Swing Trading: The Definitive 2023 Guide

by Justin Bennett  · 

June 1, 2023

by Justin Bennett  · 

June 1, 2023

by Justin Bennett  · 

June 1, 2023


Today I’m going to show you step-by-step how to profit from swing trading.

It’s a simple strategy I’ve used for years and works in various markets, including forex and crypto.

So if you’re ready to level up your trading game this year, stick around to the end.

Let’s begin!

BONUS: Download a free PDF cheat sheet that shows you step-by-step how to swing trade, including setting entry points, targets, and stop losses. Plus, get my daily newsletter with exclusive Forex trade setups and strategies.

Trading Styles vs. Strategies

Before we move on, it’s important to know the difference between styles and strategies.

As I mentioned above, there are far fewer trading styles than there are strategies.

Here are a few of the most popular styles:

  • Swing trading
  • Day trading
  • Scalping (often a subset of day trading)
  • Position trading
  • High-frequency trading

Within each of these, there are hundreds if not thousands of strategies.

In other words, there are many different ways to day trade just as there are many ways to swing trade.

It’s up to each trader to make the style his or her own.

For instance, one day trader may use the 3 and 8 exponential moving averages combined with slow stochastics.

Another trader of the same style may use a 5 and 10 simple moving average with a relative strength index.

Both are considered day traders, but their strategies are different.

The same goes for swing trading.

The endless number of indicators and methods means that no two traders are exactly alike.

That’s especially true once you add human psychology as a variable.

In summary, trading styles define broad groups of market participants, while strategies are specific to each trader.

What is Swing Trading?

Here’s a quick video example to kick things off.

As the name implies, swing trading is an attempt to profit from the swings in the market.

These swings are made up of two parts—the body and the swing point.

GBPUSD daily chart with swing points and swing bodies

As traders, it’s our job to time our entries in a way that catches the majority of each swing body.

While catching a swing point can be incredibly lucrative, it isn’t absolutely necessary.

In fact, attempting to catch the extreme tops and bottoms of swings can lead to an increase in losses.

The best way to approach these trades is to stay patient and wait for a price action buy or sell signal.

I’ll get into those various strategies shortly.

For now, just know that the swing body is the most lucrative part of any market move.

Later in this lesson, I will also show you a way to use those swing points to evaluate momentum.

The Best Strategy for Swing Trading

Step 1: Use the Daily Time Frame

I spend most of my time on the daily charts.

They offer a bigger picture of what’s happening with the price action and provide more reliable signals.

However, not all daily time frames are created equal.

I use a specific type of chart that uses a New York close.

Each 24-hour session closes at 5 pm EST, which is considered the Forex market’s unofficial closing time.

It is possible to use the 4-hour charts for swing trading, but I’ve found that the daily works best.

My suggestion is to start with the daily time frame.

Once you become profitable using the daily chart, feel free to move to the 4-hour time frame.

As a general rule, price action signals become more reliable as you move from the lower time frames to higher ones.

Step 2: Draw Key Support and Resistance Levels

Apart from Step 1, this is the most important piece of the entire process.

Think of drawing key support and resistance levels as building the foundation for your house.

It’s impossible to identify favorable swing trades without them.

Before I show you some examples using swing trades, let’s define the two types of levels.

Horizontal support and resistance

These are the most basic levels you want on your charts.

They provide a great foundation for trading swings in the market and offer some of the best target areas.

If you want to know how to draw support and resistance levels, see this post.

Trend lines

Not all technical traders use trend lines.

If I’m being honest, I have no idea why someone would ignore them, especially a swing trader.

They not only offer you a way to identify entries with the trend, but they can also be used to spot reversals before they happen.

Be sure to review the lesson I wrote on trend strength (see link above).

It will explain everything you need to know to use trend lines in this manner.

Step 3: Evaluate Momentum

At this point, you should be on the daily time frame and have all relevant support and resistance areas marked.

Remember how I mentioned using swing points to evaluate momentum earlier in the post?

Well, this is where those swing highs and lows come in handy.

There are three types of market momentum or lack thereof.

  1. Uptrend: Higher highs and higher lows
  2. Downtrend: Lower highs and lower lows
  3. Range: Sideways movement

A market that’s in an uptrend is carving higher highs and higher lows.

