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Best swing trading forex pairs

Best Forex Pairs for Swing Trading,Chart timeframes

Struggling to choose the best forex pair to swing trade? The best currency pairs for swing trades are EUR/NZD, EUR/AUD, EUR/CAD, GBP/AUD, GBP/CAD, and GBP/JPY. The reason is From the preceding, the following below are the best forex pairs for swing trading. AUDJPY. The Australian dollar (AUD) has an exciting relationship with the Japanese yen (JPY). For In the case of NZD/USD, that market is dairy. New Zealand is a top five global exporter of dairy, and the combination of this market influence with the high liquidity and volatility of this forex 30/5/ · How Many Pairs Should A Swing Trader Focus On? If you’re just starting out, you might want to focus on 5 to 10 currency pairs. This approach will allow you to take advantage 17/8/ · BEST FOREX CURRENCY PAIRS TO TRADE. Many currency pairs can be traded in the forex trading system but the most traded and profitable currency pairs are listed below. We ... read more

When counter-trending, it is very important to maintain strong discipline if the price moves against you. If the market resumes its trend against you, you must be ready to admit you were wrong, exit the market and draw a line under the trade.

In the chart below, the red and green lines are both moving average indicators MAs :. The method we are using to identify market movement utilises both moving averages. Together with this indicator as our swing trading strategy input signal, we use a stop loss and take profit. When the red line crosses the green line, it suggests that we can see a price change in the direction of the crossing, and it is our signal to enter the market in the direction of the price change.

In the graph above, the shorter red MA crosses the longer green MA on three occasions, all highlighted by red vertical lines. On the 17 March and the 5 July , the red MA crossed below the green MA. This is providing a signal to sell.

On 13 May , the red MA crossed above the green MA, providing the signal to buy. It is important to bear in mind that, with this swing trading strategy, due to the lagging nature of the MA, the trend will start before we receive our signal.

If you would like to take an even deeper dive into swing trading and learn a versatile swing trading strategy that beginners can use, check out our previous webinar on the topic:. There are several things you can try to improve your swing trading strategies. The first is to try to match your trade with the long-term trend by looking at a longer term chart. Try and trade only when the direction matches that of the long-term trend.

Another way to improve your strategy is to use a secondary swing trading indicator as a filter. For example: if you are a counter-trender and are considering a short position, check the RSI Relative Strength Index and see if it signals the market as being overbought.

A Moving Average, like we looked at earlier, is another helpful indicator you could use to help your swing trading strategy. An MA smooths out prices to give a clearer view of the overall trend.

Also, because an MA incorporates older price data, it's an easy way to compare how the current prices compare to older prices. There can always be unexpected price changes in the market, therefore, we must always adopt good risk management. Let's look at this with an example involving the GBPUSD currency pair.

If we were following the moving average swing trading strategy we looked at earlier, we would have received a buy signal on the 16 March when the red MA crossed above the green MA. What was the result? The value of the British pound sank and the GBPUSD fell several hundred pips in less than one minute.

If we had maintained a long position, without proper safeguards in place, we would have been trapped in a very bad trade. Good risk management in swing trading strategies is essential.

If we do not set our objectives correctly, with a take profit and stop loss order, an adverse market movement can occur that causes us to lose a large part, or even all, of our capital. There are many swing trading indicators you can use to improve your chances of success, here are a few of our favourites:. Now that you know the basics of swing trading, and some Forex swing trading strategies, here are our top tips to help you succeed as a swing trader.

Swing trading is a style suited to volatile markets, and it offers frequent trading opportunities. While you will need to invest a fair amount of time into monitoring the market with a swing trading strategy, the requirements are not as burdensome as trading styles with shorter time frames.

Moreover, even if you prefer intraday trading or scalping, swing trading strategies will provide you with some diversification in your results as well as offering potential additional profits!

Having said that, swing trading is not right for all traders, so it's always best to practise first on a risk-free demo trading account. Sign up today for a demo trading account from Admirals by clicking the banner below, and start testing your swing trading strategies on the markets:. Admirals is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8, financial instruments via the world's most popular trading platforms: MetaTrader 4 and MetaTrader 5.

Start trading today! This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time.

Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. Help center Contact us. Start Trading. Trading Tools MetaTrader Supreme Edition StereoTrader Top! Virtual Private Server Parallels for MAC.

