Certain currency pairs are stronger due to their close ties to the Eurozone. Swing traders can also consider looking through multiple pairs. Swing trading is one of the best ways to start off as a new trader. Always open a demo account first and practice with different currency pairs till you become confident enough to start trading. Skip to content Home Trading Forex Best Forex Pairs for Swing Trading. What is Currency Swing Trading?

Read Also: How Much Money Can I Make Swing Trading? Best Indicators to Build Quick Trades With Currency Pairs for Swing Trading Take a look at a few indicators to build quick trades with currency pairs below: Moving averages : A trend reversal happens when a pair is oversold or over bought and signals a swing opportunity. Moving averages can help a swing trader identify a trend reversal. RSI : If you are looking to make profits within a short time frame, RSI relative strength index is a great way to identify possible swing trade opportunities.

Opening positions on both oversold and overbought positions could lead to profiting off the price gain as well as its decline. Stochastic oscillator : The market momentum normally fluctuates ahead of market volume or the price. This makes market momentum a leading indicator. The EURUSD Day Trading Course shows you how to crush the forex in under two hours per day. With swing trading, typically we can look through more charts to find trading opportunities.

This allows us to maintain focus when we need it, even when analyzing multiple pairs or managing multiple positions. If new to trading, start by looking through the currency pairs in the first column of the list below. These are commonly traded pairs involving major global currencies. They will provide lots of opportunities. If you have the time, and you are trading the pairs in the first column well and according to your trading plan , consider looking through the second column.

The second column pairs are still composed of major global currencies. Only add in more currencies if you are profitable trading the first column. These traders could look for trades in the third column as well. The third column has pairs that include non-major currencies. These pairs tend to be more thinly traded and thus tend to have larger spreads. They may also have pip values that are very different than what we typically see in columns one and two. Therefore, only add these pairs if you can comfortably adjust position size based on varying pip values, spreads, and volatility.

Ideally, if trading multiple pairs at the same time, those positions should uncorrelated. We can run into traps no matter what we do. We tell ourselves a low-quality trade still has a chance of boosting our account value. Maybe a few times we get lucky, but if we take many poor quality trades, over time we will lose.

Similarly, looking through too many charts can make us feel that there are trades in all them of, instead of comparing the charts to see which one or two offer the best opportunity. Or possibly, looking through too many charts freezes us! So there is no perfect answer on which pairs to trade. Our trading styles and personalities can complicate things.

The ultimate goal is to be honest with ourselves, and no matter what, put ourselves in the best position to take quality trades. For some people that will mean limiting the number of pairs they look at. For others, it will mean looking at lots of pairs. Consider your trading style, the length of your trades, and how much time you need to put into each trade. Then, during a weekend when there are no trades to distract you, come up with a plan of action that works best for YOU.

And no matter what pairs you trade, make sure you know how much position size of that pair you should be trading on any given trade. Write down which pairs you are allowed to trade in your trading plan—your written document that outlines how you trade. Disclaimer: Nothing in this article is personal investment advice, or advice to buy or sell anything. Trading is risky and can result in substantial losses, even more than deposited if using leverage. Cory is a professional trader since In between trading stocks and forex he consults for a number of prominent financial websites and enjoys an active lifestyle.

He runs TradeThatSwing and coaches individual clients. Keep triangle balanced for risk control and if one leg is unbalanced use stop loss only on THAT LEG. Thank you. I have never traded that way, so not sure if it is good or not.

After which, it is recommended that the trader zoom into the next lower timeframe from your trading timeframe, which in this case would be a four hour chart, to fine-tune the trade entry.

The main take away here regarding multi-timeframe analysis is, regardless of the specific trading timeframe that you utilize for finding your trade setups, you should always confirm the bigger picture by going to the next higher timeframe.

In addition, you should refer to the next lower timeframe from your trading timeframe to pinpoint the best entry point. Here are some combinations of swing trading time frames, and the associated higher timeframe for trend analysis, and lower timeframe for fine-tuning entries. Depending on your specific swing trading methodology, you may need to revise this a bit.

But generally speaking, the above outlined swing trading time frames are the ones that you will likely focus on for the most part. They are the most widely watched among swing traders, and thus offer the best clues as to what other traders are thinking and positioning themselves.