EURUSD higher highs and higher lows

Notice how each swing point is higher than the last.

You want to be a buyer during bullish momentum such as this.

On the opposite end of the spectrum we have a downtrend.

In this case, the market is carving lower highs and lower lows.

AUDUSD lower highs and lower lows

You want to be a seller here.

The “swing” above is the heart of the swing trading strategy discussed here.

We’ll get into the various price action signals in the next step.

Last but not least is a ranging market.

As the name implies, this occurs when a market moves sideways within a range.

AUDUSD ranging market on daily time frame

Although the chart above has no bullish or bearish momentum, it can still generate lucrative swing trades.

In fact, ranges such as the one above can often produce some of the best trades.

This is mostly due to the way that support and resistance levels stand out from the surrounding price action.

Just look at the two pin bars in the chart below.

Bullish and bearish pin bars

Step 4: Watch for Price Action Signals

Let’s review where you should be at this point in your swing trading journey.

Steps 1 and 2 showed you how to identify key support and resistance levels using the daily time frame.

Then in Step 3, you learned to evaluate the market’s momentum.

This tells you whether the market is in an uptrend, a downtrend or range-bound.

If the market is in an uptrend, you want to begin watching for buy signals from key support.

My two favorite candlestick patterns are the pin bar and engulfing bar.

You can learn more about both of these signals in this post.

Here is a great example of a bullish pin bar that occurred at key support during an uptrend.

GBPUSD bullish pin bar at key support level

The goal is to use this pin bar signal to buy the market.

By doing this, we can profit as the market swings upward and continues the current rally.

On the flip side, if the market is in a downtrend, you want to watch for sell signals from resistance.

AUDNZD bearish pin bar at key resistance level

Again, we use a signal like the pin bar to identify the swing high, also called the swing point.

You might not catch the entire swing, and that’s okay.

The idea is to catch as much of it as possible, but waiting for confirming price action is crucial.

When looking for setups, be sure to scan your charts.

Don’t make the mistake of searching for setups.

Those two actions may sound similar but they are far from it.

Scanning for setups is more of a qualitative process.

In other words, you’re scanning for the very best setups and if you don’t find anything, that’s okay.

Most traders feel like they need to find a setup each time they sit down in front of their computer.

This is called searching for setups.

So remember to scan for swing trade opportunities; never go searching for them.

Step 5: Identify Profit Targets and Stop Loss Levels

There are two rules when it comes to identifying exit points.

The first rule is to define a profit target and a stop loss level.

Many traders make the mistake of only identifying a target and forget about their stop loss.

Don’t make that mistake.

In order to calculate your risk as explained in the next step, you must have a stop loss level defined.

The second rule is to identify both of these levels before risking capital.

This is the only time you have a completely neutral bias.

As soon as you have money at risk, that neutral stance goes out the window.

It then becomes far too easy to place your exit points at levels that benefit your trade, rather than basing them on what the market is telling you.

So what’s the best way to identify your exit points?


Just use the support and resistance levels you identified in Step 2.

Remember that bullish pin bar on the GBPUSD? (See Step 4 if you need a refresher.)

Here is a simple way to determine a profit target.

Daily bullish pin bar at key support

In this case, the GBPUSD rallied past our target, and that’s okay.

Remember that the goal is to catch the majority of the swing.

We don’t need to catch the entire move to make a profit.

We can do the same thing with the AUDNZD bearish pin bar from Step 4.

Sell setup on daily chart with profit target

Remember, those horizontal areas and trend lines are your foundation.

Once they are on your chart, use them to your advantage.

That involves watching for entries as well as determining exit points.

See this lesson to find out how I set and manage stop loss orders.

Step 6: Calculate and Manage Risk

Once you have identified your exit points for the trade, it’s time for some risk management.

Before I discuss how to identify stop loss levels and profit targets, I want to share two important concepts.

The first is R-multiples.

This is a way to calculate your risk using a single number.

For instance, a setup with a 100 pip stop loss and a 300 pip target is 3R.

Similarly, if your risk is $100 and you stand to make $500, the risk to reward ratio is 5R.

The second concept I want to discuss is asymmetry.

A favorable risk to reward ratio is one where the payoff is at least twice the potential loss.