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For example, you could short the EURUSD if you expect global risks to rise or when you expect the Federal Reserve to start hiking interest rates. Finally, there is price action, which is a form of technical analysis. It is a process where you predict the future direction of a currency pair by looking at the overall chart arrangement. For example, you can identify chart patterns like triangles, head and shoulders, and cup and handle.

Therefore, the best practice in swing trading is that you should have a holistic approach that includes these analysis methods. For example, you should start your analysis by looking at the fundamental view of the currency pair.

You should then move to do a technical and price action analysis method. A common mistake we see with many swing traders is that of using many technical indicators in one chart. It is not uncommon to see a trader have more than 6 indicators in a chart.

We suggest that you identify about three indicators that you will use for your analysis. There are hundreds of currency pairs and thousands of stocks and exchange-traded funds ETFs.

A common mistake we see is where a trader will want to participate in tens of them at a go. While it is possible to make money this way, we recommend that you narrow down to a few assets. For example, if you are a forex trader, we recommend a situation where you focus on around five majors or minor pairs.

Narrowing your focus will help you trade well. It will also help you become an expert in the fewer currency pairs that you are trading. There are two main types of orders in the forex market. There are market orders and pending orders.

A market order is implemented right away while a pending order is implemented in the future only when conditions are met. A buy stop usually opens a bullish trade slightly above the current price while a sell-stop usually opens a short trade below the price.

Similarly, a buy limit usually opens a bullish trade below the current level while a sell limit opens a short trade above the present level. These pending orders can help you open the right trades especially when you are looking at breakouts. The next best practice when using the swing trading approach is known as risk management.

This is a situation where you minimize risks and maximize returns. Some of the top approaches to reduce your risks are position sizing, using lower leverage, and not over-trading. With that being said, which forex pairs should you be using for swing trading? The best forex pairs to swing trade are those pairs that frequently trend, for instance, EURUSD, GBPUSD, EURJPY and USDCAD.

Any pair that is influenced heavily by economic factors will make a great pair for swing trading, hence why most USD pairs are great for swing traders. Swing trading Forex is often compared to daytrading, but while the two are similar in their short-term strategies swing trading is a different animal altogether.

Daytrading takes place during a single day. You get into and out of positions in a very short block of time. Swing trading , on the other hand, may have you getting into and out of positions on the same day, over a couple of days, or even over a couple of weeks.

On top of that, swing trading also offers a little more trading time flexibility, allows you to more clearly identify your positional boundaries to enter and exit different trades, and helps protect you with smaller stop losses. The trick, though, is finding the right currency pairs that allow you to make money on these kinds of swing trades.

Just as important as finding the right pairs to trade is making sure that you steer clear of pairs that cannot produce with this strategy. These pairs are a lot more volatile than major currency pairs and a lot less liquid.

There are four primary trading horizons that Forex traders typically fall into. This includes the ultra-short-term scalping timeframe, the intraday day trading timeframe, the intermediate swing trading timeframe, and the longer-term position trading timeframe.

In this lesson, we will focus on learning all about the swing trading timeframe. The term swing trading refers to a generalized timeframe in which a trader regularly executes their specific trade setups. In the conventional sense, a swing trader is said to hold onto a position for several days up to several weeks. As such, it is a trading horizon longer than the day trading timeframe, and one which is shorter than the position trading timeframe. Swing traders seek to profit from intermediate-term price swings.

This is in contrast to trend traders who seek to capture longer-term price trends. Swing traders typically prefer to trade in and out of larger trend structures rather than hold onto a position for an extended duration of time. Although most swing traders are fairly active in the market, they are not nearly as active as day traders or scalpers , who are likely to take multiple positions intraday and prefer to be flat at the end of each trading session.

Because of the characteristics noted, swing traders will gravitate towards trading timeframes such as the daily chart, the eight hour chart, and the four hour chart.

Additionally, unlike trend traders who can have a relatively wide and asymmetrical reward to risk profile on their trades, swing traders on the other hand will often work with a much more conservative RVR.

That would equate to a 4 to 1 or higher reward to risk profile. Swing traders on the other hand will often only realize reward to risk profiles of 3 to 1, 2 to 1 or sometimes a bit lower. Another characteristic that is quite common among swing traders is that a large majority utilize technical analysis as their primary market analysis approach. Since this group of traders tends to trade minor to intermediate price swings, it makes sense that they have a greater reliance on market timing via technical analysis.

A multi-timeframe analysis method usually incorporates a top-down analysis methodology. So the clarify further, a swing trader who utilizes the daily chart as their primary trading timeframe to scan for their trade setups, should confirm that the next larger timeframe chart, in this case, the weekly chart, is in alignment with their trade set up.

