Is Swing Trading in Overseas Forex the Best Trading Method? | A Complete Explanation of How to Do It and All the Tips

Are you busy working every day but want to earn some extra income through FX trading?

However, I lacked both the time and energy for short-term trading, and I wasn't able to earn as much as I wanted

For someone like you, I recommend a medium- to long-term trading style called "swing trading."

This article will show you how to aim for profits without overexerting yourself, even with limited time

■What you will learn from reading this article

1. Characteristics of swing trading and how it differs from other methods
2. Advantages and disadvantages of swing trading in overseas forex markets
3. Recommended overseas forex brokers and key points for choosing one
4. Practical tips and precautions for increasing your win rate
5. How to use the most effective method that even beginners can try

If you read to the end, you should see a path to achieving stable profits without having to constantly monitor the market

If you're new to overseas forex trading, we recommend reading the complete guide for overseas forex trading beginners

What is swing trading?

Swing trading is a style of trading where positions are held for several days to several weeks, aiming to profit by riding the medium- to long-term trends of the market

Since it eliminates the need for frequent buying and selling, it's also suitable for people who don't have time to check the market every day

In particular, overseas forex trading offers high leverage, allowing for highly efficient capital management

You can trade while carefully identifying trends based on technical analysis and economic news

Furthermore, because it doesn't require constantly monitoring charts, it's popular among people with limited time, such as office workers

Its key feature is that it makes trading easy and calm, even for beginners

What are the advantages of high-leverage trading in overseas forex? We'll introduce methods for increasing your capital starting with a small amount and recommend some brokers!

Characteristics of Swing Trading

A key characteristic of swing trading is that positions are held for periods ranging from several days to several weeks

This allows you to trade calmly without being swayed by short-term price fluctuations

are often determined primarily using technical analysis

For example, indicators such as moving averages, MACD, and Ichimoku Kinko Hyo are used to grasp market trends

Furthermore, fundamental factors are also incorporated, so we pay attention to economic indicators and statements from key figures

When trading with overseas forex brokers, you also need to pay attention to the swap points and spread conditions

Since you're not constantly trading several times a day, the mental burden is relatively light, making it easier to stick with, which is a major advantage

Overseas Forex Spread and Commission Comparison List | Introducing Zero Spread Accounts and Brokers with Narrow Spreads

A thorough comparison of swap points for overseas forex brokers: Calculation methods and introduction of swap-free brokers

Differences between swing trading and other trading methods

Swing trading involves less frequent trades compared to scalping and day trading, with positions typically held for several days to several weeks

Scalping involves completing trades in a few seconds to a few minutes, and day trading involves completing trades within a day, while swing trading involves trading on medium- to long-term trends

Therefore, it doesn't require constant monitoring of market prices, making it easy for busy people to implement

Unlike position trading, where positions are held for several months, this method allows for easier adaptation to market changes

Furthermore, with overseas forex trading, you can leverage high leverage to trade efficiently even with a small amount of capital

By paying attention to transaction costs and the accuracy of chart analysis, you can expect stable profits

Recommended Overseas Forex Scalping Account Comparison! A thorough explanation of why you might not be winning and what to avoid!

Swing trading in overseas forex is recommended for these types of people

Swing trading requires an investment strategy that suits each individual's lifestyle and personality

While it offers many benefits to those who are suited to it, those who are not suited to it are likely to fail if they try to force themselves to do it

Therefore, in this chapter, we will explain in detail what kind of person is suited to swing trading

Overseas forex trading offers high leverage and a flexible trading environment, so it's important to find a style that suits you

Check each point while considering whether it suits your personality and lifestyle

People who have limited time available for transactions

Swing trading is ideal for people who have limited time for trading, such as those who work during the day

This is perfect for people who are busy every day and only have time to themselves after returning home

"I can't spend all my time watching charts, but I want some extra income." This is perfect for people like that

For people like this, simply checking charts and reviewing their strategies once a day is usually sufficient

Using an overseas forex broker that allows you to easily place orders on your smartphone is appealing because you can manage your investments without disrupting your daily routine

• Many office workers have long working hours and cannot spend time at their computers every day
• Housewives and househusbands who don't have the time to keep up with the market due to housework and childcare
• People who want to try FX as a side hustle but have limited time

People who have the mental fortitude to remain unfazed by unrealized losses

In swing trading, it's not uncommon to incur temporary unrealized losses after entering a trade

Therefore, it is suitable for people who can remain calm and make sound judgments without being swayed by short-term gains or losses

Those who can remain calm and act according to the rules are more likely to achieve stable operations

For example, people who can maintain an attitude of "adhering to stop-loss lines" and "observing the situation based on predictions" tend to have a higher winning percentage in the long run

On the other hand, people who panic and close their positions every time they see a loss tend to continue losing money

Features	remarks
Don't rush into making a decision	Don't rush the results
A diligent and steady personality	I'm good at sticking to plans
Follow the trading rules	Stay steady throughout
Prioritizing stability over profit	Emphasis on steady results

People who want to aim for big profits in a single entry

Swing trading is suitable for people who want to achieve big results with fewer opportunities rather than making many small trades

These types of people are strategic thinkers who believe in "quality over quantity."

