Did you ever hear about Swing Trading?

It is not that difficult to trade it. All you need is to understand about Support and Resistance Levels.

Support and Resistance

Support and Resistance Lines are levels you can use for long term and short term trading. A Support level means that when the prices are falling (downtrend), they often bounce back at a certain key level on the chart. On the chart it looks like the prices go down to the Support and swing back.

A Resistance Level is just the opposite. The prices are going higher in an uptrend and bounce back at the Resistance line. You can see that in the picture below.

Of course the prices don't swing back exactly at the Support or the Resistance line. Mostly they go a little bit below or a little bit above, before they bounce.


What is the Swing Trader doing?

The Swing Trader now is using that knowledge and buys at the Support Level and sells at the Resistance level. This sounds quite easy. But a Swing Trader must trade very systematically. Therefore he needs to choose precisely the currency pairs on which he is trading. And he also needs to decide which Support and Resistance Levels he is going to use.

What kind of Support and Resistance Levels does a Beginner Trader now?

Actually the easiest Support and Resistance Levels I have ever seen are the S&R based on the Pivot point concept. What is that? Pivot points are calculated according to the previous day high, low and close divided by 3.

The Pivot Point is in the center. It is neither a Support nor a Resistance Level. From the Pivot point you calculate the Resistance 1 Level (R1) which is 2 times the Pivot minus the previous day low.

Pivot (P) = (H + L + C) / 3
Resistance (R1) = (2 X P) - L
R2 = P + H - L
R3 = H + 2 X (P - L)
Support (S1) = (2 X P) - H
S2 = P - H + L
S3 = L - 2 X (H - P)

You don't need to calculate the Pivot point by yourself, you can find here the IBTimesFX Pivot point calculator. If you are trading on MetaTrader4 you even don't need that. You can just go to the Biggest List of MetaTrader4 Indicators and download the indicator for Pivot Points.

After you installed the indicator on your Trading Platform, your chart will look like that:


And here we go. You have now the Support and Resistance Levels on your chart.

Design your Trading Strategy that works

What you need now to do decide how you will do your Swing Trading. For example you need to decide in which time frame you are trading, which currency pairs you are using, and if you are trading according to a trend or not.

For example, my first Swing Trading Strategy was only on EUR/USD, GBP/USD and USD/CHF. I have chosen these three pairs, because they are traded mostly in the European hours. I traded them only in the morning from 09:00 GMT to 12:00 GMT. At noon time I closed all my Pending Order on the Platform. And I traded always with the trend. Because I was a beginner trader, I didn't know how to do the trend analyses for these three pairs. So I used the trend analyses from a website that I knew already very well. It was Forex-Tribe. If you go to that website you will find every day in the morning a new trend analysis for many currency pairs. I only traded when the trend was clearly up or clearly down. And I made always a Stop Loss of 35 and a Take Profit of 55 Pips. Like that I won more than half of my trades; that made me already profitable.

You can try by yourself. There is no need to say, that a trader shouldn't follow the system of another trader. Always create your system that is working for YOU!