves slightly less risk compared to a higher reward. Other types of trading, such as day trading and scalping, although they can bring great rewards, are also quite risky to partake in. However, swing trading is less risky and offers great rewards, thus making it ideal for beginners.

Using Technical Indicators

The other reason why you might want to consider swinging your trades is because it relies solely on technical indicators to put strategies together. Using technical indicators, when used the right way, can be extremely reliable, thus increasing your chances of making a profit.

However, there are many other types of trading out there which rely much more on speculation. Speculation is fine if you are an experienced trader, but not if you are a newbie.

Swing Trading Explained – Final Thoughts

The bottom line is that if done right, swing trading can be a relatively safe, stress free, and low risk way to make decent profits. If you would like to find out more about swing trading, we recommend checking out the Income Mentor Box Day Trading Academy, as well as Andrew’s Trading Channel on YouTube!

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