What is a swing trader in forex?

what is a swing trader in forex?

what is a swing trader in forex? – Best Forex Broker

In this short article, we are going to answer this question: what is a swing trader in forex? In fact, there are many trading styles in the forex market. These trading styles are different in terms of time, capital, and psychology. Therefore, you can find swing traders, day traders, and scalpers.

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What is a swing trader in forex?

what is a swing trader in forex_ best forex broker

Swing trader is a trader who use swing trading style. That is to say a trading method that attempts to capture big moves in forex or stock. This trading style focuses on long and short positions that can last over a period of a few days to several weeks.

Swing trader primarily use technical analysis to look for trading opportunities. However, these traders may utilize also fundamental analysis to consolidate their set ups. Price action also plays a large role in swing trading. Traders often follow market patterns to determine the point of entry and exit points.

Swing trader assesses trades based on a well established risk/reward ratio. After analysing the chart, the trader determines the point of entry, stop loss, and take profit. The risk/reward ratio plays an important role in defining stop loss and take profit. It should be at least 1/2. That is to say, if a trader risk $1 in a trade, the profit must be $2. However, some swing traders look for more than that, 1/3 or 1/4.

after clarifying what is a swing trader in forex? we need to make a distinction between swing trader and day trader since they are used interchangeably. 

Swing trader vs day trader.

The difference of the day trader from the swing trader relies on time, capital, and psychology.

As far as time is concerned, day trader positions are opened for a short time. A day trader can open and close multiple positions within a single day. However,  a swing trader open positions for longer time that  can last multiple days, weeks or even months.

Concerning the capital, swing trading requires more capital since the trades are opened on larger time frames. Therefore, a trade of 4 hour chart requires more money than a trade of 25 minutes. Consequently, swing trader benefit from the large move of the market to make extra profits.

Finally, the psychology also is one of the factors that impact both styles of trading. A swing trader hold positions for several days or weeks which necessitate a strong mastering of emotions and feelings. Patience is a key factor in winning or losing in swing trading.

What you need to know about swing trader

When we ask what is a swing trader in forex? We should take into account the following points:

  • Swing trader in forex opens positions and hold them for a long period of time. The duration can varies from several days to several weeks or even months.
  • Swing trader in forex uses mainly technical analysis to anticipate the big moves of the market. Then, He determines the point of entry and exit points.
  • Swing trader attempt to catch big moves and make big profit with less trades.
  • Risk/reward ratio is one of the main factors in swing trading. Therefore, swing trader attempt to make it big, often 1/2, 1/3 or more.

I hope that we made “what is a swing trader in forex?” clear for you, However, if you still have questions, just drop a comment below.

You may also like to read: Types of Brokers in the Financial Market


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