Swing vs Intraday Trading

Discussion in 'Forex Trading' started by forextrades, Jun 23, 2008.

  1. I wanted to start a topic about something that has bugged me for a while.

    I became interested in trading about 5 years ago and finally started turning a profit on a consistent basis about 1 year ago. I trade mostly EUR/USD and GBP/USD.

    People often refer to swing trading or position trading as if it were easier than trading on the intraday scale. I suppose their reasoning for this is because it slows the market down.

    However, I have yet to come across a successful strategy for position or swing trading that specializes on just one or two pairs. The swing/position strategies you typically come across are not pair specific. Instead, the signal usually comes when several indicators point in one direction, which happens very rarely. To increase your odds of actually getting a signal, you diversify across several pairs.

    That is not the type of strategy that appeals to me, because I believe there are several different ways to make money on just one instrument/time frame. At the same time, I simply see no way to gain any type of edge on the longer time frames.

    Take a look at the daily chart of GBP/USD. It looks like a fuzzy caterpillar. Most traders, even successful traders, couldn't make heads or tails out of it. There is far too much rolling chop.

    However, when I zoom into the 1 hour chart, the picture become much more clear. There is a cyclic rhythm on the shorter time frames which is much easier to decipher. Volume picks up at the start of European session. Between 8:00 and 12:00 GMT, price will hit an extreme and then regress to the mean later in the day.

    Why is it that I don't see anything like this on the daily charts? Does this show that the markets truly are not fractal in nature? If one were trying to devise a strategy for swing/position trading, wouldn't it make more sense to apply the rules to the shorter time frame and "zoom out"?