Beginners Forex Education Forex Basics

Forex Beginners: The Right Approach for a Technical Swing Trader

If you are a complete beginner considering a forex trading career, a skilled individual experienced in trading stocks, commodities, or other equities, or a dissatisfied forex trader wishing to start all over again, you are probably wondering how to embark on this journey of exploring the abundant forex market with the best possible tools and advice. Naturally, any developed market, such as the one you desire to enter, has its own set of rules and needs, and it is your task to absorb whatever available material you can get by. As you may have already noticed, forex has been extensively researched and the age of technology has made this topic only more susceptible to misinterpretation, often causing confusion and concern among the interested parties. 

Sometimes any such misperception originates from inexperienced authors sharing their faulty thinking while, in other cases, the level of clarity and precision is jeopardized because of traders trying to copy the same practices they used in some other market. As the number of individuals wondering how to set off or jump-start their forex trading careers keeps growing, this article will clearly and directly provide the basics for you to start assessing the prospects of having and growing a career as a forex trader. Most importantly, you will learn about how to choose the approach to trading currencies that have not only proven to be successful in real trading but vouched for by professional traders around the globe as well.

Some experienced traders state that they required a minimum of five years to reach the professional level of trading in this market, during which they invested not only in learning but also in testing their strategies and tools of choice. Although trading at a high level, the trading elite still made mistakes and endured periods of tough learning of how to avoid some common mistakes. These learning stages sometimes involved completely destroying traders’ accounts, endangering their finances, but also the determination to differentiate between the good and bad approach, understanding that devoting time and effort will gradually give results. 

Testing thousands of indicators and applying various pieces of advice allowed them to discover fine nuances that eventually pushed them right to the top. On this path of discovery, these traders made numerous adjustments to indicators’ settings and learned how to make necessary calculations to keep their trading in line. What is more, they also learned how not to get involved too deeply in their trades and take emotions out of the equation. Owing to the variety of these steps and the extent of their willingness and eagerness to learn and grow, professional traders managed to develop their own trading systems and commit to following their plan religiously. 

With the increased number of free and unrestricted material nowadays, you can rest assured that the odds of becoming a successful trader of currencies are higher than ever before. Nonetheless, to reach this stage and to really give yourself the chance to prosper, you will ultimately need to incorporate mindset, plan, and strategy as the key concepts which inevitably determine the level of any trader’s future success. The quantity of material you have come across so far may seem to be truly overwhelming, and not knowing how to integrate the vastness of data may hinder your development as well as increase the risk of failure. Moreover, the inability to discriminate between accurate and incorrect resources can additionally hamper your attempts to be good at trading. And, last but not least, the degree of willingness and openness to being further molded by the market will either facilitate or impede your psychological growth on your path to adopting the right mindset that trading requires. So as to help you take in and absorb as much relevant information as possible, without compromising quality, each relevant piece of information in this article is going to be disclosed in a simple and linear fashion. 

Firstly, the approach that this article advocates for is inclined towards the use of indicators, as opposed to price action or naked chart trading. People’s choice of indicators will undoubtedly determine the quality of their trading experience, and the financial reward as well, which is why a portion of traders who did not choose well in the past vehemently objects to the use of these tools. Some of the most prosperous participants in this market developed highly successful systems based on the use of indicators, which further proves the point that your selection of indicators requires special attention due to which it will lead to lucrative outcomes. Any good approach to trading in this market should heavily address the topic of trading psychology that should embody the essence of every endeavor to trade in this market. 

It is so vitally important that traders grasp which traits and abilities constitute a good forex trader because the more recognition you give to this matter, the healthier and more sustainable your trading will be. By relying on the right approach to trading, you will additionally discover how, together with a suitable mindset, proper money management also forms the foundation for lasting success and is one of the crucial elements each trader needs every step of the way. Although these topics are not discussed by many, the failure to adopt the right mindset and the lack of money management skills are certainly the most common reasons why traders get disappointed and are pushed to stop trading, which is why these topics must be part of any desirable type of approach. 

