Swing trading the FX

Discussion in 'Forex' started by chesstrader, Sep 3, 2005.

  1. Hi all,

    I am quite astonished since in the several threads I read nobody seemed really convinced that trading the FX on a Swing basis using weekly/daily and hourly charts was the way to do it????

    I really found the trends on the major currencies very easy to trade and moreover you don't need to waste your time on scalping or day trading since you have all the tools required to manage your risks as opposed to the stock market where gaps are numerous....

    Moreover, it's also a good way to diminish the cost of the spread which is quite high for a day trading strategy.

    So on the Fx it is possible to search for nice reversals or trends on a daily, weekly basis and then try looking at the hourly charts to find good entry points with a controlled risk..... and you may put some limit orders for your exit just below some major resistances or supports....

    You also need to watch at the chart just once a day and make a game plan that you will apply when the market conditions are good or place a limit order linked to a stop order if you believe that the market will retrace to a certain level at that it will be the best entry point ....

    I also noticed that on the FX markets supports and resistances worked very well but that on certain occasion that a false breakout of a support or a resistance leads to very good results for a contrarian strategy....

    I would be very happy to hear your comments on this subject.
  2. mahras2


    Yes it is possible. That is what I personally do to trade. One of the key factors in FX is its fast pace. You must be on your toes and monitor your position 24/7. This is very important as it is possible that at any time some central banker or some big news will hit the market leaving your trade in the balance. For this reason many people venture into day trading instead.
    To be honest personally I do not think I could trade based on Weekly/daily timeframes if it wasnt for the fact that I am fully automated. It would be much harder for me to control me trades manually.
  3. Great happy to hear it !!!!
    Have you been doing it for a long time???
  4. mahras2


    Been working on one of the strategies I use since February. IT is basically a cumulative result of all the work I have put in since then.
  5. Moreover How do you trade it ????

    I studied forex a bit but I worked more on stocks, indices and futures.... And I recently discovered fx and I found this market amazing since it is the only market that offers so many opportunities .... The others stocks, futures being restricted to indivduals and to certain areas and time horizons...

    FX can be traded from everywhere and by everybody with state of the art tools...
  6. How long do you stay in a position????
    and what are the moves you are looking for???

    I found that one may hold a position for a maximum of 1 to 2 weeks and play between 500 to 1000 pips....

    Usually the quickest moves are done in a short period and then the market enters into a non trending phase where one should stay out
  7. mahras2


    Yes it can be traded from anywhere and by anybody which is the reason the small number of elite traders make MORE money than from anyone in the FX game ;). It may look easy but 95% of all traders playing FX fails.

    The strategy I talked about on my previous post first strated out when I tried to implement it to short term trading. However, it left a lot of money on the table. After some changes and revaluation it now trades intermediate trends with the goal of calling every intermediate move happening on the market. Contrary to most trend followers ossillators (stochs, and aroon) is used as well as some custom indicators designed by yours truly.

    I have a journal up in the "journals" section of this website.
  8. mahras2


    Yes quick moves are the norm. You have stumbled upon one of the most important basis of my system. When a range is broken the immediate reaction is accompanied by an increase in velocity coupled by a VERY fast increasing acceleration which signals the slow topping of the market.
  9. mahras I did not say it was easy but that anybody could trade tis market and this is the easy access (limited capital, internet connection, nice moves ) that appealed to me.... espeacially from a swing trading standpoint...

    Say you were a swing trader on stocks !!!! This would be unbearable unless yu had a very well diversified portfolio with all the huge gaps you have everyday on this market and the ticked entry to day trading is higher....

    So currency trading throw out all the gaps garbage diversification.... thing and leaves you focus on forecasting the market and pinpointing precise entry points ....

    Now I agree with you that this is not enough to make money and you have more to it .... But nonetheless when you start having a good feel and understand how one can pinpoint big reversals it's another story since you can ride a nice trend and still have a limited risk !!!!!

    This is just my opinion ;)
  10. So basically you play momentum!!!
    #10     Sep 3, 2005