Advantages of Swing Trading
Swing trading in Forex is trading with a medium time frame. That swing traders usually intend to hold their position for more than a day and less than months. Volatile markets are best for swing traders because then the changes happen quickly and there is opportunity for short to medium term gain. Swing trading requires careful monitoring of the market so that you can make quick decisions.
No market trends up without some sort of a downward swing, and conversely no market trends down without a little bit of an upward swing. The goal of a swing trader is to capitalize on those upward and downward swings in the relatively short term. Swing traders can be in and out of the market within a matter of days and have made a significant profit if their timing is right.
Swing traders can use the short term to be profitable without tying up their assets and not leaving room to open new positions. A big advantage to swing trading is that you do not have to come up with margin for new positions while you still have positions open because you have likely closed your previous position before you decided on a new one.
Although it is necessary to watch the market carefully, swing trading does not have to be a full-time job. Day trading is more likely to need full time attention, and swing trading can be done part time. For swing trading, you need to be on top of the market charts but not all in one day because you are not expecting to open and close your positions all in the same day.
Stop losses allow a swing trader the freedom to walk away and have a different full time job other than Forex Trading. Because of being able to take more significant breaks than day traders, there is much less risk of burnout. Day trading is more intense and stressful than swing trading and because swing traders often have other jobs besides Forex Trading, they will have a less intense experience, and other sources of income.
Trades in swing trading have more time to work out, and therefore can be more profitable without tying up your funds for the long term. The benefit of trading this way is that you will see your profits sooner than with long term trading but there is greater potential than day trading.
Swing trading usually offers less leverage and requires more margin than day trading which translates into less risk for the trader. You are much more aware of the risk when you are trading with more margin and less leverage.
If the advantages of swing trading are appealing to you and your lifestyle, then swing trading can be the best route for you to take to a profitable Forex experience. These advantages must seem overwhelmingly beneficial to you for swing trading to be your best choice.