Approaches to trading may differ significantly and this does not reflect the belief that necessarily only one method is good. You should always feel encouraged to keep searching for tools and tactics to fulfill their own needs and goals, but different people can have varying degrees of acceptability. Moreover, we cannot expect to assign equal significance to the same factors as other traders do. While on the surface you may find different sources to support seemingly identical values, once you dig deeper you will see how any existing differences also entail the difference in what they prioritize or hold as relevant. With the help of the general guidance provided in this article, you should be on the lookout for the system which will help you to manage your time and enjoy your day without having to sacrifice your freedom for money. You will thus increase your effectiveness without having to work long hours by default or put excessive amounts of energy into trading. 

Such an approach will also help you reduce the number of mistakes you are making, which are often caused by highly conflicting or even downright inapplicable advice. Even if you are using the best indicators that are specifically developed for trading currencies, although this is quite often fertile ground for improvement in this regard, making the same mistakes repetitively will keep pulling you back. Unless you differentiate right from wrong, you may never achieve the level of expertise even after investing great amounts of time and energy, and the approach you choose to use should be able to provide you with such assistance. What such an approach does, in comparison to the majority of others, is to offer you a self-sustaining system where you will need to put in very little effort to see tangible results. 

As you can see, by implementing the tips we reveal here, you will reap numerous benefits and the only precondition is that you invest in learning before you really start trading. Having to trade for approximately a quarter an hour a day from the moment you acquire knowledge onwards probably seems like a fair deal and, what is more, you are always advised to run demo trades to confirm the efficacy and efficiency of the tips you come across. After you discover a system like this one, you will feel confident enough to put your emotions aside, knowing that you no longer depend on the hours you invest, but precisely on this system that you have previously developed through learning. Besides learning beforehand, you should also bear in mind that an approach like this is not intended to serve as a quick solution for impatient individuals wanting to amass a fortune overnight. Such an approach, in fact, does not rely on luck and, therefore, does not advise traders to follow sources that disclose signals. 

People who are ready to take time to learn and are eager to explore whatever advice is offered to them are the ones who will benefit the most from this article. Compared to the time when forex was an entirely new market and there were no available materials and resources to turn to, traders had to learn how to develop such a system the hard way. As a result of the tips provided here, you will be able to come by a genuinely amazing functioning set of rules and tools you can use to build up your own algorithm and strategy, which are compulsory for growing your forex trading account

The first step for every beginner in this market is learning how to trade. Some of the best websites, blogs, podcasts, and YouTube channels will not assist you in understanding the key trading/financial/investment terminology, so you will have to devote some time before to study what terms such as pip or trend line stand for. Understanding how this market functions is equally essential, if not even more so, for the traders who are coming from other markets, such as the crypto market, because they often wrongly assume that the same strategies and tools are applied just because both markets revolve around the topic of trading. This assumption is often the reason why the rate of failure is so staggeringly high among these cross-overs, causing them to give up almost at the very beginning. 

Learning is hence the number one step in even attempting to take up trading in the forex market not only because of its specific mechanics but also because knowing the basics will help you construct a system you will then be able to use forever. After learning about core concepts, some of the most important topics you should also focus on include money management, trading psychology, and technical analysis. However, whatever you read, watch, or listen, always strive to fully understand why forex trading requires a unique approach and this will shorten the time your learning will require, help you opt for the right tools, and prepare you for the challenges that trading in the forex market imposes.

While the number of tips offered here may still be very high, you are advised to use a notebook/laptop and start documenting all pieces of information that you find useful. Remember to always think of forex trading from the perspective of indicators and, most importantly, trends because such an approach will lead to sustainable results. In order to maintain success and prosperity, you will also need to set up and keep improving your own toolbox as it will make the algorithm you will use in your trading. While searching for advice on how to develop your own approach to trading, make sure that you understand what this system should comprise. 

