Our swing trades can continue from 5-15 days and even more as long as the trend continues. Our swing trading strategy comprises of catching the big moves on D1 and H4 timeframes. On these timeframes, the impact of news is low. Of course a breaking news does have the potential of moving the market but we should take it as the risks of trading. The most important thing is if we manage our risk well, the chances of our suffering a catastrophic loss will be minimal. A swing trade all starts suddenly when you find an almost perfect setup. Let’s analyze a recent swing trade. Take a look at the chart below.
You can see a very clear bullish divergence pattern on H4 timeframe. This is a clear indication that the market has reached the turning point. We enter into a trade at the close of the H4 candle at the orange horizontal line. Our entry is 1.45943 and the stop loss is 1.45600. The stop loss is just 5 pips below the low of the H4 candle. Now we close the computer and go away. Either the stop loss gets hit or it doesn’t. The idea is the catch a big move. Big moves don’t develop in one day. So don’t worry too much. Enjoy life and let the trade develop. Our risk is only 34 pips. We should be prepared for this loss.
This is the second day of the trade. Price went up around 130 pips and then started retracing. Daily at 1:30 PM local time, there is important high impact GBP news release. Around that time we find price making a low of 1.46036. We make an entry and move the stop loss to breakeven for the first position. Our risk is now only 13 pips. Suddenly price shoots up on the news release which was GBP Retail Sales m/m and make a new high 200 pips up. Good move. We again close the computer and come back the third day. Daily there will be retracement. Don’t panic. This is how price moves. It makes a big move then it tries to consolidate. We make another entry at 1.47098 and move the stop loss to breakeven for the second position to 1.46036. We have now 3 positions open. Take a look at the chart below.
This is the fourth position at 1.48286 and move the stop loss to breakeven for the third position to 1.47098. Now our 3 positions are risk free and covering the new position.
This is the fifth position at 1.48802 and move the stop loss to breakeven for the third position to 1.48286. Now our 4 positions are risk free and covering the new position. We close our trade at 1.51700. So our total profit is as below:
First position: 576
Second position: 570
Third position: 470
Fourth position: 350
Fifth position: 290
Total pips: 2,256
When we open new positions, we email our subscribers of the Million Dollar Trading Challenge and explain what is happening. Since we are trading on H4 and D1 timeframes, we have ample of time to plan for the trade. We email the subscribers of our Million Dollar Trading Challenge at each step. So if you are a member of the Million Dollar Trading Challenge, you know when a new trade is coming and when we open a new position.