The best MACD settings for swing trading are default settings MACD parameters EMA 12, EMA 26, and EMA 9. Other excellent swing indicators are MACD and RSI indicators. However, engulfing patterns and doji candlesticks with a combination of important price levels can be excellent swing trading indicators to determine entry positions for swing traders. The best indicators for swing trading are indicators based on important price levels such as trendlines, Fibonacci levels, Pivot point levels. Of course, swing trading with Ichimoku uses a similar approach where The Tenkan and Kijun Sens lines are used as a moving average on H4 and Daily chart. EMA200 represents the best EMA or exponential moving average signal in swing trading and long-term trading.
Swing trading professional#
The majority of professional traders use it as a signal, especially SMA 200 or EMA 200. The best moving averages for swing trading are MA 50, MA100, and MA 200 on the daily chart frame. However, traders need to know that the probability for risk-reward 1:1 trades is just a few percent above 50% because the market is tough to predict even using the best machine learning methods or any quantitative approach. For example, 10 days strong support has a bigger impact and bigger trading probability than 2 days support price level. Important price levels on the Daily chart that show strong resistance or strong support increase the probability of trade. High probability swing trading strategies are based on important price levels. Of course, some traders execute positions looking at m30 or m5 time frames because they try to enter into a position at the right moment (they look for every single pip gain). For example, they use the H4 chart to analyze market conditions but often analyze and higher time frames to better understand price action or the last several weeks’ trends.
In swing trading, professional traders use multiple time frames. This means that minute bars are a lot less significant than daily bar charts, and therefore less reliable when we trade swing trades. Minute bars are used far less frequently than the daily time frame chart. Minute bars are another time frame that some traders choose to use. This term in trading is known in trading slang as “wash up.” Traders who close the trade by stop-loss made the loss traders who wait for an hourly candle to close above stop level made a profit. In one moment, the price goes above 1.300 and after a few minutes goes down 50 pips. Traders have a stop loss at 1.3 and try to sell the position.
For example, price oscillates below level 1.300. The reason for that is market volatility, and price action that very often reaches some price level go over or under the price and then reverse in the opposite direction. Swing trading 1-chart strategies usually use hourly candle close price to enter into position or exit from the trades. In trading, a 1-hour chart is one of the most used chart time frames. This means that many people are analyzing them and are ready to take action at the sight of a buying opportunity. So what does all of this mean? Basically, it means that most eyes are on the daily time frame charts. These big players have quite a significant impact on the market and price fluctuation. The daily time frame is used the most by everyday traders and large entities, and mutual funds. The daily time frame has multiple advantages such as Įven with this flexibility, some charts are used more frequently than others. I would say that the daily time frame is still the smartest choice if you are a new trader. The daily bar time frame is the most common bar setting, and due to this, it is not seen as the most exciting time frame for trading. The daily time frame has some unique advantages, making it the best option for most traders. In high volatility periods, sometimes it is better to enter into trade faster than to wait the whole day to enter after the Daily chart closes. For example, the 4H RSI indicator can show the best trend change or divergence. On 4 hour chart, some momentum indicators represent excellent market conditions. They may then choose to use the 4-hour chart for entering positions. Most swing traders will use the daily chart to determine the general market direction. Now let’s go over an example swing trade.