Personally, the best forex swing trading signals that I see come from the daily chart. As swing traders, we want to trade those instruments that have a high level of trading activity in terms of volume and thus offer great liquidity.

Additionally, we want to ensure that the currency pair has sufficient volatility. Liquidity is important because it provides us the ability to trade in and out of our positions with minimal slippage cost or market impact.

The most liquid forex instruments include the major currency pairs, and a few cross currency pairs. As for the requirement that are chosen instrument have a sufficient amount of volatility , what that essentially means is that we want to ensure that the instrument has enough movement for a trade to make sense. This condition will further narrow the prospect list.

Below are the five best Forex pairs for swing trading based on having both high liquidity, and high volatility characteristics. EURUSD — This is the most liquid currency pair within the foreign exchange market. It is widely traded throughout the globe, and the price movements within this pair make it ideal for a swing trading approach. GBPUSD — The British Pound to US Dollar currency pair is very actively traded.

It often has a strong correlation to the EURUSD currency pair. AUDUSD — This is a favorite among traders in Australia and the Far East. EURJPY — This is a very liquid cross currency pair that is often characterized with large daily price swings which can sometimes exceed pips. It is a favorite among more active swing traders looking to capture short-term price trends. GBPJPY — The Pound to Yen currency pair is highly volatile, and is most active during the European and Asian sessions.

Minimal Time Commitment — Most swing trading strategies can be managed in less than an hour a day. This is something that is hard to grasp for many beginning traders, but it is certainly true if you have a focused process in place. Lower Transaction Costs — Many forex swing trading systems will only trade several times per week. As such, you can expect to generate approximately 75 to trades per year.

This is the normal range of activity for most swing traders. Compare that to day traders who will routinely take several trades per day. This can result in anywhere from several hundred to even a thousand trades or more per year.

When you factor in the total transaction costs including the indirect costs of bid ask spreads , slippage, and commissions, a swing trading methodology will clearly be less expensive. More Reliable Trade Setups — With a swing trading approach, you will be focusing on holding positions for as little as a few days to as long as a few weeks. The price patterns that occur on the various swing trading time frames are much more reliable compared to those that occur on both the smaller day trading timeframe, and the larger position trading timeframe.

The day trading timeframe is filled with noise which can make it extremely difficult to trade efficiently. The position trading timeframe can be heavily influenced by both fundamental and geopolitical factors which can also make it more challenging.

More Types Of Strategies To Test — The majority of long-term position trading systems tend to be trend following in nature. They will typically look for some sort of momentum breakout, and seek to enter in the direction of the breakout for a potential trend move.

Many daytrading systems are based on a volatility breakout methodology, or some sort of mean reversion technique based on short-term sentiment extremes. Swing traders will find that there are many different types of trading styles, and methodologies that they can study and use to build their own customized swing trading EA or model.

Typically, foreign exchange traders fall into four classes: scalpers , day traders , position traders , and swing traders. On the other hand, day traders and swing traders fall somewhere in the middle of the continuum. In particular, day trading involves opening and closing positions within a single trading day. The approach aims to exploit the intraday volatility in the market. For swing traders, the time frame is longer than both day trading and scalping but often shorter than position trading.

Each trading strategy fits a particular class of traders, and it could be inappropriate to pronounce any as the best. Nevertheless, today we will spend time on swing trading, emphasizing the best currency pairs to apply this strategy. Swing trading is a forex trading style used to exploit price swings for profit. The market must experience substantial pressure from external forces to produce such a sharp shift in price action. The external force could be an unexpected interest rate decision or any other event with a massive impact on the global foreign exchange market.

A swing trader, therefore, aims to exploit the sharp shifts in price action. But this means one must be able to anticipate the swings. Unfortunately, some of the sudden changes are unpredictable, but experienced traders can foresee some. We should reiterate that swing trading is neither short-term nor long-term.

The trading style falls anywhere from holding a position for a day-and-a-half and several months. Most importantly, it would be best to catch a swing when it happens, and the earlier you do it, the better.

The most exciting part of forex is that you can trade both sides of the market. In the same breadth, price action swings can happen when the market is trending upwards or in a downward descent. Swing high and swing low are critical concepts for successful swing trading. Although different traders have different definitions, below is the market consensus on the definition of swing. A swing high refers to the peak that price action reaches before commencing a decline.