After which, it is recommended that the trader zoom into the next lower timeframe from your trading timeframe, which in this case would be a four hour chart, to fine-tune the trade entry. The main take away here regarding multi-timeframe analysis is, regardless of the specific trading timeframe that you utilize for finding your trade setups, you should always confirm the bigger picture by going to the next higher timeframe.

In addition, you should refer to the next lower timeframe from your trading timeframe to pinpoint the best entry point. Here are some combinations of swing trading time frames, and the associated higher timeframe for trend analysis, and lower timeframe for fine-tuning entries.

Depending on your specific swing trading methodology, you may need to revise this a bit. But generally speaking, the above outlined swing trading time frames are the ones that you will likely focus on for the most part. They are the most widely watched among swing traders, and thus offer the best clues as to what other traders are thinking and positioning themselves. Personally, the best forex swing trading signals that I see come from the daily chart.

As swing traders, we want to trade those instruments that have a high level of trading activity in terms of volume and thus offer great liquidity. Additionally, we want to ensure that the currency pair has sufficient volatility.

Liquidity is important because it provides us the ability to trade in and out of our positions with minimal slippage cost or market impact. The most liquid forex instruments include the major currency pairs, and a few cross currency pairs.

As for the requirement that are chosen instrument have a sufficient amount of volatility , what that essentially means is that we want to ensure that the instrument has enough movement for a trade to make sense.

This condition will further narrow the prospect list. Below are the five best Forex pairs for swing trading based on having both high liquidity, and high volatility characteristics. EURUSD — This is the most liquid currency pair within the foreign exchange market. It is widely traded throughout the globe, and the price movements within this pair make it ideal for a swing trading approach.

GBPUSD — The British Pound to US Dollar currency pair is very actively traded. It often has a strong correlation to the EURUSD currency pair. AUDUSD — This is a favorite among traders in Australia and the Far East.

EURJPY — This is a very liquid cross currency pair that is often characterized with large daily price swings which can sometimes exceed pips. It is a favorite among more active swing traders looking to capture short-term price trends. GBPJPY — The Pound to Yen currency pair is highly volatile, and is most active during the European and Asian sessions.

Minimal Time Commitment — Most swing trading strategies can be managed in less than an hour a day. This is something that is hard to grasp for many beginning traders, but it is certainly true if you have a focused process in place. Lower Transaction Costs — Many forex swing trading systems will only trade several times per week. As such, you can expect to generate approximately 75 to trades per year.

This is the normal range of activity for most swing traders. Compare that to day traders who will routinely take several trades per day. This can result in anywhere from several hundred to even a thousand trades or more per year.

When you factor in the total transaction costs including the indirect costs of bid ask spreads , slippage, and commissions, a swing trading methodology will clearly be less expensive. More Reliable Trade Setups — With a swing trading approach, you will be focusing on holding positions for as little as a few days to as long as a few weeks.

The price patterns that occur on the various swing trading time frames are much more reliable compared to those that occur on both the smaller day trading timeframe, and the larger position trading timeframe. The day trading timeframe is filled with noise which can make it extremely difficult to trade efficiently. The position trading timeframe can be heavily influenced by both fundamental and geopolitical factors which can also make it more challenging.

More Types Of Strategies To Test — The majority of long-term position trading systems tend to be trend following in nature. They will typically look for some sort of momentum breakout, and seek to enter in the direction of the breakout for a potential trend move. Many daytrading systems are based on a volatility breakout methodology, or some sort of mean reversion technique based on short-term sentiment extremes. Swing traders will find that there are many different types of trading styles, and methodologies that they can study and use to build their own customized swing trading EA or model.

There are many different swing trading indicators and tools that can be employed. Some of these technical indicators are momentum based, others volume-based, or sentiment based to name just a few types. And there are countless variations that can be studied and tested.

Some traders, however, prefer to keep it simple and rely exclusively on price action analysis. Price action trading is a timeless market analysis technique and one that is very well suited to the swing trading time frames.

So what exactly is price action analysis? As you may be aware, most trading indicators are derivatives of price itself, and thus the information that we gather from such indicators has a delayed or lagging effect.

Horizontal Support and Resistance — Support represents a key price level below the current price. Resistance represents a key level above the current price. It is a level where we could expect to see supply enter the market, which may lead to a minor stall or possibly a reversal to the downside.

