Best Swing Trading Indicators

When it comes to the world of trading, whether you are trading forex crypto, currency, stock market or anything in between, one of the most important things that you need to know all about our indicators without the right types of indicators, you simply aren’t going to be profitable, especially when it comes to swing trading indicators.

Now we know that there are a lot of day traders out there, but this is not what we are here to talk about. Today, day trading involves trades that only last for a single day and is there or also known as intraday trading. Today we are here to talk about swing trading and specifically what the best swing trading indicators are.

Now, if you have no idea what indicators are or what swing trading is no worries because we will explain both of these concepts in fairly great detail below. You do need to know what indicators are, and it’s definitely a good thing if you are familiar with swing trading. If you want to make real money in the world of trading that you need to know what the best swing trading indicators are, and this is exactly what we are here to explain today.

What is Swing Trading?

Seeing as we are talking about swing trading, we probably should provide you with a basic definition of what exactly this is now. A lot of people are probably familiar with day trading, which is also known as intraday trading, and the defining feature here is that trades are only open for a single day.

However, swing trading is a lot different because it’s a much longer type of trading, or in other words, trades are open for a very long period of time in swing trading, trades can be open anywhere from a couple of days to a few months. The main goal of swing trading is to buy any kind of currency, security or asset as low as possible and to sell it as high as possible.

The buy low sell high philosophy is the leading characteristic of this type of trading. Sure, swing trading does leave you vulnerable to some weekend and overnight risk, but if done properly you can definitely make a lot of money with it. Of course, having the best indicators in your arsenal is going to make a huge difference.

What’s an Indicator?

OK, so before we can start talking about what the best indicators for swing trading are, it’s a good idea for us to provide you with a basic definition of what indicators in themselves are. So technically speaking, indicators are seen as statistics that are used to measure the current market conditions as well as to predict or forecast future financial conditions and economic conditions.

In terms of trading and investing, indicators are usually always about specific sharp patterns that are derived from the volume, price or open interest of a given security. What you also need to know is that there are four main types of indicators out there, all of which provide you with different types of information.

The four indicator types that you need to know, our volume, momentum, volatility and trend indicators. These are all various pieces of information that will help you place trades with confidence and ease. Now what we are here to do today is to provide you with a list of the best trading indicators for swing trading. Let’s get to it.

Criteria for the Best Swing Trading Indicators

Before we start talking about the best swing trading indicators out there, there are some specific criteria that you need to be aware of or in other words, criteria that indicators need to meet in order to be useful for your purposes.

1. First and foremost, you do need to have an indicator that is easy to understand. Of course, some indicators are much simpler than others. The point here is that these are tools that you need in order to place profitable trades, so you better be able to understand what is going on. The simple the indicator the better.
2. You do also want to look for trading indicators that are free to use because paying for indicators is simply senseless. There are plenty of resources out there.
3. Perhaps the most important thing that you need to lookout for when choosing swing trading indicators is that you want indicators that perform more than one function at the same time. The more types of information and indicator can provide you with, the better the point here is that you don’t want to have dozens of indicators open at once. So if you have one, two, or maybe three that can provide you with all the information you need, then you will be set. The bottom line here is that you want indicators that can determine your entries. How you will take profits and determine your stop loss all at the same time.

The Best Swing Trading Indicators

OK, so now that we have covered all of the basics, what we want to do is to take a look at the top three best swing trading indicators that you could possibly use.

Donchian Channel

This is one of the best swing trading indicators that you can use because it helps you visualize both the highs and the lows on your chart. This indicator is all about being able to determine the lowest lows and the highest highs over a certain amount of time. It’s a great indicator because they provide you with information about potential buy and sell trades. The way it looks, it works almost like support and resistance and this doesn’t make it quite easy to use. With that being said, you should use this indicator in conjunction with a trend indicator.

Zig Zag

Another good indicator to use is the zigzag indicator and this works by plotting a variety of points on a chart whenever the price reverses by a percentage greater than the pre-chosen variable. If you want to identify price trends and eliminate random place fluctuation. And this is a great indicator to use. However, you do want to use this indicator in conjunction with a price action indicator.

OHLC

OHLC stands for open high, low close and this is a great indicator to use because it helps to visualize both the highs and lows on a daily candle no matter what the time frame you are using. If you see a price forming a bearish candle from the previous day’s highs, then you can go short and vice versa. It’s a great indicator to use because it provides you with tons of info about trend reversals from daily lows and highs.

Best Indicators for Swing Trading – The Bottom Line

Although there is of course a lot more ground to cover when it comes to the best indicators for swing trading, we have done our best to provide you with a basic foundation of knowledge that you can now build upon.

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