For example, by finding a pullback on a daily chart and riding a major trend, it's possible to aim for a profit of 100 pips or more

By using the high leverage offered by overseas forex brokers, you can expect to make substantial profits even with a small amount of capital

People of this type excel at carefully analyzing situations and determining the right timing

• I want to aim for a "big win" rather than small profits each time
• I want to prepare carefully and win in one go
• A cautious type who thoroughly analyzes the timing of entry

People who are sensitive to economic news and international affairs

In swing trading, fundamentals such as economic indicators and monetary policy have a significant impact on price movements

Therefore, it is a significant advantage for people who regularly check the news or are interested in the background of exchange rates

Understanding that "exchange rates are influenced by global events" and having no trouble gathering information makes this a very powerful tool

For example, by developing a trading strategy that takes into account the Federal Reserve's policy announcements and employment statistics, you can make more accurate entries

Those who can sense from the news that "this is likely to affect the market" will likely excel in swing trading

• I am interested in economic trends
• I want to analyze the factors that influence exchange rates myself
• I like to learn about world events
• I'm good at gathering information

Recommended overseas forex brokers for swing trading

Now that we understand what swing trading is and who it's suitable for, let's look at which brokers you should use

There are many overseas forex brokers, but not all of them are suitable for swing trading

You need to choose a broker based on a comprehensive assessment of factors such as the trading environment, leverage, spreads, and server stability

In this section, we will introduce three brokers that are well-suited for swing trading and are highly regarded by domestic traders

All of these companies have a proven track record and are reliable choices for beginners to intermediate users

Please use this information to help you choose the right service provider for you by comparing their features

Company name	Maximum leverage	spread	Swap conditions	Points for your swing
Exdefine	Maximum Unlimited	0.0 pips and up (zero account)	Some have positive swap	Zero accounts offer low costs and high leverage for flexible trading
Titan FX	Up to 500x	0.0 pips and up (Blade account)	Stable and with minimal negative impacts	The balance between execution power and cost makes it suitable for swing trading
ThreeTrader	Up to 500x	0.1 pips ~	Many positive swaps	Attractive features include long-term holding swaps and cTrader

Exness | Excellent swap conditions, ideal for long-term holding

Source: Exness

Exness is a popular broker among swing traders due to its flexible leverage and high cost-performance ratio

Zero Accounts, in particular, minimize trading costs, making them ideal for traders who hold positions for several days to several weeks

Furthermore, some currency pairs offer positive swap points, making them advantageous for long-term holding

In addition, the server stability and smooth execution are highly rated, allowing you to continue trading with peace of mind

It supports both manual and automated trading, and its simple operation is a reassuring point for beginners

Swing-related evaluation items	Content
Maximum leverage	Unlimited (with conditions)
Spread (approximate)	0.0 pips and up (zero account)
Account types and features	Zero Account: Fees apply, extremely low spreads
Swap conditions	Some currency pairs are advantageous (may have a positive impact)
Execution capability and trading stability	High standards (servers only a major company can offer)
Supported Platforms	MT4/MT5

A thorough investigation of Exness's reputation | From safety to rumors of withdrawal refusals

Titan FX | Reliable execution for secure swing trading

Source: Titan FX

Titan FX is an STP (Straight Through Processing) broker that boasts stable execution and low spreads, making it possible to trade with confidence even in swing trading

In particular, Blade accounts offer extremely narrow spreads on major currency pairs, minimizing commission costs even when holding positions for extended periods

The swap points are also relatively stable, and the fact that it's unlikely to be extremely disadvantageous even with long-term holding is reassuring

Furthermore, it is known for having minimal slippage during economic indicator announcements, and its high execution speed is an important point for swing traders

Swing-related evaluation items	Content
Maximum leverage	500 times
Spread (approximate)	0.0 pips and up (Blade account)
Account types and features	Blade Account: Narrow Spread + Commission-Based
Swap conditions	No extreme negatives, stable trend
Execution capability and trading stability	Highly rated (low slippage)
Supported Platforms	MT4/MT5

TitanFX Reviews and User Feedback: A Thorough Investigation of Safety and Withdrawal Refusal Cases (TitanFX)

ThreeTrader | Enables low-cost and efficient medium- to long-term trading

Source: ThreeTrader

ThreeTrader's biggest strength for swing traders is its wide selection of currency pairs with very favorable swap conditions

For some pairs, the swap can be positive even when held for a long period, helping to increase profits

Furthermore, the transaction fees are modest, making it attractive because even a few transactions won't result in high costs

Furthermore, it is compatible with cTrader, making chart analysis and order book information easy to use, providing the necessary environment for swing traders

Although it's a relatively new company, it has a reliable license and a good reputation for withdrawals

Swing-related evaluation items	Content
Maximum leverage	500 times
Spread (approximate)	0.1 pips ~
Account types and features	Classic Account: Low Spreads + Low Commissions
Swap conditions	Many favorable currency pairs (with positive swap points)
Execution capability and trading stability	Stable operation (no major problems reported)
Supported Platforms	MT4/cTrader

Threetrader's Reputation and User Reviews | Thorough Investigation of Withdrawal Rejection Cases and Security (Threetrader)

5 Advantages of Swing Trading with Overseas Forex Markets

By engaging in swing trading with overseas forex brokers, you can take advantage of features not available with domestic accounts

In particular, the high leverage, zero-cut system, and low-cost environment make it very compatible with the swing

Even those who are too busy during the day to monitor the market can efficiently manage their funds and more easily aim for long-term profits

Here are five key benefits of practicing swing trading in overseas forex trading

Please use this as a hint to find weapons that suit your style

5 Benefits	point
1. You can make large trades even with a small amount of capital	High leverage and good capital efficiency
2. The stop-loss level is low, allowing for persistent holding	Strong against unrealized losses and good at waiting for trends
3. Risk is limited as there are no margin calls	With zero-cut loans, you don't have to worry about debt
4. You don't have to constantly monitor the market	It's easy to continue trading even when you're busy
5. Low cost burden due to spread	Fewer transactions mean lower costs

