Intraday or Swing forex trading strategies?

Intraday or  Swing forex trading strategies?

This article compares intraday and swing trading strategies.

Discussions on forex trading strategies make up the greatest part of discussions amongst traders; with many traders claiming that their style is better than those used by everyone else.  One popular debate is to do with intraday and swing strategies.

Intraday forex strategies

These are normally used by traders who prefer to open and close trades within a particular trading day. Strategies of this nature are in high demand because of the number of individuals trading intraday.

Advantages of intraday forex strategies

  • They allow traders to take full advantage of market up and down movements as the strategies are normally able to pick out dips and rises within the trading day,
  • They allow traders to wake up and close with the market thereby providing them with the peace of mind that comes with not being in the market overnight, or over the weekend.
  • With intraday forex trading strategies, traders with lower financial strength can still invest in the market as the strategies are mostly deployed on lower timeframes that see the trader employ stop loss levels that are not too wide.

Disadvantages of intraday forex strategies

  • To use this strategy requires sitting in front of the computer for extended periods of time.  This makes it unsuitable for individuals that have a day job, or those who simply can’t afford to stay glued to the screen for at least 6 hours a day.
  • Using intraday forex strategies makes it very easy for people to get caught in a range on days when the market does not have a clear cut direction. The stop losses may be small but they add up pretty quickly on days like this.
  • The trader is susceptible to spikes arising from news releases and so on.

Swing forex trading strategies

Swing forex trading strategies are most used by traders who prefer to hold trades for long periods ranging from days to weeks.

Advantages of swing forex strategies

  • Swing forex strategies allow traders ample time to make trading decisions as the trades are normally decided on once a day or once a week. This makes it a nice strategy to use for traders that having other activities to do during the day apart from trading.
  • Traders using this strategy are immune to directionless market days as they will likely be holding a trade or waiting for a trade signal.
  • Using swing forex strategies reduces the cost of trading for most traders as they only pay spread once in a while.

Disadvantages of swing trading strategies

  • Using swing forex trading strategies entails having to use wide stop loss. This makes it an unrealistic trading strategy for people trading with small funds. Even when the individual decides to trade with micro lots, a few losing trades can blow the trading account.
  • Swing trading strategies only work well during trending periods and since the market only trends 30% of the time, the trader may get only one profitable setup for the whole day.

The bottom line is for you to find and stick with what works for you in forex, as there is no best trading method.


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