Mastering the art of a swing trading strategy

Becoming a professional swing trader is no longer a tough job. Due to the availability of free resources, new participants can learn about the vital market details without facing any difficulties. Usually, the majority of the traders don’t realize the importance of having a solid knowledge of the market. They keep on aimlessly taking their trades and expect to make a big profit. On the contrary, professional traders always follow strategic steps and use structured methods to execute their trades.

There are thousands of trading systems available in the market. In this post, we will discuss the method by which you can learn swing trading strategies within a short time.

Selection of the asset

Professional traders are always keen on their asset selection process. They don’t want to jeopardize their trading career by selecting the wrong asset. You might have a robust trading strategy; still, you will fail to find reliable trade signals. Though the strategy plays a vital role in the data analysis process, still you should consider the asset selection process. Rookie traders should focus on the major asset classes. If you carefully observe the price movements of the major instrument, you find distinct swing patterns, which are crucial for a swing trading strategy.

Identifying the retracement levels

Identifying the key swings in the market is one of the most complex tasks for the rookie trader. To ease this process, you should be trading the market with elite brokers like Saxo Bank, as they offer high-end trading platforms. Once you have access to the high-end platforms, you may use the retracement tools to identify the price correction levels. As a new trader, you may rely on the Fibonacci retracement tools as they are easy to use and provide accurate signals in the higher time frame. Some people often think swing trading strategy is all about trading the tops and bottoms. In reality, it’s more like riding the trend by knowing about the retracement zone.

Use of candlestick patterns

Those who strong rely on the retracement levels should learn the candlestick pattern trading system. Using the simple price action confirmation signals, you can easily find reliable support and resistance level. Even if you take the trades at the 61.8% or 50% retracement level, you will know whether the retracement level is strong enough to provide powerful trade signals. You may get confused by seeing the different candlestick patterns at the initial stage, and it is normal. Feel free to use the demo trading account and make yourself comfortable with the various candlestick patterns.

Analysing the fundamental news

Professional swing traders are cautious about the high-impact news. They know very well that this news can alter the course of the trend without giving any technical signals. Unless you learn to analyse the news data systematically, you will never feel confident with your actions. During the intense volatility of the market, you will be relying on luck and messing things up. To deal with such critical market conditions, you may learn to analyse important news from the start. Stay in tune with the economic calendar and try to execute the trades during the stable hours of the market.

Managing your risk exposure

Being a new swing trader, you should be extremely careful about your risk management process. Unless you are good at dealing with losing trades, you will never learn to profit consistently with the swing trading strategy. To remain safe, we strongly recommend that you risk only 1% of your account balance at the initial stage. As you learn more about the swing trading strategy, you may increase your risk exposure. Lastly, accept the small losses and consider them as a part of your trading business.