This is not investment advice. The information provided is for educational and informational purposes only and does not constitute a recommendation to buy or sell any financial product.
Swing trading on MetaTrader is a different use case from day trading on MetaTrader. The swing trader holds the position for days or weeks, and the platform's longer time frames (4-hour, daily, weekly) are the primary analytical tools. The swing trader does not need the one-click execution or the sub-second latency that the day trader needs; the swing trader needs the charting, the indicators, and the alerts that work across the longer time frames.
MetaTrader is well-suited to swing trading, because the platform's charting and indicators are designed for all time frames, and the platform's automated trading can be used for the position management.
The time frames for swing trading
The swing trader should use the daily chart for the overall trend, the 4-hour chart for the swing direction, and the 1-hour chart for the entry and the exit. The daily chart shows the long-term trend, the support and resistance levels, and the key levels. The 4-hour chart shows the medium-term moves and the swing's direction. The 1-hour chart shows the entry and the exit points.
The swing trader should also use the weekly chart for context, to see the long-term levels (the previous year's high and low, the long-term moving averages) that may act as the support or the resistance for the swing.
The indicators for swing trading
The moving averages are the most useful indicator for swing trading. The 50-day and the 200-day moving averages are the most common levels for the long-term trend and the support and resistance. The swing trader uses the moving averages to identify the trend direction and the potential entry and exit levels.
The MACD is the second most useful indicator. The MACD measures the momentum of the price, and the crossover of the MACD line and the signal line is a common swing trading signal. The MACD divergence (the price makes a higher high and the MACD makes a lower high) is a common signal for a trend reversal.
The RSI is the third most useful indicator. The RSI measures the speed and the magnitude of the price moves, and the RSI above 70 is considered overbought and the RSI below 30 is considered oversold. The swing trader uses the RSI to identify the potential reversal points.
The volume is the fourth most useful indicator. The volume confirms the price move: a rising price with a rising volume is a strong move, and a rising price with a falling volume is a weak move. The swing trader uses the volume to confirm the entry and the exit.
The entry and the exit for swing trading
The entry for a swing trade is at a level where the price is near the support (for a long trade) or near the resistance (for a short trade), with the indicators confirming the direction. A long trade entry near the 50-day moving average with the MACD crossing to the upside and the RSI below 70 is a high-probability entry.
The exit for a swing trade is at a level where the price has reached the target (the resistance for a long trade, the support for a short trade) or where the indicators have reversed (the MACD crossing to the downside for a long trade). The swing trader should set the stop loss at a level below the most recent swing low (for a long trade) or above the most recent swing high (for a short trade).
The MetaTrader alerts for swing trading
The MetaTrader alerts are essential for swing trading. The swing trader sets the alert at the key levels (the moving averages, the previous swing highs and lows, the Fibonacci levels), and the trader receives a notification when the price reaches the level. The alert ensures that the trader does not miss the entry or the exit while away from the desk.
The MetaTrader platform also supports email and push notifications for the alerts, and the trader can set the alerts to send a notification to the phone. The notification is the swing trader's way of staying in touch with the market without being at the desk all day.
The risk management for swing trading
The risk management for swing trading is the same as for any leveraged strategy. The trader should use a risk budget per trade (1-2% of the account), a position size calculated from the stop and the budget, and a stop loss that corresponds to the strategy's invalidation point.
The swing trader should also consider the overnight risk. A position that is held for several days is exposed to the gap risk (a gap at the next open), and the swing trader should size the position to account for the gap. The swing trader should also avoid holding the position over a known event (an earnings release, a Fed meeting, a CPI print) without reducing the position size.
Related resources
Where to start
If you are evaluating MetaTrader for swing trading, the most useful first step is to set up the daily and 4-hour charts with the moving averages, the MACD, the RSI, and the volume indicators, and to practice identifying the swing entries and exits on a demo account. Our broker comparison lists the MetaTrader brokers and the available products, which together tell you what the platform looks like before you open a live account.