Swing Trading Vs. Trend Trading Vs. Range Trading

These three methods of trading on the foreign currency market are all highly tried and tested by professional traders. Some would swear more by one method than another and it does really become a matter of personal preference.

As a novice trader enters the market place, they will use one or other of these methods and work out for themselves, which trading strategy appears to pay the highest dividend in terms of profits.

Forex Swing Trading

This trading strategy is ideal for a forex trader whom is able to devote plenty of time to monitoring the progression of a market within a short period of time. A swing trading transaction will usually be completely done within 24 hours. The trader will utilize his skills of technical analysis in order to predict the expected short-term movement of a currency trading market.

This trading strategy is most suitable for forex traders that works from home or does forex trading full time. They will monitor the movements and enter and exit a trade quickly, once they've exploited the usually small movement in the market. Forex swing trading is not considered to be ideal for traders where they can not purchase or sell the relevant currency right away.

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Forex Trend Trading

Forex Trend trading is very similar to forex swing trading. Forex trend trading will be used over a longer period of time. Again, forex technical analysis skills are required to identify the current trend in the market price, between the two currencies. The forex trader will anticipate this trend continuing in the future and will exit a trade as soon as the trend appears to be reversing.

One benefit of trend trading in comparison to swing, is that you do not necessarily have to keep your eye on the market quite as much with forex trend trading. This strategy can be used for both short-term or long-term trend forex traders.

Forex Range Trading

The forex range trading strategy acknowledges the fact that most currency pairs usually have a high and low price within which they trade for around 80% of the time. A forex range trader will analyse past trading patterns in order to find the most likely lowest price in which to enter a trade. They would do the same to ascertain the most likely highest price and exit the trade once the price has reached this level.

Once you have become familiar with the way in which the currency pair you are interested in behaves, you will assume that the sell level is going to be reached at some time or other in the future. The biggest question, of course, is when? Moreover, are you prepared to have a trade open for the long-term?

If being asked to compare the effectiveness of these three forex trading strategies, it would be impossible to stipulate that one method is far better than the others. Forex traders try them all and pick the one that make them the most money. They all have their advantages and disadvantages, it boils down to personal preference and experience in dealing with this market.

My advice, there is nothing preventing you from testing these strategies for yourself. Work out which strategy that makes you money. Start with these strategies. Find small low-priced and low-risk trades and monitor the results accordingly.

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