The 123 Forex Swing Trading Strategy

January 2, 2017

726

The 123 Forex Swing Trading Strategy

This is a very simple method and works by identifying areas of support and resistance that forms as the market make a trend will be taken on the break of the support or resistance levels.

This is effective on a 1-hour timeframe or higher. You can use MACD as a filter indicator. this system is applicable to any currency pairs.

Short Entry Rules:

Place a sell stop order 1-5 pips below point 2.
Place stop loss 1-5 pips above point 3.
Your profit target should be placed at 3 times the stop loss distance.

Long Entry Rules:

Place a buy stop order 1-5 pips above point 2.
Place stop loss 1-5 pips below point 3.
Profit Target is 3 times the stop loss distance.

Trade Management:

Move stop loss to break even if your trade is in profit by amount risked.
If it is 2 times the amount risked, move the stop loss to lock in profit equal to the amount risked initially.

Advantages:

The use of the resistance and support which is on of the basics of trading and used by beginners.
There will be a huge price movement when the support or resistance levels are broken in a trending market at the beginning of the trend.
Price action is used or 1 t0 2 indicators.

Disadvantages:

Stop loss are large and lot sizes need to be calculated to manage the risk.
It performs poorly on a ranging or sideway market.

Use AUDUSD for template purposes.

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