Swing trading has many appealing aspects

Let's take a closer look at the advantages of each

1. You can make large trades with a small amount of capital

With overseas forex trading, you can use high leverage, ranging from 500 to 1000 times

This allows you to trade in large lots even with a small initial investment

Swing trading involves holding positions for several days to several weeks, and its appeal lies in the ability to dramatically increase capital efficiency by leveraging the power of leverage

For example, even with a margin of 100,000 yen, you can hold positions worth millions of currency units, and aim for significant profits even in short-term trends

However, risk management is essential, and it is important to use this method while adjusting the lot size

Overseas Forex Leverage Comparison! Recommended Brokers with Leverages from 1000x to Unlimited, and a Summary of Regulatory Rules Including Calculations and Limitations!

2. The stop-loss level is low, making it easier to maintain positions

In swing trading, it's common to hold positions for several days to several weeks while incurring unrealized losses

If the stop-loss order is triggered too early, the position will be forcibly closed before the market recovers, and the loss will be finalized

One advantage of overseas forex trading is that stop-loss levels are set relatively low, such as 20% to 50%, making it easier to hold out

On the other hand, domestic FX brokers are generally subject to a stop-loss order when the margin maintenance ratio falls below 100% due to legal regulations, which means they have less resilience to unrealized losses

For example, even if your position's unrealized losses temporarily increase, with overseas forex trading, you may have more time to wait for a rebound

This type of system is very well-suited to styles that follow long-term trends

[Overseas Forex] What is a stop-loss? Explanation of its meaning, calculation method, and levels for beginners

3. You can prepare for unexpected losses without margin calls

Most overseas forex brokers employ a zero-cut system

This system ensures that you will not be asked to make additional deposits even if your account balance goes negative

Even if you incur significant losses due to sudden market fluctuations or economic indicator announcements, your losses will be limited to the amount of your margin deposit, so you can rest assured

Swing trading involves holding positions for several days, which inevitably exposes you to the risk of unexpected events

However, allows you to have peace of mind knowing that you can trade without worrying about debt

4. You don't need to constantly monitor the market

This is common both domestically and internationally, and is not a characteristic unique to overseas forex trading

The fact that you don't have to constantly monitor the market is an inherent advantage of the swing trading method itself

In swing trading, while there may be some ups and downs while you hold a position, there is no need to get overly excited or discouraged by small daily price fluctuations

In particular, by utilizing the order reservation function (limit orders, stop orders, OCO orders, etc.), you can automatically take profits or cut losses, eliminating the need to constantly monitor the market

Overseas forex brokers also have all the basic order functions available, so you can use them with peace of mind

This can be considered a significant advantage for busy office workers, parents, and others who want to conduct transactions efficiently within their limited time

5. Easier to keep transaction costs (spread) down

In swing trading, the number of trades is small, so the impact of costs from spreads is inherently smaller

This point, too, is a characteristic of the swing trading method itself, not just limited to overseas forex trading

However, many overseas forex brokers offer narrow spreads and low fees, which can make trading more advantageous in some cases

For example, accounts like Exness's Zero Account and Titan FX's Blade Account have very low costs per trade

Therefore, it can be said that it is well-suited to swing trading, where the profit margin per position tends to be large

If you want to further enhance your cost advantage, it's a good idea to compare and choose from the different account types offered by overseas brokers

Five disadvantages of swing trading in overseas forex markets

While swing trading offers many advantages, there are also disadvantages that you should be aware of

There are several points to be aware of, especially due to the unique mechanisms and environment of overseas forex trading

To consistently make profits from trading, it's important to consider not only the positive aspects but also the risks

Here, we've summarized five disadvantages you should be aware of when engaging in swing trading with overseas forex brokers

Understanding this beforehand will allow you to manage things wisely while taking appropriate measures

5 disadvantages	point
1. Transaction costs are higher compared to domestic companies	Pay attention to fees and spreads
2. Increasing the lot size too much increases the risk of stop-loss	High leverage trading may result in forced liquidation
3. Swap points tend to be unfavorable	Profits are reduced by negative swaps
4. It will take time to reach the target profit	It is difficult to make short-term profits
5. You need to be able to withstand unrealized losses over a long period of time	If you have a weak mentality, you're more likely to cut your losses midway

These disadvantages can be easily avoided by being aware of them in advance

Let's take a closer look at the disadvantages of each

1. Transaction costs are higher compared to domestic companies

Overseas forex trading often features wider spreads, and some accounts (such as the ECN-based "Zero Account" and "Blade Account") also incur trading fees

This "wide spread" is the main reason why trading costs are higher than with domestic brokers

The spread is an invisible cost incurred when placing and closing an order, and it becomes a significant burden, especially as the position size increases

Although swing trading involves fewer trades, the positions opened per trade are often large, so the impact of these costs can sometimes be surprisingly significant

Note that "transaction costs" here refer to spreads and fees, and are different from swap points while holding a position (swap points will be explained later)

To create a favorable trading environment, it's important to choose an account type and broker with the narrowest possible spreads

Overseas Forex Spread and Commission Comparison List | Introducing Zero Spread Accounts and Brokers with Narrow Spreads

2. Increasing the lot size too much increases the risk of stop-loss

One of the attractions of overseas forex trading is that you can use high leverage, allowing you to take on large positions with a small amount of capital

However, increasing the lot size more than necessary can cause even small price movements to lower the margin maintenance ratio, potentially leading to a stop-loss

