If you want to learn the best Forex trading techniques, the strategy enclosed in for you. The strategy we will look at is based upon swing trading and can be learned quickly by anyone, all you need to know about this strategy is enclosed and if you learn it, you are on the way to a triple digit income and long term Forex trading success.
Swing trading is based on the fact that humans make the price of currencies and humans are influenced by their emotions. When the emotions of greed and fear are present, short term price spikes occur but they quickly come back, as traders realize prices have been pushed to far to quickly.
You can look at any currency chart and see these price spikes to the upside and you will also see them end quickly. Swing traders aim to take advantage of these moves, by selling into them and make a profit when prices fall. The logic is simple enough to understand – but you also need a method to turn these moves into profit, so let’s look at how to trade these moves.
Once you have spotted a currency that accelerates higher on increased volatility, greed is at work and traders are pushing prices to quickly. You now need to measure how overbought the market is and look to enter your trading signal.
To see how overbought the currency is you can use some momentum indicators which will give you this information. We don’t have time to explain them here but there all easy to learn and apply. We like the MACD, the stochastic and the RSI but there are many more, just pick a couple you like and use them.
When a price is rising strongly. momentum will be rising. What you need to look for is a divergence of momentum from price i.e.
prices continue to rise while momentum is turning down. This is known as divergence and trading it, is one of the best currency trading techniques of all, as it’s warning you the trend is about to reverse and prices will fall.
Use divergence to enter your trading signal, your stop goes in to give you risk protection and you then set a downside target which is where you believe fair value is and take your profit.
This is a simple Forex trading strategy which is logical, east to learn and is a timeless way to make money. You can easily learn a swing trading strategy in a week or to and then, your all set to achieve trading success in less than an hour a day and earn yourself some great Forex profits.