Written as an R-multiple, that would be 2R or greater.

You can learn about both of these concepts in greater detail in this post.

When calculating the risk of any trade, the first thing you want to do is determine where you should place the stop loss.

For a pin bar, the best location is above or below the tail.

The same goes for a bullish or bearish engulfing pattern.

A stop loss that’s approximately 10 to 20 pips above or below the candlestick being traded is a good place to start.

Now that you have the stop loss placement identified, it’s time to determine the profit target.

This is where those key levels come into play once more.

Remember that when swing trading the goal is to catch the swings that occur between support and resistance levels.

So if the market is trending higher and a bullish pin bar forms at support, ask yourself the following question.

Where is the next key resistance level?

The answer will not only tell you where to place your target, but will also determine whether a favorable risk to reward ratio is possible.

If it is, then you may have a valid buying opportunity in front of you.

If not, you may want to stay on the sideline.

Day Trading vs. Swing Trading

On the opposite end of the spectrum from swing trading we have day trading.

These two couldn’t be further apart.

As you now know, the goal with swing trading is to catch the larger swings in the market.

Naturally, this requires a holding period that spans a few days to a few weeks.

Day trading, on the other hand, uses very short holding periods; sometimes just a few seconds.

There are other styles of trading, but these are two of the most popular.

I’ll get into some of the pros and cons of both, but first let’s take a look a simple 6-step process for swing trading.

Is Swing Trading Right for You?

There is no right or wrong answer here.

After more than a decade of trading, I found swing trades to be the most profitable.

Keep in mind that I’ve tried just about every trading style and strategy under the sun.

Before 2010 I experimented with everything from one-minute scalping strategies to trading Monday gaps.

However, just because swing trading Forex has worked for me doesn’t mean it won’t work for you.

Finding a profitable style has more to do with your personality and preferences than you may know.

In fact, if your chosen style doesn’t fit your personality, you are bound to struggle.

The key points below will help you decide if swing trading is right for you.

You might want to be a Forex swing trader if:

– You don’t mind holding trades for several days

Most Forex swing trades last anywhere from a few days to a few weeks.

This means holding positions overnight and sometimes over the weekend.

There are, of course, a few ways to manage the risks that accompany a longer holding period.

One way is to simply close your position before the weekend if you know there is a chance for volatility such as a government election.

– You want more freedom with your time

Swing trading is what allowed me to start Daily Price Action in 2014.

Without using this style of trading, there is no way I’d have the time to maintain this website.

On average, I spend no more than 30 or 40 minutes reviewing my charts each day.

Spending more time than this is unnecessary and would expose me to the risk of over-trading.

– You don’t mind taking fewer trades but making more on each one

Because swing trading works best on the higher time frames, opportunities are limited.

You may only get five to ten setups each month.

However, the return from each one can be much greater than those who day trade.

For instance, my minimum risk to reward ratio is 3R.

That means for every 1% of my account balance at risk, I stand to make a 3% profit.

– You’re looking for a slower paced style of trading

When it comes to trading Forex, slow isn’t a bad thing.

In fact, a slower paced style like swing trading gives you more time to make decisions which leads to less stress and anxiety.

So, if you’re looking for a more relaxed way to trade the market, this trading style might be the answer.

– You have a full-time job or school

I wasn’t always a stay at home trader.

Having the ability to trade Forex around my work schedule was a huge advantage.

Had I needed to sit in front of my charts all day to watch every tick, it wouldn’t have been possible.

This is the kind of freedom swing trading can offer.

You might NOT want to be a Forex swing trader if:

– You’re looking for an action-packed style of trading

There is nothing fast or action-packed about swing trading.

It’s a style where the slower-paced, more disciplined traders win.

I will go as far as to say that if your holding period is more than a few days and your trading isn’t boring, you’re doing something wrong.

– You don’t mind making a small amount on each position

As a swing trader, your average profit for a successful trade might be 2% or greater.

Most day traders, on the other hand, make a much smaller amount per profitable trade.

They make up for it in volume, but the return per execution is relatively small.

– You can’t stand the idea of holding positions overnight

Most swings last anywhere from a few days to a few weeks.

As such, swing traders will find that holding positions overnight is a common occurrence.