Since swing trading is based on long-term holding, periods of unrealized losses tend to be long, and setting excessive lot sizes is dangerous

For example, if the margin maintenance ratio falls below the stop-loss level due to a price movement against you, your position will be automatically closed

If you don't thoroughly manage risk, such as setting stop-loss orders or adjusting lot sizes, even a good trade will lose its meaning

Beginners in particular should try to avoid setting excessively high lot sizes

3. Swap points tend to be unfavorable

In swing trading, positions are held for several days to several weeks, so swap points (adjustments for interest rate differences that occur while a position is held) affect profits and losses

In overseas forex trading, swap rates are often set at a less favorable rate compared to domestic forex trading, which can gradually become a cost over long-term holding periods

In particular, positions selling high-interest rate currencies can result in large negative swaps, which can directly lead to unexpected losses, so caution is advised

For example, short positions in Turkish lira or South African rand can incur swap fees of several tens of yen per day

In swing trading, which is based on the premise of long-term holding, choosing currency pairs with favorable swap rates is also an important strategy

A thorough comparison of swap points for overseas forex brokers: Calculation methods and introduction of swap-free brokers

4. It will take time to reach the target profit

Swing trading is a style that aims to capture trends over the medium to long term, so it is usually difficult to make large profits in the short term

Especially in situations where the market is consolidating, the holding period for positions tends to be longer, and it can be difficult to reach profit-taking targets

For those who want to accumulate profits every day, like with day trading or scalping, swing trading might feel frustrating

Furthermore, the longer you hold a position, the longer your capital will be tied up

Therefore, you may experience missed opportunities or mental stress

With these points in mind, it is important to carefully develop a strategy

5. You need to be able to withstand unrealized losses over a long period of time

In swing trading, it's not uncommon for the price to move in the opposite direction immediately after you enter a trade

Therefore, it is common to incur unrealized losses while holding a position for several days to several weeks, and you need the mental fortitude to withstand this.

If you get scared and cut your losses midway through, you might miss out on the trend you were originally aiming for, resulting in a wasted opportunity

For people who are overly sensitive to losses or who become anxious by constantly monitoring price fluctuations, this can be a source of significant stress

To overcome this disadvantage, setting stop-loss rules in advance and trading with smaller lot sizes are effective strategies

Swing traders need the ability to continue trading without being swayed by emotions

The ultimate swing trading strategy for overseas forex markets ① | Trend Following

To consistently aim for profits in swing trading, the concept of "trend following," which involves riding the market trend rather than going against it, is extremely important

Especially with overseas forex trading, you can choose highly volatile currency pairs and markets with large price movements, making it easier to profit from price swings by riding the trend

This section will explain everything step-by step, from the basic concepts of trend following to useful indicators, how to choose the right timeframe, and entry and exit points

This is a classic strategy that is easy for beginners to adopt and has great versatility, so be sure to understand it thoroughly

What is trend following?

Trend following is a trading strategy that involves buying and selling in line with the market trend .

If the trend is upward, aim to buy (go long); if the trend is downward, aim to sell (go short)

Unlike counter-trend trading, this strategy is characterized by its ability to capture price movements by riding the larger trend

The advantage of this method is that you can hold a position for a long time and increase your profits as long as the market moves in the direction of your entry .

This approach is very well-suited to swing trading, which aims to capture medium-term trends spanning several days to several weeks

For example, trend following is effective when the market shows a clear direction due to economic indicators or geopolitical risks

Rather than trying to force your way to the top or bottom, you're more likely to succeed by joining the trend midway through

If you want to consistently make money with swing trading, you should first learn the basics of "trend following," or "momentum trading," which involves identifying the trend and following its direction

Configure the indicators you want to use

In swing trading, it's important to use moving averages to simply grasp the direction of the market

First, let's set up two SMAs (Simple Moving Averages): a 20-day line and a 75-day line.

To improve the visibility of the chart, color coding is recommended

• 20SMA (short term) = blue
• 75SMA (medium term/long term) = red
• Auxiliary trend line = orange

First, display the 75-period Simple Moving Average (SMA) (red) on the daily chart and determine the trend based on whether the slope is clearly visible .

In terms of the image, an upward slope indicates an uptrend, while a downward slope indicates a downtrend

Next, apply the same settings (20SMA and 75SMA) to the 1-hour chart

Maintaining a consistent environmental awareness across these two timeframes is crucial for a successful swing strategy

Simply select "SMA (Simple Moving Average)" as the indicator type and set the period to 20 and 75

Finally, add auxiliary trend lines to areas where a rebound is likely to occur to make it visually clearer

Let's hone our decision-making skills with easy-to-read charts, without adding unnecessary indicators

Analyzing trends from multiple timeframes

In swing trading, the basic approach is to determine the trend using two timeframes: the daily chart and the hourly chart

First, let's use the 75-period Simple Moving Average (SMA) (red) that we drew earlier on the daily chart to check the overall trend of the market by looking at the slope of the line .

At this point, by drawing an orange trend line and connecting past lows and highs, you can visually grasp the direction of the price

If both the trend line and the moving average are sloping upwards, it indicates a clear uptrend

analyze the short-term trend using the 75-period Simple Moving Average (SMA) on the 1-hour chart in a similar manner .

If we can confirm an upward trend here as well, it means that the direction of the daily chart and the hourly chart are aligned

Furthermore, be sure to check for any recent economic indicators or event announcements.

