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Forex Swing Trading

 
     
 

On this page I introduce the basic concepts and terminology of Forex swing trading - the same swing trading methods apply to any time period that you use when trading forex. However, there are some really good autotrading possibilities out there, like my very favourite:

ZuluTrade - Autotrade the Forex Market like never before!

 
     
 
 
     
  There are thousands of Forex trading sites out there, many with spectacular "performance" on trading systems with outlandish and bizarre names! Some may actually be worth something. DO be careful to check full performance figure for ALL trades before committing your self to paying money to buy into a particular system. It is better to learn the basic principles for yourself! I have three that I can recommend - go here for details.


     
 
 
     
 
Forex Training
Choose the type and level of Forex training that meets your needs - let us help you become the type of trader you'd like to be.

 



 
     
 


The Forex, or Foreign Exchange market is now the absolutely hottest thing on the trading and speculating scene. Just in sheer volume, the international trading market is about 5,000 times bigger than the total stocks, options, futures and bonds markets in the USA. It functions 24 hours a day, is very volatile, and is as thrilling as options trading.



There is really only one caveat: Forex trading is mostly done on margin, so be careful and don't overextend your self!

Forex Basics - terminology

Forex trading involves the trading of currency pairs (e.g. GBP/USD) for almost all major currencies in the world. The most liquid and heavily traded pairs are:

EUR/USD : Euro and United States dollar
USD/JPY: United States dollar and Japanese yen
USD/CHF: United States dollar and Swiss franc
GBP/USD: Great British pound and United States dollar
AUD/USD: Australian dollar and United States dollar
USD/CAD: United States dollar and Canadian dollar

The first currency in the pair is the BASE currency; the second is called the QUOTE currency. So you may see a quote as follows:

GBP/USD = 1.9603
This means that you can buy 1 GBP (Base) for 1.9603 USD.

Pips
Pips represent the smallest unit for which the currency can be traded. As most currency pairs are quoted to the 4th decimal point, that smallest fraction equals one pip. So, for example, if you GBP/USD at 1.9603, and sold it at 1.9703, you would have made a profit of 100 pips.

The size of the pip in monetary terms depends on how much money you committed to the trade. If you bought GBP10,000 at 1.9603, and sold it again at 1.9703, then your profit of 100 pips equals $100. If you committed $1,000 to the trade, your profit of 100 pips is equal to $10.

Margin
The one thing that makes forex trading a super thrill ride is that most brokers will allow you to trade on ridiculously high margins of 100:1 (or even 200:1). This means that if you want to trade a lot of $10,000 worth of currency pair units, you only actually need to commit $100. This gives you HUGE leverage over a trade. Your leverage on stocks options, by contrast, is usually in the region of 10:1. It is in the use of this leverage that forex trading can be so profitable. It also means that this leverage can do you serious damage if you do not use proper, automated stop losses on your trades. Remember that you are in effect borrowing the money from your broker, and if you lose out badly, he will want it back! You must be very careful to consider how much you will commit to a trade, so that if your trade goes to your stop loss, you will not exceed your capital.

Time periods
Currencies are traded 24 hours a day, and you can trade in weekly, daily, hourly or even 5 minute or 1 minute periods. This is really one of the most flexible trading possibilities around!

Trading
It is said that if you ask 10 rabbis a question, you will get 15 different opinions. It is the same in the currency trading world. There are hundreds of ways that traders do it, and the names of each strategy are incredibly creative. Names like "Cash Cow", "Runner" and "Flip & Go" are common. Some are very technical, some claim to be automatic, and some are event based.

You can apply the exact same swing trading method that you would use for stocks and options trading, with similarly exciting results. The next page in this section talks about how to apply swing trading principles to forex trading. It is a general strategy that you can use for any trading period once you have learned the underlying process.

If you are new to Forex trading, you might want to look at some Autotrading Systems . I have picked out three systems that I have personally used and can recommend. One is fully automated, and runs 24 hours a day; one is community based; and one is setup so that the user has partial control. These ones actually work!

 

New Forex Articles....

Zulutrade - the very best of Automated Forex Trading
How the online forex system developed by Zulutrade works, and how to use it to maximise profits

Using Zulutrade - how to evaluate an automated forex system
How to use Zulutrade's data and filtering systems to profit from free forex signals

Forex Signals
Using the Put/call ratio for trading forex.

Fibonacci Forex Signals
Using this classic indicator when trading forex

Forex Consolidation Patterns
How to read this important pattern when trading forex.

Yield Curve Interpretation
How to read bond yield curves when trading forex.

Understanding trend analysis: What is the cause of economic trends?
Trend analysis is as crucial in stock or bonds trading as it is when you trade forex online.

Swing Trading Forex
Swing trading forex is popular because it combines the best aspects of two different styles into a form that is workable and profitable.

Forex Options Trading
Many of you know about trading options but are unsure about the profit potential of forex options trading, or simply don't have enough information about the forex options market.

Forex Options Strategies
The Put/Call Ratio of Forex Options and How to Use It in the Spot Market.

Forex Trend Analysis
Analyzing a Trend: How to Solve the Riddle?

Forex Trend Trading
The Proven and Time-Tested Strategy of Trend Following.

 

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