Swing Strategy Basic #4: (Daily Chart Swing Trading System)

Forex Swing Traders,

Here is one swing trading system that is really simple : The Daily Chart Swing Trading System

As the names says, trade entries are based on the daily chart.

Many traders prefer to trade intraday which simply means opening and closing trades within a span of few hours or minutes. Not many traders prefer trading off the daily charts because:

1. There is not much action-the frequency of trades are less.
2. It requires strong patience-to wait for the right trading setups to happen. You can wait for days or weeks!

However, having said that, just remember that the daily chart is where the main trend forms and it can continue for week and months on end.

Everything that happens in the seconds and minutes to hours (in the smaller timeframe trades you may be taking) is largely indicated by the big moves which happens in the daily timeframe.

THE IDEA BEHIND TRADING OFF THE DAILY CHART SWING TRADING SYSTEM

1. We know that when the market trends nicely in a daily chart, sooner or later, if its in a downtrend, it will rally up or if it was in an uptrend, it will retrace or pullback down.
2. So when that happens you wait to get in at a Fibonacci level with confirmation from a stochastic indicator.

WHAT YOU NEED TO TRADE OFF THE DAILY CHART

1. You need to be on the daily chart off course.
2. You would need the stochastic forex indicator with default setting(5,3,3)
3. You also need to know how to use the fibonacci retracement tool.
4. Know The Reversal Candlestick Patterns-Use Them For Your Entries

 RULES OF THE DAILY CHART SWING TRADING SYSTEM

1. On the daily chart, if an downtrend or uptrend has begun, you wait until a rally on a downtrend begins or pullback on an uptrend begins. How do you determine if an uptrend or downtrend has begun? By Price Action! If you don’t know how to do that, then click this link: trading with the trend lessons.
2. Now you wait until price pulls back to a fibonnaci levels- Like 38.2, 50, 61.8.
3. When price hits those fibonnaci levels, check with the stochastic indicator to make sure it is either in the oversold or overbought levels.
4. Place Your entry bases on confirmation of a reversal candlestick pattern
5. Stop Loss should be place 4-10 pips under the low/or high of that reversal candlestick.
6. For take profit target levels, you can use 3 times what your risked in pips as your take profit target level or another option would be to place your take profit target on the previous swing high point.

ADVANTAGES OF THE DAILY CHART SWING TRADING SYSTEM

This is one of those forex trading strategies that would bag you hundreds of pips easily because its based on the daily timeframe.