If you can’t sleep knowing you have capital at risk or unrealized profit at stake, then swing trading might not be for you.

– You need to know if you’re right or wrong immediately

I have held several positions for over a month.

Some have even lasted for two or three months, particularly when I’ve traded a reversal on the weekly time frame.

Longer-term trades such as this require patience.

It may take several days, weeks, and sometimes months before you know if your analysis was correct.

That said, trailing your stop loss to lock in some profit along the way does help to relieve most of that pressure.

– You get anxious when trades go against you

In most cases, the market won’t take off in your intended direction right away.

Drawdown is something all traders have to deal with regardless of how they approach the markets.

However, drawdown can last longer for a swing trader.

It doesn’t mean you stand to lose more money, but positions can remain negative much longer than if you were day trading.

Final Words

Forex swing trading is one of the most popular trading styles around, and for good reason.

It allows for a less stressful trading environment while still producing incredible returns.

It’s also great if you have a day job or school to attend.

Having accurate levels is perhaps the most important factor.

If you can’t rely on the support and resistance levels on your chart, you won’t be able to trade with confidence.

In my experience, the daily time frame provides the best signals.

Just make sure you use New York close charts where each session ends at 5 pm EST. Check with your broker to be sure.

The best way to remove emotions from trading and ensure a rational approach to the markets is to identify exit points in advance.

If you wait until you have an open position, it’s too late.

Above all, stay patient. Remember that it only takes one good swing trade each month to make considerable returns.

What is swing trading?

Swing trading is a style of trading whereby the trader attempts to profit from the price swings in a market. These positions usually remain open for a few days to a few weeks.

Is swing trading still profitable?

Absolutely! If you stick to the steps discussed in this post, you can profit from swings in the market, whether it be forex, crypto or another market.

What is the difference between day trading and swing trading?

Day trading is a style of trading where positions are opened and closed within the same session. Swing trading, on the other hand, uses positions that can remain open for a few days or even weeks.

What time frame is best for swing trading?

Most swing traders prefer the daily time frame for its significant price fluctuations and broader swings. However, the weekly and even 4-hour time frames can be used to complement the daily time frame.

Before You Go…

I created a free swing trading PDF cheat sheet that you can use to quickly learn how to swing trade, including where to enter and exit the market for the most profitable trades.

The cheat sheet contains detailed steps on how to swing trade with examples.

Click below to download the free cheat sheet:

Continue Learning


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      1. Please Mr. Justin help me with this Forex trade. I’m a poor guy that just read about Forex trade and I wish to put my little money there maybe can let me make in life too. Kindly help the poor guy for God shake.

        I seek your help, be mentor to make it in life. I need money to survive. May God help you too.

        Alli Adetayo from Nigeria

  1. Good way of teaching. I would like to make an investment with you if you would like to do it for both of our benefits ensuring slow and steady profits.

  2. Another helpful article and more confirmation that I am in the right place with Daily Price Action.

    Swing trading very much fits around my lifestyle, although this week was the first week I had held a trade for more than a day, which had me checking my charts more often than is healthy!

    I much prefer the pace of swing trading the daily charts and the time you get to analyse trades before pulling the trigger.

    I still can’t believe how much decent free content you publish, way more than your average expensive course.

    Cheers for the help and I’ll see you in the forum.

  3. Hi Justin, you are there at it again, what a wonderful expository post.I will start the practice right away because it suits my personality.

  4. Thank you Justin for your wonderful clear and concise presentation on swing trading. I am an ex trader that needed to get back in the ‘swing” of things and felt it was very difficult to get into since I left.

    Not only did I think it was an easy read: clear, concise, simple, no fluff… , but it also gave me confidence in re-understanding the forex market and having a straight line to trying swing trading again possibly along with pre-Elliott Wave theory I learned from an old mentor I had.

    5 star rating. Many many thanks with best regards.


  5. J

    Swing-trading with options is more lucrative, but you can’t stay on too long. 1-4 days tops. Less if the option has just a week left. Get a slightly out of the money strike.

    Divergence gets you in before the move usually and lack of time gets you out fast.

    That’s how 500 bucks becomes 3K in 48 hours.

