Swing Trading vs Day Trading - Has the Debate Ended?
Within the context of the ongoing debate between Swing Trading and Day
Trading, these early results from my Methodology appear to tip
scale decisively towards Swing Trading. Only 7 trades have been done so far and
to date, the results have already beaten the Year-to-Date returns of 80% of
the Top Traders Ranked by BarclayHedge. With only 9 trades left for this
strategy to generate a 100% return for my clients (sadly,
cost of Manual will go up accordingly- see Table), Day Trading may soon by a
thing of the past as you spend less time trading and more time earning.
Currency Trading can be a very lucrative means of earning
income on a short and long-term basis. The most popular way of doing this by
traders has been to profit from the intra-day changes in a currency’s value,
during the most liquid trading sessions of the day. However, given the
difficulty of consistently modelling the random price behaviour of a financial
asset class at this micro level, sustainable success from this approach can be
an elusive goal. Instead, if traders focused on the clearer trends provided by
the Larger Time Frames, they can achieve of more consistent rate of success.
Swing Trading takes advantage of the clearer and more
reliable breakout signals and trends of the Daily and 4 Hour Charts. It is a
style of trading that is similar to Long-Term Trend trading in which positions
are taken based on the longer-term fundamental value of a currency. However,
given the time horizon of Swing Trades - 2 to 7 days- some of these trades will
either be in line with that value or diverge from it in the short-term.
Among the benefits of Swing Trading are;
- Stronger Trends with Larger Pips per Trade;
- Accuracy of Signals, with fewer False Breakouts;
- Predictable Times for Analysis and Trade Execution;
- Fewer Trades needed for Large Rates of Return;
- Compatibility with a non-Forex 9-5 Schedule;
This style of trading also allows traders to sidestep the
volatility surrounding the release of macroeconomic data each week. Several
important reports related to the major currencies can provide an indication
about market direction during the day. Nevertheless, due to the subjective and conflicting
interpretation of these by traders, large spikes in prices tend to appear, taking out small Stop Losses and eroding the Day Trader’s profitability.
In addition to the significant personal benefits, Retail
Traders will also be better able to offer their services to Prop Trading houses and
Hedge Funds that want this style of trading - earning very large commissions in the process. Based on these early results...
RATE OF RETURN FROM METHODOLOGY
...this should not be hard to do.
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