What is Swing Trading?

Swing trading is a trading strategy that uses technical analysis to identify a swing point where the market is trying to hold a predefined barrier ( see the charts below for some examples). This could be a trading channel or support and resistance points, but in our case, we a looking for a point where price has shown that supply was overtaken by demand.

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Our trades are normally held less than a day. This trading style requires a bit less discipline than day trading but you are not going to hold a long term position.  Swing trading strategies often work like this: let’s say that the EUR/USD is identified as having a support level at 1.3545 and  a resistance level at 1.3645. If the pair is trending to the upside and if the EUR is currently at 1.3565, then the trader may want to buy the EUR/USD at 1.3545 if it pulls back to this identified support level. When the market moves toward its resistance level at 1.3565, the trader may scale out and move his/her stop to a no-lose position and let the trade run to it’s target.

OTT has establish a set of objective rules for buying and selling. These rules are used to create a predictive market trading algorithm which is the basis our trading system. OTT trade rules use technical analysis to find entry, exit and stop loss points on the currency pair we are trading. As with any trading or investment, timing plays a key role in success.

Knowing when to execute a trade is usually the most challenging part of trading. Swing trading, however, does not require perfect timing or the impossible feat of buying at the absolute bottom and selling at the very top in order to turn a profit. Instead the swing trader will focus on compounding smaller returns by using very strict money management rules. It should be noted that all trading systems or algorithms will not always work with every currency pair or in every market situation. Breaking news or events can quickly change the way you should look at the market.

Swing Trading Risks

Swing trading is actually one of the best trading styles for the beginning trader while it offers significant profit potential for intermediate and advanced traders as well. If you find trend trading takes too long and day trading is too frantic, then swing trading maybe the trading style for you.

Risk of loss will always be present when a trader speculates in any market.

Only $49.99 a month that! With the No Pips No Pay Guarantee.