    If you’re risking more bucks then buy options with 4-6 weeks and play the same divergence game. Exit in a week or two if you’re deep in the money.

    That’s how 5K turns into 40K in a week.


    Put at 30 to 50 % your risk capital.


  6. Thank you for all your patient teachings. When it comes to drawing support & resistance levels, how can one utilise the Fibonacci tool? Won’t the Fibonacci levels always be the same as the support & resistance levels?

    1. The holding period won’t necessarily dictate the time frame you use. It comes down to how you define your targets and whether the strategy you’re using works best on the daily, weekly or monthly charts.

  7. Hi Justin
    I have been missing out on profits with my trades by not identifying a target. I have gone trough your Forex Swing Trading lessons which has cleared my mind but what I would like to know is whether I should move my stop to the resistance or support area when the price has moved beyond
    Kind Regards

  8. I like a bit of both swing & action trading can you give more info on 4H swing trading. Since I have been using price action ( which you showed me) my trading has become more stable less losses.
    Thanks Justin

  9. Ah, nice article. It improves my confidence in daily price action trading which consist swing trading. Thanks again Sir.

  10. WoW..This is great and awesome work Justin..Patience pays and i believe this trading style fits me perfectly, plus the best things in life are free and you’re not charging anything at all..Thank you very much for this..I’ve been demo-ing and looks great, i just “set it and forget it” its been a week now and i am about $250 in profit on the EURNZD short trade i took on the daily, i mean i couldn’t make that much before through day trading unless i risk by taking multiple multiple orders on one trade but swing trading only one order risking 3% got me up that much and trailed my stop loss and locked in at least $100..February 2018 am officially adopting this trading style and its highly profitable..
    Thanks once again Justin.

  11. Greetings guys. I’ve been trading for the past 2 years. its really been a bumpy road since i went the self taught route. i really would love to receive any form of help from someone who has found success in this market. Be it advice, books to read or anything that can help me move forward

  12. Hi Mr Bennett, I’m new. When you say l go to daily frame, all l know there is that the action is shown by one candle or a bar. Please help

  13. Thanks.
    As a swing trader can Fibonacci be used to identify the reversals? If yes how do you know when to use Fibonacci and how it works?

  14. Justin valuable information, I’m in the process of training and it’s been almost three years of learning and I’ve spent a few months just dedicated to swing operations and my trading has improved ostensibly, not only for the psychological part but for the different way of seeing the market. I work a very small real account but I hope to increase it in the future.
    I have a question in my operation I only look at the daily charts as a reference, I rely on 4H graphics, do you think I’m doing well? or should I get used to handling D.
    Thank you for the valuable information you share, see you.
    I apologize for the English but I use google translator.

  15. hi justin.I am interested in the Forex swing trading course and i deposited your account for $ 7.but I still did not receive the course.please check it

  16. thank you so much for this priceless information. i just came into learning how to trade forex last week. i will very much appreciate your support any time. God bless

  17. Hi
    Thanks for the content. I just wanted to ask, in your opinion, is it wise to focus on a few pairs or should i scan as many pairs as possible for set ups?

  18. Thank you sir. I like holding trade for some time and with this content, I no it will help me become a better trader and swing trader.

  19. Mr. Bennett i there a way to upload a picture here please……!?, there’s some chart that i tried to plot s&r, i want you to see if am right or wrong….

  20. Please may i ask if it will be good using the zigzag indicator on meta trader platform to get the swing high and low.

  21. Thank you for this your great heart of giving, and not just giving, but qualitative and insightful giving. I can’t wait to start profiting from these insights. Thank you once again, Justin.

  22. It is great to see someone who is sincere to have put smth up here on swings Only that I practiced same here also but on 15 minutes TF as a small trader so thatif perhaps I happened to be on wrong market it won’t take me much losses and daysor even months before I can know my faith
    But the author need to shed more light on entries on swings

  23. Thanks a million for your time and your ideas that are free shared here. You have helped simplified my trading approach as well.

  24. Thank you for the lesson, new to trading and tried a few, I hate scalping been trying swing and failing a times, the lesson helped me a lot. Looks like swing will be great for me.

  25. More benefits on swing trade, 1 spreads will never scared you, 2 commissions too, I pity scalpers😂😂😂😂

  26. Sorry to ask, but where is the download link? I consider this as one of the best educational forex lessons along with fx leaders. Congrats Justin!

