If you have ever wanted to gain a true trading edge over the market then the best thing anyone could ever do is master the art of swing trading. Trading is a risky business and you need to do everything you can to stack the odds in your favour. Many traders try to scalp the 1 minute and 5 minutes time frames believing that they will be able to strike it rich and make more than enough money from trading to change their lives. You can get rich from trading and it definitely will change your life but scalping and doing what most other forex traders do is not the answer. To be able to make money you need to have an edge and the best edge a trader could ever get is with swing trading. Not only will you be trading with the smart money but you will also be trading with a lot less stress.

Anyone who trades the one hour and lower charts is either looking to lose their trading account or is very experienced and knows what they are doing. The sad truth is that most people starting out with trading do not know what they are doing and were lured to the forex or stocks because they wanted to make some money. Swing trading relies on the higher time frames, primarily the four hour to daily, and this allows you to see the real trend in any given market. Scalpers are trading trends that sometimes last for seconds to just a few minutes, whereas swing traders are riding swings on major trends that can last for weeks and months. It is a lot easier to make money from a trend that lasts weeks instead of one that is only going to last a few minutes.

The other advantage you gain from swing trading is that of understanding and exploiting the concept of value. What is value? Value is basically a price that is lower than where a market may currently be. Professional swing traders always use value as a core component of their trading criteria. Why does the average Joe always lose on most trades? Simply because he gets in at a price that is overvalued and typically enters the market near the peak of any run. Professional traders know that they need to wait for value to present itself before they enter a trade. This means they get in at a price better than most private traders and they stand to make a heck of a lot more money because they were patient.

Swing trading also makes the use of price action ever so more effective. Price action on the 4 hour and daily charts can be extremely powerful and eerily accurate, much more so than some trading indicators ever are. By learning how to read price action and apply it to your trading you will be able to gauge the sentiment of the market and manage your positions much more effectively. You’ll know when a trade entry setup may be forming, when the market may be consolidating and when it may be preparing to turn. While it is true you can use price action on any time frame, only the charts used for swing trading allow it to be so powerful and precise.

Do you know about swing trading? Swing traders ride the swings or oscillations that markets make as the stock or currency pair pivots from one price level to another. This method of trading has been around for sometime and in recent years has gained massive popularity amongst traders. Swing trading is a style of trading that can be used on any market with impressive results. However, there are more ways to trade markets beyond just swing trading. The main three styles of trading are day trading, swing trading and trend or buy and hold trading. Swing trading is found in between day trading and buy and hold trading and is highly recommended, no matter what you trade. Let’s take a look at the other styles and see why swing traders have the best odds to beat the market out of all the different kinds of traders.

Day trading or day traders typically keep their trades confined to a single trading day, hence the name. All trades placed are done so between the morning open bell and they are all closed out by the time the final closing bell for the day is rung. Day traders believe that the best way to increase your odds when it comes to trading is to never hold a trade longer than one day. This sounds good in theory but in practice it fails to deliver. Opening and closing trades within such a short period of time does not give you sufficient time to trade the major trends in markets. You are trading nothing more than the daily noise and false market signals it creates. Scalping is also considered a day trading style of trading. While scalping can offer extremely high rates of return, it does so with very high risk levels. Trend traders, or buy and hold traders, usually involve trades being held for several weeks to months. A trader typically needs substantial trading capital to be able to make any decent profit from buy and hold trading.

Swing trading is a trading style that focuses on the medium term and usually has traders holding trades for several days, but typically less than a week. Do traders hold trades for longer periods? Of course, but this is just a general rule of thumb and when you have gained enough experience using this style you will be able to make the necessary judgment calls regarding how long a trade should be held for. Some markets are more suitable for swing trading and it is important that you are trading the right currency pair or stock. High rates of return with low risk is what make many traders swing trade. This is the perfect balance for trading profitably.

Only swing trading offers high rewards with low risk. Short term trading styles such as day trading and scalping subject traders to substantial risk. Trading short periods of time and time frames exposes a trader to noise in the market. Noise can be extremely difficult to trade as it is seemingly randomless and ruthless towards anyone that is new or just beginning their trading career. Swing trading offers low risk but the potential to make substantial profits in both forex and stock markets.

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Point and figure charting represents the price action in a totally different, rather a ridiculously different manner, as compared to the most familiar bar and candlestick charting. Point and figure trading uses this point and figure chart in focusing exclusively on the price action. Now, point and figure (P&F) trading is somewhat similar to the familiar support and resistance breakout trading. The Definitive Guide To Swing Trading Stocks Pdf

P&F charts are available on almost all the charting platforms. P&F Charts focus exclusively on the price action excluding other familiar elements like the time, volume and open or closing price of the currency pair or for that matter the security.

P&F trading is very well suited to the currency market as it solely focuses on the price action, the most important thing in technical analysis. What this means is that when you use the P&F Chart it removes the clutter from the chart and presents clear evidence of the support/resistance, trend and the breakouts.

A Point and Figure (P&F) Chart comprises of columns that are represented by Xs and Os. X means the price has risen in the column while an O means that a decline in the price has taken place. When the price reverses direction, another column is added.

Now as mentioned above, time, volume,open and closing prices are all removed on the P&F chart and only when the price increases by a fixed increment, the column moves in the chart. Now, this fixed small increment is known as the BOX SIZE.

Box Size is the minimum amount the prize is supposed to move before another box in the column is created. Suppose, you set the box size to 10 pips which is the usual practice among the Forex traders though you can choose any settings of your own.

Now, the column of X means rising prices. Suppose there are 10 boxes in the X column, this means that the price has continuously moved in increments of 10 pips for the 10 boxes to be added to the column. Now, you need to note this fact that there is no mention of the time it took for the 10 boxes to be formed as well as the open or the closing price. The Definitive Guide To Swing Trading Stocks Pdf

In order to add another X to the already 10 Xs that are present, the price should move 10 pips above the last box. On the other hand, suppose the price instead of increasing by 10 pips declines by 10 pips.  Now, he second most important variable that is very important for the P&F chart is the Reversal Amount.

So, price has to reverse by this amount before a new column will be added to the chart. Suppose, you have set the reversal amount to 3 boxes or 30 pips. Now, instead of adding an X to the existing X column a  new column will be added with an O if the price declines by 30 pips. If the price further declines by another 10 pips, another O will be added to the column.

Whatever, P&F Charts are ideal for trading support and resistance breakouts. Eric has created an excellent Forex Point and Figure System that you can use to capture massive moves in the market. This Forex Point and Figure System works on the MT4 Platform. You can use this P&F Trading system to identify trends before everyone else and capture massive pips capturing the market move before everyone else. You can also use the P&F Trading System to set tight stop loss. Whatever, you can test this Forex Point and Figure System RISK FREE for 60 days on your demo account! The Definitive Guide To Swing Trading Stocks Pdf

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