Swing trading for dummies ~ do forex trading robots really work
I have already written a post on the subject and talked about this kind of trading strategy in many of my posts, but I still want to deal with it in this article. Swing trading is type of trading system when a trader keeps his position open from one day to a few weeks. Much depends on the momentum that a security gains from some piece of news or any other fundamental as well as technical factor(s). A lot of day traders ultimately become swing traders as they get disappointed with trading short term trading strategies such as scalping or similar ones.
The key difference from any other day trading style is that a trader who uses swing trading system relies more on long term charts such as: daily, 8 hour, 4 hour and less often on 1 hour, 30 minutes or 15 minute charts. This, as you may understand allows him to avoid various ‘daily market noises’ that are bountiful and concentrate on a bigger picture. If you only look at what happens on this particular day you will never know what caused this or that big move in the market. Maybe some bank unloaded its’ huge position or some crazy piece of news caused traders to buy or sell some particular securities.
In swing trading you want to catch a bigger move and capitalize on it as much as possible. It is very similar to trend trading and in some cases these terms absolutely coincide. However, trend trading refers to bigger moves than market swings and usually last longer. Some traders tend to call any tendency short or long term that is in the market to be a trend. They might be right to some extent, but then we should definitely distinguish between mega and micro trends, because trend traders would follow the former ones and day traders the latter ones.
