How to choose indicators for swing trading

The swing trading strategy can be used in trading different instruments - currency pairs, securities, stock indexes, commodities of the primary and energy sectors, etc. The term swing trading denotes a trading style, which is based on the principle of financial markets' cyclicity. Virtually every trader has noted the regularity of fluctuations in the prices of trading assets - quotes first rise, then they fall, then the cycle repeats itself. Swing traders usually keep positions open for several days in order to profit from short-term price movements in the currency market.

Dozens of technical indicators are available to users on the most popular trading platforms. All of them are adjustable, and it is possible to flexibly change the settings of Expert Advisor to suit your own tasks. Despite the abundance of indicators, none of them is a universal assistant with 100% efficiency. Every trader uses one or more advisor indicators in their strategy taking into account their preferences and trading style. When choosing indicators for swing trading, you should follow the following recommendations:

1. Use a limited number of indicators
An excessive number of trading indicators reduces the quality of a trading signal - when one Expert Advisor gives a signal to enter, the other has already run ahead or, conversely, is late. As a result, the trader gets confused and misses the moment to conclude or finish a deal, losing profits. The number of indicators differs between strategies, experts recommend using no more than 4 indicators for timely trade signals.

2. Take into account different timeframes
Some indicators give accurate signals on short timeframes, while others work better for medium-term timeframes. It is very important to choose technical indicators for the timeframe you are used to working with.

3. Use both simple and complex indicators
The principle of operation of indicators is based on some permutation and a combination of mathematical algorithms using price and volume data. They can be either simple (such as a moving average) or complex, which are calculated using mathematical formulas. The choice of complexity depends on the trader's tasks, strategy, and trading peculiarities. The main principle in selecting technical indicators is to understand the logic of the trading signals they generate. You can combine several indicators in trading or apply different advisors on different timeframes.

Before you include an indicator in your trading strategy, test its performance and the quality of signals on a demo account. You can also improve the accuracy of signals by changing the settings of a technical indicator. You can then test the performance of the Expert Advisor with different settings, and select the ones that best suit your trading style.

Also, if you want to use all available trading tools to increase your capital as soon as possible - follow this link below, or contact us via live chat. Our experts will help you to choose the best strategy for success.