If you're just starting out in currency trading and you want to make a quick profit, then forex swing trading is ideal for you. In swing trade, trade takes place in over a few days to as long as a week as the forex trader seeks to take advantage of short- to medium-term swings in price movements.
Basic concepts the swing trader needs to understand are support and resistance levels. Support is a price level below which a currency price rarely falls; on the other hand resistance is a level above which prices rarely rise. Once you have identified such levels, you can use them to develop a swing trade strategy.
For example, a trader doing forex swing trading identifies a resistance level that prices continuously fail to exceed. This is a sign that you should sell your holdings when they approach the resistance level. On the other hand, if the prices break through the resistance level, it is an indicator that the upward price trend is accelerating.
Apart from developing a strategy, you also need to have the right psychological mindset when swing trading. You have to adopt a hit and run approach rather than riding a trend in the hope that it would lead you to bigger profits. Thus, when your holdings approach the resistance level, sell at once rather than waiting for prices to test the next level.
Even if you're a beginner to currency trading, forex swing trading can lead to huge profits, as long as you can develop a good system that is easy to apply and learn to trade with discipline.
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