Why Price Action Trading Really Complements Swing Trading
If you wan’t to be a swing trader, I really do hope you learn price action trading, because it really complements it.
Here’s how: price action helps you in finding better trade entries. Price action trading leaves you clues like bearish and bullish reversal candlesticks which can be used as your sell and buy signals.
- in a uptrend, when you see a bullish reversal candlestick in a downswing, it can be used a buy signal. These are the type of bullish reversal candlesticks you should be looking for:
- in a downtrend, when you see a bearish reversal candlestick in an upswing, it can be used as a sell signal. These are the types of bearish reversal candlesticks you should be looking for:
6 Disadvantages of Swing Trading
- Some new forex traders can find swing trading difficult to learn and do or it may not fit the trading personality of the trader.
- swing trading can take a lot of time when you are analyzing your trading setups especially if you are new to trading forex.
- swing trading setups generally tend to form in larger timeframes like the 4hr, daily, weekly and you can wait a long time before the setup happens to take a trade.
- swing trading is not necessarily a set and forget system, you have to monitor your trades regularly to move stop loss to break even, move trailing stop etc.
- a swing trader can get so attached to a trade because he may be in that trade for a while and instead of exiting and taking profits, his attachment can cloud his judgment
- As in day trading, trading discipline and risk management as well as keeping emotions in check are very important. It is not uncommon for swing traders to exit on a retrace or trend change only to have the market immediately change back and head in the original direction and to be quite honest, this is sometimes very frustrating.