If there is major news on the horizon, it is advisable to remain cautious, as this could disrupt the flow of events

The most important point before entering a trade is that the trend aligns across multiple timeframes

Use technical analysis to determine entry timing

In markets where a clear trend is present, entering trades on pullbacks or retracements is an effective strategy.

In particular, use the "golden cross" and "dead cross" of moving averages to determine entry timing

First, let's focus on the SMA20 (blue) and SMA75 (red) displayed on the 1-hour chart.

If the price is in an uptrend, a buy signal is generated immediately after the SMA20 crosses above the SMA75

it is safer to aim for the second pullback after the crossover (i.e. , the point where it bounces back at the 20-period Simple Moving Average) rather than the first rebound after the crossover

The ideal entry point is when the candlestick approaches the 20-period Simple Moving Average (SMA) and a rebound is confirmed

At this point, checking whether the price has bounced off the same 20-period Simple Moving Average (20SMA) several times in the past will increase the reliability of the prediction

Also, rushing into an entry carries the risk of being misled, so make your decision after considering factors such as the angle of the moving average and the momentum of the market.

In situations where fundamentals are a major factor, it's also important to consider refraining from entering a trade

A highly reliable entry point is when all three factors align: "market environment analysis + a rebound from the moving average + candlestick movement."

Set a stop-loss level in advance

In swing trading, it is extremely important to decide on your stop-loss level in advance

If you don't set a stop-loss order, you risk being unable to make a decision while holding unrealized losses, which could lead to further losses

In this method, the basic strategy is to enter a buy position on the second rebound after the 20-period Simple Moving Average (SMA) and 75-period Simple Moving Average (SMA) form a golden cross on the 1-hour chart

In this case, the stop-loss line is set below the second rebound line.

This is because, since the entry is based on the assumption of an uptrend, if the price falls below the most recent support level, it is considered that the assumption has been invalidated

Relying on the expectation that "it might go up eventually" prevents you from making rational judgments

By clearly defining your stop-loss line, you can trade without being swayed by emotions

Set a profit target

In swing trading, clearly defining profit-taking rules allows for calm decision-making that is not influenced by emotions

For this trade, taking into account the strong momentum of the trend, I adopted the rule of "take profits when the body of the candlestick falls below the 75-period Simple Moving Average (SMA)"

This is a clear signal indicating the end of an uptrend, and it is also easy to recognize visually

Another profit-taking target is to take profits when there are signs of a rebound at the recent .

High prices tend to attract the attention of many traders and often become points where reversals occur

Thus, while having a main profit-taking rule, it's important to be able to respond flexibly by observing price movements and market momentum

Setting a simple, visually clear target for taking profits allows for more decisive trading

The order will be an OCO order

Once you've decided on your stop-loss and take-profit points, you should generally use OCO orders

OCO orders are a convenient order type that allows you to set both profit targets and stop-loss orders at the same time

If you set it up in advance, payment will be automatically processed when either price is reached

This is an effective way to limit risk, especially for those who cannot monitor charts during the day

However, if you've defined profit-taking as "when the candlestick body breaks below the 75-period Simple Moving Average (75SMA)," as in this case, an OCO order alone won't suffice.

In such cases, it is recommended to utilize the alert function of your charting tool.

Platforms like MT4 and TradingView allow you to set up alarm notifications when the price crosses an SMA or reaches a certain price level

By setting up an alert to sound when the candlestick falls below the 75-period Simple Moving Average (SMA), you can ensure you don't miss the opportunity to take profits

Even if it's difficult to decide when to take profits, it's essential to always set a stop-loss order.

To prevent losses from escalating, be sure to implement at least basic risk management measures

The Ultimate Swing Trading Method for Overseas Forex (Part 2) | Ichimoku Cloud

Next, Ichimoku Kinko Hyo is listed as an optimal method for swing trading

The Ichimoku Kinko Hyo is a technical indicator originating in Japan, devised by Japanese market researcher Goichi Hosoda (pen name: Ichimoku Sanjin)

The name Ichimoku Sanjin reflects the desire to be a person like a hermit who can see the whole picture at a glance

He spent many years analyzing market trends as a newspaper reporter in the early Showa era, and it was during this time that he developed this indicator

The Ichimoku Cloud is characterized by its ability to visually determine the strength of a trend and turning points by combining five lines with candlestick charts .

Especially in swing trading, using strong signals such as the "three positive signals" and "three negative signals" makes it easier to ride the bigger trend

This chapter will provide a clear explanation of the Ichimoku Kinko Hyo indicator, from its basics to its practical applications

Basic signals to be aware of in Ichimoku Kinko Hyo

The Ichimoku Cloud is an excellent technical indicator that allows you to visually grasp market trends and turning points

In particular, in swing trading, it is useful for developing medium- to long-term position strategies while reading the overall trend

Among them, the following three basic signals are particularly important

Signal content	meaning
Crossing of the conversion line and the base line	A golden cross is a buy signal, and a dead cross is a sell signal
Lagging span and candlestick crossover	Buy when the lagging span crosses above the candlestick, sell when it crosses below
The relationship between candlestick charts and the cloud's position	Above the cloud, the market is rising; below, it's falling; and within the cloud, the market is unstable

These basic signals are useful individually, but their reliability increases when multiple signals occur simultaneously .

For example, if you can make a decision based on "the crossover of the conversion line and the base line" + "the crossover of the lagging span" + "the position where the price breaks through the Ichimoku Cloud," your trading strategy will be much more robust

Let's start by correctly understanding these basic signs

You can utilize even more powerful signals in the next steps: "Three-Role Improvement" and "Three-Role Reversal."