Always test whatever information you come across and, once you feel like you have found the right indicator or strategy, strive to use it consistently until something better comes along. Maintain a level of curiosity because it will keep you active and prevent you from failing to see some innovative and creative solutions to existing problems. In addition, give yourself the freedom to adjust and accommodate anything you use in trading if you feel that you could gain more success after some improvement. Last but not least, practice being patient because this characteristic will allow you to stay positive, preserve your mental health, and prevent you from endangering some long trade just because you cannot wait to see the end results. All in all, you now know that successful forex traders worldwide always invest in knowledge and tools to design the best possible strategy and algorithm, and you are thus ready to set sail and continue exploring this market to reach mastery.

Beginners Forex Education Forex Trade Types

Let’s Discuss Forex Scalping Considerations

You may have been told in the past that trading is a game of probabilities, and this is true when aligning a lot of things into account, what it does not mean however is that placing a lot of small trades quickly will give you the probability of profits.

Newer traders are now coming across scalping, a method of looking to take just one or two pips out of the markets quickly, usually along some sort of trend or pullback, it can be a powerful strategy, and sometimes trades can stay open for a matter of seconds only. It can also make vast amounts of money, so why aren’t we all doing it? We aren’t all doing it because it takes patience, a lot of risk management and most importantly, it can go horribly, horribly wrong if you do not know what you are doing. So, let’s look at a few things you need to consider before you start scalp trading.


Each broker that you see will have its own payment structure, some of them have it as an additional spread on the trades, others will charge a commission. You need to know exactly how your broker will be adding these costs to your trade. Scalping is all about taking small profits from lots of trades, if your broker is adding an extra pip on top of the natural spreads and you take a 1 pip profit, then how exactly are you benefiting? In fact, you may be making a small loss, the same can go for commissions, if you are using a broker with an added $10 per lot traded, then it may not be worth it at all, however, if you commission of $2 per lot treaded then it may be far more valuable to scalp with them. Just remember t outlook at both the commission and the spreads, combine the costs to see whether or not it is worth scalping with that broker.

Capital Requirements

How much capital do you have? You find a broker that offers you an entry point of $10, it is fantastic that they are allowing you to open an account with such a small amount and this makes it very accessible. However, you will struggle to have any sort of risk management or money management plans in place with such a small amount. You cannot go into forex thinking you will turn that $10 into $1,000,000 with small trades. Not only will the profits be very small but you also need to think of the margin requirements of trading, you may get to a point where you cannot actually open any more trades due to your margin levels which can also result in blowing (losing all money in an account) an account.

Psychology issues

Traders who trade short term trades can often be under a lot more stress than those that go for longer trades, it is a much more fast-paced affair when scalping, having to quickly analyse, work out positions, place trades and then maintain them. Due to this, you need to ensure that your risk management is pretty solid and consistent before trading any real money, putting on these quick-fire trades can also result in more losses than you may see on a longer-term trading account, but that is a part of scalping, if you cannot handle them, you should not be attempting it.


There are a number of different strategies for scalping, some are following trends, some are looking for breakouts, there are plenty of them out there. You need to get one that suits your own style and preferences. If you like trends, there is no point in trying to trade breakouts and vice versa. Finding the strategy along with the indicators that suit your own style is vital, no one has funt reading someone else’s’ strategy.

So those are a few of the considerations to take on board before you start scalping, there is no doubt that it can be profitable. In fact, it can be very profitable and satisfying as the trades are ina nd out quickly, but it takes a lot of practice and if the risk management in place is not solid and consistent, it can also be very expensive.

Forex Trade Types

Guide to FX Swing Trading Scaling Management

Regardless of what they trade, be it gold, corn, stocks, or forex, all winning traders share one key skill that sets them apart from all the other people testing their luck in their respective markets – the most successful individuals always take a portion of their profit off at some point in each winning trade. Termed scaling out, such a maneuver is a distinctive feature of all major players who have figured out their priorities, unlike the majority of participants in the market. As a strategy that each forex trader needs to adopt if they desire success and profit, scaling out can truly be perceived as the crossroads that separates two very different futures for each trader entering the market.