This phenomenon forms when the market is trending up. To spot a swing high on a candlestick price chart, look for the highest candle just before a correction.

On the other hand, swing lows form in a down-trending market. Usually, it is the lowest price point on a chart immediately before an upward correction. Swing highs and lows are critical concepts when identifying the right swing trading strategy.

They indicate when to enter or exit the market and when to execute. Typically, swing highs and lows form in a ranging market. So far, it is apparent that swing traders thrive in a market with sufficient volatility to generate sharp shifts in price action.

By extension, the best currency pairs for this trading style must fulfill the two necessary conditions below. Volatility in forex refers to the price gyrations of currency pairs. Typically, a volatile pair records a substantial difference between the opening and closing prices, often more than 50 pips. Usually, pairs involving safe-haven currencies like the US dollar exhibit more stability hence lacking requisite volatility. Contrarily, emerging market currencies tend to fluctuate a lot, meaning the associated pairs are often volatile.

Liquidity is essential for two primary reasons: Traders need to lock in profits, meaning they need their sell orders fulfilled in good time. Secondly, they need to limit losses. It means being able to rely on the stop-loss order to execute at the required price point. From the preceding, the following below are the best forex pairs for swing trading. The Australian dollar AUD has an exciting relationship with the Japanese yen JPY.

For starters, the AUD is popular in risk-on markets — when risk appetite is high. Traders love the currency in such conditions because it tends to generate returns.

More importantly, the AUD is backed by an economy that trades mainly with emerging markets in Asia, whereby Australia exports commodities like coal to China and other Asia Pacific countries. The problem is this relationship only pays off when the global economy is stable. As such, the AUD often exhibits high volatility. The JPY is a diametric opposite of the AUD, primarily because it becomes attractive in risk-off market conditions. Traders view the currency as a safe haven, one that safeguards value in a downturn.

Thus, the AUDJPY displays substantial volatility and is prone to sudden swings. In addition, the currency pair consists of major currencies whose global demand is sufficient to maintain an acceptable liquidity level. Interestingly, the CADJPY displays the same relationship as AUDJPY. In the first place, the CAD also relies heavily on commodity exports, making it prone to volatility. This also makes the currency attractive in risk-on markets. Contrariwise, and as already discussed, the JPY only catches the attention of risk-averse traders.

Since the Brexit vote, the British pound GBP has been one of the most volatile currencies in the world. This worsened during the Brexit negotiations, whose highlight was elevated uncertainty. We are yet to see the finale to the Brexit debacle, meaning the currency still rests on a shaky foundation going forward. On the other end of the coin, the AUD is among the top five most volatile currencies in This has a lot to do with the Australia-China geopolitical tensions and trade disruptions due to the global pandemic.

Put together, the GBP and the AUD produce a forex pair capable of swings that could make a swing trader drool. Volatility is hard to predict, but traders with the right tools and knowledge can anticipate it. Skip to content Typically, foreign exchange traders fall into four classes: scalpers , day traders , position traders , and swing traders. Introduction to swing trading in forex Swing trading is a forex trading style used to exploit price swings for profit.

Swing high vs. swing low The most exciting part of forex is that you can trade both sides of the market. Best currency pairs for swing trading So far, it is apparent that swing traders thrive in a market with sufficient volatility to generate sharp shifts in price action. The currency pair should exhibit substantial volatility. The currency pair should have sufficient liquidity. AUDJPY The Australian dollar AUD has an exciting relationship with the Japanese yen JPY.

CADJPY Interestingly, the CADJPY displays the same relationship as AUDJPY. GBPAUD Since the Brexit vote, the British pound GBP has been one of the most volatile currencies in the world. The bottom line Volatility is hard to predict, but traders with the right tools and knowledge can anticipate it.

Please Share This Share this content Opens in a new window Opens in a new window Opens in a new window Opens in a new window Opens in a new window Opens in a new window. Leave a Reply Cancel reply Comment. Enter your name or username to comment. Enter your email address to comment. Enter your website URL optional.

As a professional trader, I really appreciate your Idea and off-course it will work rest on the future. Thank you providing free info. Enter your name or username to comment. Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website. Key roles include management, senior systems and controls, sales, project management and operations. For starters, the AUD is popular in risk-on markets — when risk appetite is high. Having the ability to trade Forex around my work schedule was a huge advantage.

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