Swing Trade Example Number 1 – A currency pair is oscillating on the H4 chart and is coming down, just let it finish the down cycle and stall then set a buy alarm at R1 for a buy and ride the new H4 cycle back up to resistance.
Swing Trade Example Number 2 – In this example the currency pair you want to trade is in a long term strong uptrend on the W1 time frame. Position trading is when you enter a trade when the D1 or W1 time frames red and green lines are crossing on the free trend indicators, guided by The Forex Heatmap®. Position Trading Examples – The D1 time frame fresh trend cross or developing fresh cross qualifies as a position trade using our free trend indicators.
The proper way to trade the spot forex is swing styleor longer term position and trends, and the risk reward ratios clearly support this. Most forex traders are scalpers, at Forexearlywarning we use swing and position trading styles due to the highly favorable money management and due to the general trending nature of the market. The general definition of scalping is generally entering a spot forex trade for less than 15 minutes to one hour looking for 10 or 20 pips of profit, sometimes even less.
If you inspect many H4 time frames and cycles you will see that each 4 hour bar on the bar chart adds up to approximately 3 to 6 days of holding time possibly longer. This way when you take the time and effort to trade the potential reward is significantly higher. You can play the embedded H4 swing cycles within a longer term trend, or if a currency pair is oscillating on the H4 time frame you could wait for one cycle to finish then when the pair reverses catch the new cycle, similar to the photo above. On a significant support or resistance break you enter the trade with confirmation from The Forex Heatmap®. The red and green line crossing look similar to the chart above just on a larger time frame. Any reasonable person knows that this level of profit is way too small for the risk of entry and we do not teach this style at Forexearlywarning for a multitude of reasons listed below. Each time the H4 red and green trend lines cross you can enter the trade using The Forex Heatmap® for entry verification. Obviously if the larger trends like the W1 time frame trends accompany the D1 fresh cross then the potential could be much higher on the W1 time frame. This is not scalping but is clearly intra-day trading, and still within the boundaries of what we teach at Forexearlywarning.
If you know scalping has no future stop doing it now and start using the trading style you intend to stick with for the long term.
It will wear them down mentally while position traders are hanging on to their trades for weeks at a time. Sometime a fresh W1 time frame cross can be found, when you see one once again all you have to do is verify the entry with The Forex Heatmap® and you could have a longer term or position trade. At Forexearlywarning we write trade plans with a basis of swing and position style plans and always trading in the direction of the major trends on the forex market.
Anyone who successfully trades the spot forex has to hold onto their trades longer, even scalpers know this (and so do the brokers) but some traders will not admit it.
This works on trending or oscillating pairs, see the image below for an example of an oscillating pair. If you ask forex traders if they want to scalp they do not really want to do it but they do it anyway.
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