Naturally, if you are a beginner, you should first learn about several other topics which will help you understand forex trading better, notably ATR (which is one of the best indicators that can help traders with money management), risk management (which is a prerequisite for scaling out), and ratios (which will prevent you from falling for the same trap as everyone else). What is more, as a beginner, you should strive to look for real examples of people trading, where they explicitly describe each step of the way and test all methods and strategies yourself in a demo trade. Learning how to scale out is therefore a natural next step after learning how to calculate your risk and it is a level-up topic that requires a certain amount of effort on your behalf to adopt knowledge and information about forex beforehand. Due to the fact that scaling out is such a crucial step in developing one’s account and trader portfolio, we are going to discuss why and how you should incorporate this strategy in your trading. Note this guide is specific to technical swing trading strategies applied to the daily timeframe, but it can be applied to similar trading concepts.

The number one reason why anyone should consciously decide to scale out concerns the psychology of trading, which is distinctly different from betting or casino mindset. In fact, you can read quite a few stories about successful traders who had to learn the hard way what they should and should not do. One story even talks about a trader who experienced a lot of luck in the first trade to the extent that this led to some unrealistic expectations and, almost immediately, failure. Deciding not to learn how to scale out is what a blackjack player does when investing $100 to get $1000 only to lose it all at the end of the night. A similar phenomenon was noticeable in the crypto market not long ago, when a great number of traders were so captivated by the market’s tendency to grow that they did not take any profit off, believing that they can earn more profit this may. They failed to grasp the fact that they would still earn quite a big amount of money, pay off their mortgages, buy cars, and have a really great life even if they had reduced the initial amount they had invested. This story exemplifies the mindset of the majority where individuals always exhibit a hunger for more wealth without taking anything off the table.

These people do not understand that any system, regardless of how successful and functioning it may seem at a particular moment, can collapse in no time. Greediness is emotional and the forex trading market leaves no room for emotions and reckless reactions. The trader from the above-mentioned story believed that buying and holding forever is the best strategy, which is, however, a lesson that such traders have to pay a high price for sooner or later. Forex trading requires a calculated and precise approach that is not governed by emotions, and never getting satisfied by the level of your achievement is the exact opposite of the attitude this market can support. If a trader just keeps expecting more, they are inevitably waiting for the price to go down and one’s unwillingness to accept the state of the matter is no different from losing all your money at a poker table.

Withdrawing a certain amount of profit is the safest approach which entails that you have previously set your stop loss. What many traders fail to include here is the necessity to define their win limits as well. Every trader should know when and how to take a portion of their profit and knowing your limits can help you do this effectively. Therefore, you should consistently decide to take half of your profit at a particular point in your trade and run until your exit indicator or your trailing stop tells you otherwise. Any different approach would just make you a statistic or one of many who thought they could outsmart the system. Moreover, if you expect a price to jump from $0,02 to $25, you should know that this an unrealistic expectation and, as some traders have been waiting for this dream to come true for several decades, you may want to give yourself the freedom to learn faster. Funnily enough, even if such a scenario played out, you would probably have to lose so much down the road that no win could ever compensate for the extent of the financial disaster you put yourself through. While the rose-colored glasses cannot get you far, professional traders around the world can.

Since no expert trader enters or exits a trade without scaling out, we should really focus on what has proved to be successful in forex trading and start applying these first in a demo and then in real trades too. To make use of most tips and tools pertaining to scaling out, you are going to need to get acquainted with the ATR indicator, which has become an essential part of most expert’s algorithms. In addition to its multifaceted nature, this indicator helps traders achieve the same results as with the complex method when the ATR is used as the point of taking off half of the trade for each and every currency pair. Nevertheless, to get to this point, each trader needs to already be aware of several other key concepts and strategies.

