Forex swing trading is a mechanical trading method that harvests gains from forex pairs over periods of one to several days. Some forex swing trading strategies produce ho-hum results in trendless markets. Yet, I’ve found that a strategy based on 34-day exponential moving averages works well, even during range-bound sideways markets. With the forex swing trading strategy described below, I use my mechanical trading system to take advantage of short term price trends forex trading system pictures patterns that I might otherwise miss out on.
The direction of the swing trade can be either long or short. Forex swing trading positions are usually held for a longer period than a day-trade, but for less time than buy-and-hold strategies which involve holding positions for weeks or months. Forex swing trading offers an ideal mechanical trading strategy for independent traders like me, since my algo trading system can quickly recognize and exploit short-term price movements more effectively than large institutional traders can. And, forex swing trading is better than day trading or long-term trend trading. Here’s my reasoning: Although day trading can be good for risk management since the trader doesn’t hold positions overnight, it also limits the profit potential, since large price moves can occur overnight.
Trend trading may capture the profits of longer-term price moves, yet it also puts the trader in a position of facing worrisome drawdowns while awaiting the anticipated continuation of a trend. Forex swing trading offers the best of both worlds: It has the advantages of trend trading and day trading, but without the drawbacks of either method. The twenty-four-hourly nature of currency markets is ideal for swing trading. With my mechanical trading system, I enjoy a great compromise between the two extremes of day trading and trend trading. I find short-term trends in the forex markets, ride them to profitability, then I exit my position right when the price move ends. My mechanical trading system harvests small but consistent gains which add up over time.
Even in an apparently-trendless market, I can still be successful. My trades are based on automatic data analysis in real time, and my trading algos provide super-fast trade executions. Best of all, my trading decisions are based on objective parameters instead of relying on my emotions about a particular market. Through the magic of a mechanical trading system which uses the best indicators and effective algorithms, I don’t need to have perfect timing. Forex swing trading can be based on a simple set of rules, or you can program your mechanical trading system to use a somewhat more sophisticated set of rules, as I do. In forex swing trading, my mechanical trading system uses a set of mathematical rules and indicators for buying and selling forex pairs.
By relying on my mechanical trading system rather than manual trading, I enjoy several benefits. Among the simplest approaches are those which measure the price of a forex pair by using 3 different moving averages based on closing prices. 3 moving averages become aligned in an upward direction. 3 moving averages are heading downward. How my forex swing trading strategy worksI use a forex swing trading strategy that lets me take advantage of fairly short-term price moves, so I can profit even in an overall trendless market. I have a reliable and dependable short-term trendline-breakout strategy, and it can harvest quite a few pips from the typical winning trade.