Enter the market based on the strong upward signal, "Three Positive Reversals"

The strongest buy signal in the Ichimoku Cloud is the "Three Positive Reversals" pattern

This is a state where all three elements are showing an upward trend, making it a highly reliable signal indicating a trend reversal or the start of a full-fledged bull market

The three conditions for a positive turn in the rankings are as follows:

1. The conversion line crosses above the base line (golden cross)
2. The lagging span has crossed above the candlestick
3. The candlestick has broken above the cloud and is trading above it

If all three of these occur simultaneously or in quick succession, the likelihood of an upward trend increases

In particular, if the lagging span clearly crosses above the candlestick, followed by a golden cross between the conversion line and the base line, and finally the candlestick breaks above the cloud, this is considered the complete form of a three-line positive reversal, providing strong grounds for a buy entry

Its key features are its visual clarity and ease of understanding, even for beginners

The ideal entry point is immediately after all three conditions are met, or when there is a pullback after the price breaks above the cloud

In swing trading, riding these strong medium-term signals leads to improved win rates and profit margins

Enter the market based on the strong downward signal, "Three-Line Reversal."

The "Three-Line Reversal" is one of the strongest sell signals in the Ichimoku Cloud

When the conditions for a "three-line positive reversal" during an uptrend are met, the opposite conditions are present, suggesting the start of a full-fledged downtrend

The following three conditions must be met for a Sanyaku Gyakusen to occur

1. The conversion line has crossed below the base line (death cross)
2. The lagging span has crossed below the candlestick
3. The candlestick has broken below the cloud and is trading below it

If these three conditions appear simultaneously or in quick succession, it can be concluded that the market has entered a clear downward trend

In particular, a "three-line reversal" is completed when the lagging span clearly breaks below the candlestick, the conversion line makes a death cross with the base line, and finally the candlestick breaks below the cloud

Since there may be a pullback immediately after breaking out of the cloud, entering the market during a subsequent decline after the rebound is one possible strategy

In swing trading, by noticing these clear downward signals and taking advantage of them, it's possible to aim for profits even in a declining market

Enhance timing by using it in conjunction with MACD

The "three positive lines" and "three negative lines" in the Ichimoku Cloud are highly reliable signals indicating a strong trend

However, since it takes time for the signal to be completed, there is a disadvantage in that the entry timing is slightly delayed

Therefore, to help detect earlier signs, it is recommended to use MACD (Moving Average Convergence Divergence) in conjunction with it

MACD makes it easy to visually grasp market momentum and reacts to even small signs of trend reversals

For example, if the lagging span crosses above the candlestick, or if the MACD makes a golden cross before the conversion line and base line cross, these are very effective signals to prepare for an entry.

And entering a buy position when all three positive indicators have been completed is also a solid option .

By being aware of this process, you can reduce the risk of making hasty decisions and make calmer judgments

Furthermore, MACD is also effective in determining the right time to take profits while a trend is continuing

For example, if a "divergence" occurs where the price is rising but the MACD is falling, it suggests the end of the trend, and it's a sign that you should consider taking profits early

MACD is a powerful indicator for swing trading, serving both as a way to "detect market trends" and "assist in taking profits."

Profit-taking targets are determined based on the Ichimoku Cloud

In swing trading, deciding where to take profits is a crucial decision

While the MACD-based profit-taking strategy mentioned earlier is also effective, in an entry strategy based on the Ichimoku Cloud's three-line bullish signal, as in this case, effective to set "the moment the candlestick enters the cloud" as one of the profit-taking targets .

Clouds act like walls in the market, serving as support and resistance levels

Therefore, when a candlestick touches or enters the Ichimoku Cloud, it can be interpreted as a sign that the trend that had been continuing up to that point is beginning to weaken

Especially when entering a trade based on a three-line positive reversal, the upward momentum tends to slow down as the price approaches the Ichimoku Cloud, making it a very clear point to visually identify as a profit-taking target

Furthermore, paying attention to the thickness and angle of the clouds will further improve the accuracy of your judgment

While thin clouds may allow the price to break through, thick clouds tend to cause a rebound, often making it an ideal time to take profits

Having clear, visual profit-taking rules is crucial for consistently maintaining a stable swing trading strategy, as it helps avoid being swayed by emotions

5 tips to increase your winning rate in overseas forex swing trading

Swing trading is a trading style that aims to capture trend waves over a period of several days to several weeks

While this tends to result in larger profit margins in a single trade, it also makes it difficult to identify trends and manage risk, requiring a certain level of skill and ingenuity to consistently win

Here are five practical tips to improve your success rate in swing trading

All of these things can be easily incorporated into your daily trading, so let's make this extra step a habit

5 tips	Content	Explanation
① Choose a major currency pair	USD/JPY and EUR/USD, etc	With many participants, the chart tends to be more stable
② Check the fundamentals	Check interest rates, employment statistics, etc	This makes it easier to predict long-term market trends
③ Adjust position size and hold	Use split entries and profit-taking	It's easier to increase profits while keeping risks low
④ Maintain a margin maintenance ratio of 250% or higher	Maintain a moderate position	This makes it easier to withstand sudden price fluctuations
⑤ Analyze the background of the trend	Identify the factors through news reports, etc	It also becomes easier to predict the end of a trend

1. Choose mainly major currency pairs

To achieve consistent results with swing trading, the basic principle is to choose "major currency pairs" as your trading targets

Major currency pairs refer to currency pairs with high global trading volume, such as USD/JPY, EUR/USD, and GBP/USD

The reason these are suitable is that they have high liquidity and their prices tend to fluctuate in a consistent rhythm

Technical analysis becomes more effective when many traders use the same charts and technical indicators as a reference for their buying and selling decisions

For example , the USD/JPY pair is the most familiar to Japanese traders, and there is a wealth of information available about it.

