Swing Trading

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Swing Trading
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Paul Brittain Alaron Trading Pbrittain_at_alaron.com
1-702-255-4107
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Swing Trading
Because the currency market often experiences
short lived intraday trends, perhaps the most
efficient way to trade them is through swing
trading.
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Swing Trading
Swing traders dont attempt to predict the
duration of a trend, or to hold a bullish or
bearish bias. The premise of this trading style
is that one can capitalize on both trending and
retracement phases of a market.
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Swing Trading
The vital assumption is that all upward price
action must eventually result in a period of
correction.
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Swing Trading
To successfully swing trade in the currency
market, it is necessary to have a relatively
quick trigger for entry and exit.
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Swing Trading
Moving average crossovers are often the optimal
method of timing entry and exit. This is
because, a crossover is capable of marking the
end of one trend and the beginning of another.
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Swing Trading
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Swing Trading
If this trading style seems almost too good to be
trueyour intuitions are correct. By looking at
a chart, a trader would almost never lose if
he/she accepted moving average crossover signals
to enter and exit a trade.
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Swing Trading
The problem is that most traders are not
sufficiently capitalized to hold positions that
will eventually become profitable.
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Swing Trading
Traders can compensate a Moving Average Crossover
system by placing appropriate stops and using a
trend confirming indicator such as MACD or
Stochastics.
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Swing Trading
Trading on Moving Average Crossovers alone will
result in false signals. Filtering signals with
a confirmation indicator will alleviate some of
this.
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Swing Trading
A rule of thumb for stop placement in swing
trading is at the relative high or low of the
previous two price bars. If the relative high or
low is not beyond your entry, use the high or low
of the next feasible bar.
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Swing Trading
Stops should be trailed. Each price bar that
goes in your favor the stop should be placed just
above the high or low of the previous bar.
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Paul Brittain Alaron Trading Pbrittain_at_alaron.com
1-702-255-4107