Learn To Trade Forex With A Full-Time Job

Managing macroeconomic news

A great thing with swing trades is that you don’t need to care that much about macro news as with intraday trades. With swing trades, your Profit Target and Stop-loss values are much higher – averaging around 100 pips. This means that even higher volatility caused by most of the standard news won’t endanger your swing trades as much as if you were trading intraday. For this reason, I suggest you don’t avoid trading during the standard news. There are however some really strong macro events that you need to avoid even with swing trades. I call these the “Monster red news“. Such news is capable of changing or starting new daily/weekly/monthly trends. The “Monster red news” is news which directly affects monetary policy. Here are some examples of such news:

• Rate Decision, Minimum Bid Rate (and following press conference)
• FOMC Meeting, Monetary Policy Statement (and following press conference)
• NFP (when market feels that NFP number can directly affect Rate Decision)

It is vital to quit all your trades before the macro event and not to open a new trade until the post-news volatility has settled down.

What I suggest is that you check the next day’s macroeconomic events (for example on Forex Factory). If there is a “Monster red news” then you quit all your swing trades. It doesn’t matter if this is still many hours before the news. What matters is that you won’t be caught in a bad macro trade while you are at work the next day.

You also need to discard your limit orders so no new trade will get triggered during the “Monster red news”. You don’t need to delete all limit orders. This concerns only the ones that are directly affected by the particular macro. So for example, you don’t need to delete limit orders on the AUD/USD when there is ECB rate decision (this macro affects mostly the EUR). However, if there is, for example, RBA Rate Decision news (this affects the AUD) then you definitely need to delete your limit orders on the AUD/USD and on all trading instruments related to the AUD.

TIP: There is a little trick so you don’t have to delete your limit orders and re-enter them again if the news didn’t hit them. The trick is that you lower the volumes of the pending limit orders to a minimum value before the “Monster red news” release. So, even if the level gets hit during the news, you only risk few cents or a dollar. After the news has passed, you only need to raise the volumes again. This is a pretty fast and easy way to avoid the news without having to re-enter all the limit orders again and again. This trick works with cTrader trading platform which I use. There is probably some plugin that will allow you to do the same trick also with Metatrader.

Position management

You only need to check your current swing trades once a day so you want to do it in the 10-minute block. With a good swing trading strategy, it is not necessary to use any sort of elaborate position management. I suggest that you only  trade using simple limit orders with fixed Profit Target and the Alternative SL (which I prefer to the standard fixed SL)

Go quickly over all your trades and see if there was any Profit or a Loss.  If there was, then you need to write the result and necessary details down into your trading journal. It is also handy to take a screenshot of your trade and add a brief commentary. For taking screenshots I use a free program called Lightshot.

As far as Stop-loss management is concerned, I suggest you use the Alternative SL method. With this method, you need to check how the current Daily candle closed every day. If a daily candle closed past your SL, then you need to manually quit your trade. This may look difficult but in fact, it takes only a few moments to check and it is much more effective than the standard fixed Stop-loss method.

Money management

Because swing trades usually have different SL/PT pip values, you need to adjust your position size so you risk the same amount of money on every trade. If you trade with IC market’s cTrader platform, you have a handy position calculator as a part of it. If your trading software can’t calculate position sizes, you can, for example, use this calculator: Position size calculator

Summary

• Create your swing trading levels or use mine. You do this once per two weeks.
•  Have a 10-minute trading block every day in which you:
  • Go through upcoming macro news and close any limits/running trades if there is a “Monster red news” the next day.
  • Review your current trades and see if there is any trade that needs to be manually closed (daily candle closed past your SL).
  • If any trade reached Profit or a Loss today then take a screenshot and write the details of the trade down into your trading journal.

Happy trading,

-Dale

P.S. Below are three videos with some of my swing trades and with the reasoning behind the trades. Those videos should help you understand how to trade swing trades with Volume Profile and show you what to expect from such trades.