With the second-largest trading volume in the world after the Euro/US Dollar, and with its relatively easy-to-read technical patterns and news-related influences, this currency pair is recommended for beginners in swing trading

Conversely, emerging market currencies such as the Turkish lira and South African rand tend to have low liquidity and unstable prices, making them difficult to analyze and less profitable to trade

Recommended Currency Pairs for Overseas Forex Trading | Explanation of Easy-to-Win Currency Pairs and Their Characteristics

2. Check the fundamentals beforehand

The second tip is that, in addition to charts, "fundamental analysis" is also an essential element

Fundamentals refer to all economic and political factors that influence exchange rates, including economic indicators, policy interest rates, statements from key figures, and geopolitical risks

While these factors have a limited impact on short-term trading, they significantly influence charts in swing trading, which involves holding positions for several days to several weeks

For example, if the United States decides to raise interest rates, the dollar tends to be bought, and the dollar-yen exchange rate tends to rise

Furthermore, since trends may reverse or strengthen around the time economic indicators such as employment statistics, GDP, and inflation rates are released , it is important to check the release dates of key indicators in advance on the economic calendar.

Even if you enter a trade based solely on technical analysis, you may incur unexpected losses if you are going against the major fundamental trends

Having both perspectives allows for more accurate decision-making

Make it a point to stay informed about economic news and global affairs on a regular basis

3. Hold the position while adjusting the position size

In swing trading, instead of entering and closing all trades at once, you can reduce risk and increase profits by dividing your trades into smaller segments

Specifically, effective strategies include starting with a small lot size and gradually increasing your position once the trend is confirmed, or conversely, partially taking profits and letting the rest run

For example, if you enter a trade of 20,000 units during an uptrend, you might take profits on 10,000 units once the price has risen to a certain point, and keep the remaining 10,000 units

Furthermore, if the trend continues, you can flexibly manage your positions by adding more entries

This way, you can maximize profits if the trend continues as expected, and minimize losses if it moves against you

Controlling position size is an important technique for increasing the stability of swing trading

4. Maintain a margin maintenance ratio of at least 250%

Swing trading involves a longer period from entry to exit, which often leads to temporary unrealized losses

To avoid forced liquidation in such situations, maintaining a margin maintenance ratio of 250% or higher is the minimum standard that should be adhered to.

The margin maintenance ratio indicates the percentage of unrealized losses relative to the account balance. If the maintenance ratio falls too low, the account will be subject to a stop-loss order

For example, if you trade with a margin of 50,000 yen, your margin maintenance ratio will be just barely sufficient with 10,000 units of currency, but with 5,000 units of currency, you can maintain a margin maintenance ratio of 250% or more

The higher the maintenance margin, the more resilience you have to withstand market fluctuations, which will reduce unnecessary anxiety and stress

Furthermore, maintaining mental composure is crucial when pursuing long-term trends. Creating a stable trading environment with a safe margin ratio will lead to consistent profits

5. Analyze the background behind the emergence of trends

The final and most important tip to understand the background behind why a trend is occurring .

Simply buying because the chart is rising isn't enough; exploring the reasons and factors behind that movement makes it easier to determine the strength and duration of the trend.

For example, let's say that the underlying reason for the ongoing trend of a weaker US dollar is "expectations of interest rate cuts due to an economic slowdown in the United States."

In this case, the same trend is expected to continue until a policy change is made at the next FOMC (Federal Open Market Committee) meeting

Thus , it is important to look not only at the results of news and economic indicators, but also at how the market reacts to them and how it incorporates them into its calculations.

You will gradually develop the ability to read the market sentiment, which is not reflected in charts

If you can deeply understand the underlying context, you can achieve not just one-off trades, but also trades that consistently ride the wave

As a result, this leads to a more stable win rate

Reasons why you might not be profitable in overseas forex swing trading and how to fix them

Swing trading is a trading strategy that involves holding positions for several days to several weeks while anticipating the trends in the foreign exchange market

While both technical and fundamental analysis are required, many people say they "can't win as much as they'd like" or "find it difficult."

This section explains the main reasons why people feel they can't win at swing trading and provides specific solutions to address them

Let's identify areas for improvement by comparing them to your own trading style

• Are we following the wrong trend?
• Are the stop-loss levels and timing appropriate?
• Are you making full use of technical analysis?

Are we following the wrong trend?

The most important thing in swing trading is "riding the trend."

Nevertheless, there are still countless cases of people taking short positions during an uptrend or long positions during a downtrend

The foreign exchange market has both "trend markets" and "range markets," but the basic principle of swing trading is to target trend markets .

In particular, being able to capture the early stages of a trend reversal significantly increases the likelihood of making substantial profits

Conversely, swing trading is unsuitable in range-bound markets because the trend is not clearly defined

To determine the direction of a trend, make it a habit to use technical indicators such as moving averages Ichimoku Kinko Hyo

Are the stop-loss levels and timing appropriate?

To minimize losses in swing trading, it is essential to clearly define your "stop-loss line"

However, many people make the mistake of letting their emotions get the better of them when it comes to cutting their losses, or they continue trading without setting any stop-loss orders at all, resulting in significant losses.