  27. Hey Justin,
    Thanks a lot for sharing a great and informative article on this topic. As a professional trader, I really appreciate your Idea and off-course it will work rest on the future. And your presentation idea really caught my eyes. I think you will be happy to know that I also have some ideas like yours. If you like to visit my website I will be thankful to you.

  28. I am new in Forex Trading, but the way you explain Swing Trading is absolutely amazing and even encouraging to study it more and practice it.

  29. Nice insight. I just like to know if you wait for StopLoss or Target till candle is formed ( like waiting for end of day to trigger stoploss ).

  30. I bumped into your youtube videos last month, and ever since then I have been following you. Thank you for the efforts you put to give us these incredible insights for free. I really appreciate you my mentor!

  31. Thanks a lot for this information i really need to be a successful trader it’s been a long time trying to find a right information that can take me to the next level

  32. in this blog you give very intersting information about swing trading.Two types of trading are famous among traders, day trading and swing trading. Both of these differ depending on the capital required and the liquidity of markets.In both of the trading techniques, the main difference is the time. The day trader has less time to make his moves and earn a profit, whereas the swing trader has plenty of time to monitor his trades and implement profit-making strategies.

  33. Great article Justin.

    But as I understood, for swing trading strategy we should wait price action signals ( pinbar, engulfing bars at horizontal support and resistance levels or inside bar in a strong trend ) to entry.

    I don’t see you talked anything about using Chart Patterns for swing trading. Or are you using Chart Partterns in some other strategies?


  34. Trading an asset, a product/good or a commodity is a job of skills, patience, risk-taking ability and enduring some unfavourable times. Any market player that excels in the domain can run riots in the financial market in no time.
    However, not everyone possesses these qualities from heaven; some people get groomed and customise themselves from the usual for the passion of trading and quick money-making. Day trading is a weapon that fulfils these dreams where aptitude and attitude of an investor matter in equal measures.

  35. Swing trading depends on distinguishing swings in stocks, commodities, and currencies that occur over a time of days. For example, swing trades may require a couple of days to half a month to work out. In contrast to a day trader, a swing trader isn’t probably going to make trading a full-time vocation; however, a trader may decide to be a day trader and a swing traders.

  36. There’s a good number of rewarding swing trading strategies. Many of the basic, reconstructible patterns like trend pullbacks and support/resistance holding have a promise of a positive outcome.

  37. Thanks for all these lessons,but sincerely I need your help,am a beginner in forex but I need your help.Am kindly requesting you if you can be my mentor so that I push our family from zero to a standard level. Kindly waiting for your reply for God’s sake
    Deograsius from Uganda 🇺🇬

  38. Thank you for this stepwise approach to my chart, often times I mix it all up, I’ve been consistently unsuccessful at trading for more than two years

  39. Hi Justin, I just came across your site for the first time.

    Like you I began trading over 20 years ago now in 2002. Like you i moved onto forex but now i’ve moved back to indecies.

    I am profitable – not sure the word ‘consistently’ ever applies because at any moment something can throw a spanner in the works.

    However – talking about swing trading – i look at it this way, every single trade you take is a swing trade. you are looking for the market to turn and then continue in the turn direction. isnt that true for every single trade?

    Wether it’s a 10 second chart or a monthly chart – the only defining thing on this is how much you can rish and what your appetite for the ‘thrill of the chase’ is.

  40. I really find this helpful because I literally gain so much from this article. I am a Nigerian and I love swing trades because it’s perfect for my lifestyle as a 9-5 government employee and as a mother of four kids…. Sw ing trading makes me enjoy having time for other important things in my life. And more so it is stress free and has minimal anxiety. So keep up the good work Sir.

  41. Great article! As a trader, I appreciate the emphasis on swing trading in the Forex market. It’s a strategy that allows us to take advantage of medium-term trends while minimising intraday noise. The tips and insights shared here are invaluable for traders like us. Thanks for sharing this insightful information.

    Thomas from KQ Markets

  42. Scanning for setups is more of a qualitative process.So remember to scan for swing trade opportunities; never go searching for them. Justin explain to me more about this please

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