Candlestick patterns are usually one, two, or three candle formations that can provide short-term clues into future price action. Below are a few examples of the shooting star candlestick pattern, which has a bearish implication. Price Gaps — In the Forex market, price gaps are most often seen at the start of the trading week. This is because the foreign exchange market is open 24 hours a day, 5 days a week. Chart Patterns — Classical chart patterns such as rectangles , triangles, pennants , and flags are still some of the most reliable formations that FX and CFD swing traders use.

In addition to classical chart patterns, there are other chart patterns based on harmonic Fibonacci relationships. These include the Gartley pattern, Bat pattern, Crab pattern, and Butterfly pattern to name just a few.

Below is an example of a rectangle chart pattern. In this section, we will describe a swing trade strategy that incorporates a very specific chart pattern.

The formation that I referring to is the Bat pattern. The Bat pattern is a pattern within the harmonic family of patterns. It is a reversal pattern that is often seen within the Forex market. It is a particularly reliable set up when it occurs on a major currency pair or cross currency pair. The Bat pattern consists of four distinct legs labeled the XA leg, AB leg, BC leg, and the CD leg. The extreme of point C should be contained within the extreme of point A.

Although there are other Fibonacci relationships as well that exist within this pattern, these are the major requirements of the Bat pattern formation.

The expectation is once the price reaches the D point of the structure, there should be a reversal in the market. More specifically, in the case of a bearish Bat pattern, prices should trade up to the D point and reverse from there. Conversely, if the structure is a bullish Bat pattern, prices should trade down to the D point and reverse from there. This strategy is best applied to the major currency pairs, and should be traded on either the minute, minute or daily timeframe.

So here are the rules for swing trading a bearish Bat pattern:. These are the rules for swing trading a bullish Bat pattern:.

Below you will see the price chart for the EURUSD currency pair based on the eight hour timeframe. You can see the bearish Bat pattern highlighted here. Notice the four legs that comprise this formation. The first is the XA leg which moves lower, and then the AB leg which retraces the XA leg. Then, the BC leg moves lower to retrace the AB leg. Finally you can see the CD leg move higher as it retraces the entire move from point X to point A. Once we have recognized a potential Bat pattern on the price chart, will need to validate the pattern by looking at the important relationships within the structure.

Although this is not the ideal Fibonacci retracement for point B, it is nevertheless close enough for us to validate the pattern and consider it a potentially tradable opportunity.

As the price was moving higher within the CD leg and we were able to confirm the B point, we would want to prepare for a potential short trade opportunity. This is the ideal termination point for point D within the structure, and represents an excellent area for entering into the position.

Which Forex Pairs to Trade – Day Trading and Swing Trading,Table of Contents

The Best Swing Trading Indicators. There are many swing trading indicators you can use to improve your chances of success, here are a few of our favourites: Exponential Moving In the case of NZD/USD, that market is dairy. New Zealand is a top five global exporter of dairy, and the combination of this market influence with the high liquidity and volatility of this forex Struggling to choose the best forex pair to swing trade? The best currency pairs for swing trades are EUR/NZD, EUR/AUD, EUR/CAD, GBP/AUD, GBP/CAD, and GBP/JPY. The reason is Below are the five best Forex pairs for swing trading based on having both high liquidity, and high volatility characteristics. EURUSD – This is the most liquid currency pair within the 30/5/ · How Many Pairs Should A Swing Trader Focus On? If you’re just starting out, you might want to focus on 5 to 10 currency pairs. This approach will allow you to take advantage 17/8/ · BEST FOREX CURRENCY PAIRS TO TRADE. Many currency pairs can be traded in the forex trading system but the most traded and profitable currency pairs are listed below. We ... read more

In most cases, swing trading only involves the use of technical analysis, which simplifies your trading research and contributes to the reduced time commitment of forex trading. This is because the foreign exchange market is open 24 hours a day, 5 days a week. But generally speaking, the above outlined swing trading time frames are the ones that you will likely focus on for the most part. Which Are the Best Forex Pairs for Day Trading. For swing traders that actively manage trades, it is better to trade those positions well. The Bat pattern consists of four distinct legs labeled the XA leg, AB leg, BC leg, and the CD leg. Enter your name or username to comment.

We'll assume you're ok with this, but you can opt-out if you wish. Swing high and swing low are critical concepts for successful swing trading, best swing trading forex pairs. There are broadly three types of traders in the forex, stocks, and commodities industry. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way. Moving averages give you the kind of insight you need especially longer term moving averages to spot trend reversals.

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