How To Swing Trade Forex Trends?
You will keep on hearing from the gurus that trend is your friend. This is indeed true but trend is never your friend in the beginning and the end. Swing trading trends is where fortunes are infact made by traders. If you can spot the trend in its early stage and ride it till its end getting out just before it reverses itself, you should be able to make quite a fortune.
The difficulty in trend trading lies in identifying when a trend has started and knowing when to get off quickly when the trend is over.
The biggest risk for a swing trader trying to trade a trend lies in entering the trend when it is too late and the trend is about to end.
How do you identify that you are about to ride a beginning trend or an ending trend?
You should use an ADX indicator and only enter if the reading is above 20. However, in all aspects of trading nothing is 100% sure. The best thing you can do is to put the odds in your favor. You can use charts or technical indicators. Charts are much easier.
To be more precise, you can use a technical indicator like the ADX (Average Directional Index). You can also use this ADX indicator to determine when to enter a trend. Only enter a trend when the ADX reading is above 20.
Swing trading trends is one of the most profitable ways to trade. If you can make the right entry and ride the trend till the end making an exit before it reverses itself, you can make a lot of money riding that trend.
But most traders do it wrong. They can't figure out when to enter and when to exit.
Markets never move in straight lines. A trend starts. Suppose it is an uptrend. The market will move in this uptrend then pause and consolidate itself. After pausing for a while, the market may resume the previous trend or simple start moving in an opposite direction. You need to learn how to predict all these market u-turns.
Candlestick charts coupled with a certain chart patterns are used by experienced traders in determining when the market is about to make a u-turn. If you can master this art, you can make a fortune.
Article Source: FxTradingStock.com
About the Author
Mr. Ahmad Hassam has done Masters from Harvard University. Get this highly profitable Magic Breakout Forex Strategy by Tim Trush and Julie Lavrin FREE. Download these Correlation Trading Cheathsheets FREE.
by: Ahmad Hassam
Total views: 25
Word Count: 401
Date: Sat, 23 Oct 2010
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