If you are wondering how to enter a trade, you must know that you should first determine your risk or how much profit are you willing to lose before deciding to exit. This step also includes the question of how much money per pip you are actually putting at risk and ATR can be of great assistance here. Unfortunately, not all brokers automatically scale out at a certain point, so you should know how to use the numbers and information you came by without missing the price hitting your specific mark just because you are sleeping. If ATR is 80 pips, you may want half of your trade off the table at this point, but despite how successful a trade is, if you are away for any reason, any winning trade can go right back down. Since professional trading implies getting most of the winning trades, how can we bypass this annoying step? The key to resolving this issue is (for MT4 platform) in entering two half trades with one closing automatically owing to the take-profit point and the other still running. Therefore, after you enter the two trades, you will immediately insert your stop losses and put in your ATR value as your take profit, on one of them. This strategy will help you preserve half of your trade regardless of the circumstances, while the other one can run as long as necessary.

To see how this approach functions in real trading, you can look at the NZD/CHF dally chart below, which shows the ATR of 60 pips. Based on this value, we can immediately know that the stop-loss point is going to be at 90 pips (1.5xATR) whereas the take-profit point is going to be at 60. The next step would be to calculate the amount of risk, which is generally advised not to exceed 2% of traders’ entire trading accounts on each trade, and to see how much per pip we are in fact risking. The amount per pip, in this case, would be $11.60, which would equal $5.80 once split into two trades. At this point, you should insert all of the necessary information (please see the second image below) and ether your two trades. The only thing a trader should do now is to wait and avoid checking up the trades so as not to make any unnecessary move based on some emotion, e.g. impulsively exiting a trade too soon. By following these steps, you will secure yourself so that some minor losses do not impact you in the long run.

While the beginning of every trade is of vital importance, you should take several other actions the moment the price hits your take-profit level. Primarily, you should move your stop loss (90 in the example) to your break-even or, in other words, to the level you entered in the currency pair in the first place. Once the price has hit the take profit, you can rest assured that the trade in question is a winner and you cannot lose it any longer. The only question here is how much you can benefit from that particular trade. At this point, you should make use of some other tools, such as Heiken Ashi, exit indicators, and trailing stops, among others, to assist with your trade. These tools can be of great help with your second trade for as long as it runs, especially since knowing when to exit is one of the crucial elements of professional trading. No matter how well we use any tool, the time is the sole factor you should consider at this point and the only one which can grant you whether your trade will be a big win or a minor one.

In the stock market, for example, a 10—11% return is considered to be a really good result because it mirrors the stock market average. Should you be able to increase this percentage in time, you will become one of the few elite traders who are able to successfully manage hundreds of thousands to get such returns. If you are considering a specific benchmark to hit, this may as well be a great reference because these trading skills are not only ever-lasting but also in high demand. Warren Buffett for example, one of the most prominent figures on the investment scene in America, makes a 20% return per year and he surely has not achieved such success without continuously using an elaborate approach to trading and knowing how to allocate his funds effectively.

Scaling out, as we can see, is no longer optional once you decide to be good at forex trading or trading in general. You do, however, need to commit yourself to follow this system religiously, without feeling compelled to constantly micromanage your trades. Even if you encounter an unfavorable period or take a loss at some point in your trade, be patient and refrain from reacting impulsively because your stable and consistent approach to trading will even out any transient imbalance in the end. Accompanied by money management skills, scaling out is the one way you can avoid the blackjack scenario and be smart about your finances. The ability to take in all these pieces of information and apply them in a diligent and disciplined manner will only further support the development of a healthy trading mindset.

Learn how to estimate risk and make sure that all your trades are winning in a certain capacity. Rely on ATR in every step of the way and incorporate some additional tools to improve your trading skills whenever possible. If you have already taken the advice, done all necessary calculations, and enter the two trades, it is time to let go, relax, and allow time to run its course. Although this may seem like a great quantity of data, understand that after a while you will be able to make all assessments and enter a trade in as little as 15 minutes. However, whatever you do, never forget to scale out and persistently envision what your final goal in this entire endeavor is.