A swing trader may have started as a day trader. As the market kept moving in the desired direction, either they scaled out of a portion of the position, set a stop loss objective and kept the trade running.
So, many day traders eventually end up being swing traders when they see the trend continuing and dont wont to let go the opportunity of riding the trend. A swing trader is also considered to be a mini position holder. Swing traders need to focus on higher degree time frames and spend less time on 5-15 minutes time frames regardless of how swing trading started.
5-15 minutes charts will generate too many short term signals if you are a swing trader holding a position for a few days. The most reasonable time frames for a swing trader are the 60 minutes (hourly), 240 minutes (4 hourly) and the daily charts.
You should use pivot points in your trading. Using pivot points will give you an edge as a trader. Swing traders should give more attention to the daily, weekly and the monthly pivots as far as the pivot point trading is concerned. It helps them to be aware of the confluence of any support or resistance. This information will help them to identify potential entry or exit targets.
Keep this in mind that as a day trader, you are not so much concerned with long term macroeconomic conditions as you are with riding a momentum wave. The same is also true for a swing trader. As a swing trader you are simply looking to ride from a move and profit from it. This is your job.
In short term trading conditions change. You need to capture opportunities as they arise. Forex markets are ideal for momentum trades. The forex market tends to trend well over the course of 3-10 days. This allows swing traders opportunity to capture larger price swings over a given period of time.
The biggest advantage that forex markets have over stock markets is that you have access to the forex market over the 24 hours period unlike the equity markets. Therefore, you can monitor your positions, place stops and take action to exit a trade at any time, day or night.
Swing trading is slightly more advantageous in forex market due to the fact that it is a 24 hour market and because of the time frame involving several days in swing trading. There are very few times that gaps occur because of this continuous market action.
Carry a day trade through the overnight session if it moves sharply in your favor. However try not to hold a position over the weekend. Your entry was correct if the trade starts making money in your favor from the let go. Do not carry your losing position to the next session.
Never get fancy and try to get a better fill by placing limit orders when you enter a bona fide trading signal. Go to the market before your competitors. Wait until the close of the period to confirm the signal. Never anticipate that a signal will happen.