Set your stop-loss level based on market volatility and chart patterns, and within a realistic price range (2-3% of your margin)

Stop-loss orders that are too short are easily shaken out by noise, while those that are too long reduce capital efficiency

Furthermore, by utilizing "stop-loss orders" that automatically cut losses, you can manage losses systematically without being swayed by emotions

Furthermore, "OCO orders," which allow you to set profit targets and stop-loss orders simultaneously , you can achieve more balanced risk management.

Are you making full use of technical analysis?

In swing trading, identifying entry points through technical analysis is extremely important.

However, you're just "entering based on a vague feeling" or "simply referring to what influencers are saying ," your chances of winning won't increase.

First, narrow down the technical indicators you use to just one or two, and make sure you can use them thoroughly

Typical analytical tools include the moving average , Ichimoku Kinko Hyo , and MACD, which were introduced in the previous section, as well as RSI and Bollinger Bands.

it is important to conduct transactions "plan → analyze → execute → review."

By reviewing and correcting discrepancies between your analysis and the results, you can achieve continuous growth and stable profits

Q&A about Swing Trading

Many people are interested in swing trading, but have questions such as, "What timeframe should I look at?", "Can I really make money?", and "Can beginners do it?"

Here, we will explain the basic points of swing trading in an easy-to-understand way by answering frequently asked questions

Let's start by reviewing each point one by one to deepen our understanding

What timeframe should I use for swing trading?

This article explains how to identify trends using the daily chart and enter trades using the 1-hour chart

This combination of timeframes is easy for even beginners in swing trading to implement and is used by many traders

A key feature of this method is that you can easily improve your entry accuracy by checking the overall trend and direction on the daily chart and identifying opportunities for buying on dips or selling on rallies on the hourly chart

While the combination of daily and 4-hour charts is generally considered the standard, using a 1-hour chart allows for easier response to finer changes and is a popular combination among domestic traders .

To find the timeframe that suits you best, it's important to actually use it and test it out

How should I determine the right time to close a swing trade?

In swing trading, where you take profits and cut losses significantly impacts your results

The basic principle is to first decide on your profit target and stop-loss line before entering a trade .

This article also introduces a trading method using the Ichimoku Cloud and moving averages

it's important to have clear decision-making criteria using technical indicators , such as "take profits when the candlestick enters the Ichimoku Cloud" or "cut losses when the candlestick clearly breaks below the moving average. "

Even when entering a trade on the 1-hour chart, important signals for closing a position include when the price breaks below the baseline on the daily chart or when the lagging span becomes intertwined with the candlestick, indicating a breakdown in the trend

The key to achieving consistent results in swing trading is to follow predetermined exit rules rather than making decisions based on emotions

Are there any currency pairs you would recommend for swing trading?

In swing trading, the key is to choose currency pairs with straightforward price movements and high liquidity

This article focuses primarily on the USD/JPY, EUR/USD, and GBP/USD pairs

These stocks have high trading volume and are well-suited for swing trading because technical analysis is effective

, is a representative currency pair that is easy for Japanese traders to handle, as there is plenty of information available about it, its price movements are relatively stable, and it is easy

Conversely, emerging market currencies such as the Turkish lira and South African rand have wide spreads and are prone to wild fluctuations due to sudden news, making them less suitable for swing trading

It's important to understand the characteristics of each currency pair and choose one that suits your analysis style .

Recommended Currency Pairs for Overseas Forex Trading | Explanation of Easy-to-Win Currency Pairs and Their Characteristics

Can beginners do swing trading?

Swing trading is a method that even beginners can try .

However, it's essential to first grasp the fundamentals and not try to aim for huge profits right away

Unlike day trading, you don't need to constantly monitor charts all day, making it ideal for people who are busy with work or school.

This allows you to take some time to consider entry and exit decisions, reducing the psychological burden

However, since you will have to endure unrealized losses for a longer period, important to thoroughly manage your funds and have stop-loss rules in place .

Be careful, as delaying cutting your losses carries the risk of a sudden and significant decrease in your capital

As introduced in this article, techniques that utilize daily and hourly charts , you can start swing trading more safely.

Which is more profitable, swing trading or day trading?

Which method is more profitable largely depends on the trader's personality and lifestyle

Swing trading is characterized by its large profit margin per trade, allowing traders to aim for significant profits with a small number of trades

This is suitable for busy people or those who cannot constantly monitor the market, and it also reduces the mental burden relatively

On the other hand, day trading involves buying and selling many times in a short period of time, so quick judgment and experience are necessary

The appeal lies in being able to accumulate profits in a single day while constantly monitoring charts, but this also comes with significant stress and effort

n't about which is better, but rather that choosing the style that suits you best will lead to long-term success .

If you're unsure, it's a good idea to start with swing trading, and once you're comfortable, try day trading.

Summary | Is Swing Trading in Overseas Forex the Best Method? A Complete Explanation of How to Do It and All the Tips

Swing trading in overseas forex an efficient trading method that allows even those with limited time to aim for profits .

Since it doesn't require constantly monitoring the market, it's also suitable for those who want to balance it with their work

This article provides a thorough explanation of everything from the basics of swing trading to tips for increasing your win rate and specific trading methods

In particular, technical analysis methods such as "trend following" and "Ichimoku Kinko Hyo" are easy for beginners to replicate and offer the potential for long-term profits

Another appealing aspect of swing trading is that it can be continued with mental stability .

To deal with unrealized losses and indecision about entry points, be sure to manage your margin maintenance ratio and stop-loss settings

If you're tired of short-term trading or can't check charts every day, please use the information in this article as a reference and try swing trading

Consistency and strict adherence to rules are the shortest path to stable profits

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