Swing Trading CFDs Strategy

Swing trading attempts to take advantage of strong mid-term trends and small swings during those trends

Timeframe: a few Days to a couple of Weeks

Risk Level: Medium

Asset Classes: All asset classes

Trading Leverage: 5:1 to 25:1

Charts: H4, D1

Technical Analysis: MACD, RSI (21), Highs & Lows, Weekly Pivots, Chart Patterns, Fibonacci Retracement, Harmonic Patterns

Trading Orders: Profit Target Zones / Trailing Stop-Loss


Dukascopy Europe trades Forex, CFDs, Gold and Silver


Swing Trading Strategy

Swing trading is one of the most effective strategies in trading. The goal is to buy the dips of mid-term uptrends or to sell the highs of mid-term downtrends. You need to run your profits and cut your losses short.

Chart: Trading the EURGBP Swings on H4

Trading the EURGBP Swings on H4

Swing trading attempts to take advantage of small price reversals (or else price swings’) that occur in mid-term trends. Any mid-term trend includes short periods of correction that may be expressed either by price consolidations or by price retracements. Swing trading is based on the assumption that an existing trend, after a small correction, is more likely to be continued than to suddenly end. The trading orders of swing traders combine profit target zones or trailing stop orders.


Technical Analysis

The technical analysis of swing trading includes a little bit of everything. MACD signals on H1 and H4 charts and divergences between the MACD Histogram slope and the Price Chart Slope. Of course Highs & Lows on H1 and H4 charts. Keep an eye also on RSI (21) on D1 chart, and potential divergences between RSI and the price chart slope. Chart Patterns are always very useful in all timeframes. You can use also Weekly Pivots. More advanced swing traders use also the Fibonacci Retracement tool and the Harmonic Patterns to optimize their entrance and exit in the market.

The main advantage of the swing trading strategy is that most of the times, mid-term trends can be easily identified. The main disadvantage of swing trading is that you need to leave a lot of space for your stop-loss and that may disturb the Reward / Risk ratio.


Create Free and Export Indicators for MT4, MT5, or TradeStation to trade Forex, Shares, Indices, and Commodities


Swing Trading Pros and Cons

These are the pros and the cons for the swing trading strategy:


(↑) Swing Trading Advantages

One of the most effective trading strategies

It can be used in any Financial Market (Forex, Indices, Shares, and Commodities)

Doesn't require a lot of time, for monitoring your trades

√ It is easy to identify mid-term trends

Can help traders to take advantage of very high Reward / Risk ratios

It avoids the annoying intraday market volatility


(↓) Swing Trading Disadvantages

x It is often difficult to identify the right time to enter the market

x You are exposed to several news releases (avoid very important upcoming news releases)

x You are exposed to overnight financing


Swing Trading Strategy



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