Swing trading is very popular among Forex traders as it is dynamic and profitable. However, like any other trading method out there, swing trading comes with its own ups and downs. We will discuss the details of this approach and find out which time frame is best for swing trading.
Swing Trading Definition
To succeed in Forex, each trader adopts a certain style and strategy. The strategic approach can be beneficial on several levels: it helps you stay organized and clearly assess your resources and skills. Swing trading is simply one of the categories of strategy that many traders find effective.
The definition of swing trading is partially expressed in the name itself. Swing operators aim to benefit from large changes in price movement, which could appear as notable “waves” on the chart. These waves are also called swings, and you can find them on virtually any chart. Simply: the elements between the most prominent chart elements (the highest and the lowest) form an oscillation.
Now, your next question would be what exactly counts as a swing? Any movement from top to bottom, or vice versa, no matter how insignificant? Well, that depends on your goals and expectations. As a general rule, most operators who choose the swing approach are those who tend to keep their position open between two days and several weeks. Depending on the time frame you choose, changes will appear differently. This brings us to the following question: which time frame is better for swing trading?
How to decide which time frame is best for swing trading
Of course, just as there is no foolproof strategy, there is no better time frame for the currency trading swing. However, there are certain takeaways on this issue that may be helpful. For example, traders who are not too fond of keeping their positions open overnight due to swaps can choose the Daily time frame trading strategy. Through this method, you can observe the changes that have already occurred and build a forecast for the next swing, building a support and resistance corridor, for example.
While position traders, who come in the long run can choose to assess the situation by a monthly chart. Higher time frame trading is a great way to observe a larger and more widespread picture and, as a result, achieve higher profits.
As you can see, the best chart time frame for Swing Trading is more or less to suit you and your preferences. But there is an approach that can help you benefit from several better time frames for swing operations at the same time.
Multiple time frame trading
Switching between different time frames can be very useful in both trend detection and confirmation. That’s why, instead of asking which time frame chart is best for swing trading, you should try to figure out which time frames you should combine to get the best results.
Basically, the principle of detecting oscillations will be the same: it takes a larger scale framework and outlines large price fluctuations. However, you can take it to the next level and locate precise and more optimal entry and exit points by zooming in on a smaller frame graph.
This means that the best way to trade the Forex daily time frame for swing strategies before can be effectively improved with a 4-hour or 2-hour chart. In trade jargon, the difference between large-scale and small-scale charts can also be described as the “trend chart”and the ” activation chart”. In simple words: first he sees the general direction, and then he approaches to find out the exact details.
The best time frames for Swing Trading on Forex are very similar to the best time frame for swing trading stocks: you can benefit from any possible frame, but combining them is always a win-win. Of course, you may not be able to choose the right exact solution for multiple time frame analysis from the first attempt, but as long as you continue to search for the perfect match, you will eventually succeed.
So, there’s not a single best chart for intraday trading, or swing trading, or any other strategy out there, to be fair. The best solution in the trade is always the one that works best for you. Keep experimenting and testing new things, and soon you’ll be on the right track.