With so many different trading strategies and ways to bear fruit in the financial market, the greatest financial return for the majority of investors comes with medium-term trading strategies. While scalpers try to open positions on the spur of the moment and sometimes even on impulse, long-term trading may require months or years to close a particular deal.

This is where medium-term trading appears to be the "golden mean", so to speak. The strategy considers participating in daily and weekly moves that are less time-consuming if compared to long-term tactics and more profitable than scalping.

Of course, medium-term Forex trading is not the Wholly Grail that guarantees to win each and every deal. Besides, trend moves may take some time and perform not as often as we want them to perform. Also, the strategy comes with a certain risk. Nevertheless, it still delivers potentially strong trading conditions as well as plenty of room on the stop loss. What is so special about medium-term Forex trading? Why is it considered one of the best strategies for both beginners and experienced pros?

What crucial issues are to consider when opting for this particular approach? The term speaks for itself. Medium trading means holding a position for a medium period. It may range from a few days to several weeks.

What makes this strategy so special is that it requires less initial capital to trade if compared with short and long-term approaches. This is why medium trading is considered as the best option for newbies. The main downside here is that such tactics ensure fewer trading opportunities. Besides, a trader is supposed to have a solid technical background as well as the ability to conduct in-depth market research and analysis. Learning some baseline aspects of Technical Analysis can be enough but only for a start.

The concept is pretty simple. A trader needs to monitor trends within several timeframes. Additionally, you have to use a variety of financial indicators to compare and contrast the movement over a specific period.

This is where moving average or stochastic may come in handy. Moreover, here are some other Forex indicators that you might need:. Your ability to analyze those charts and indicators will eventually define the ability to generate profitable trend ideas.

Medium-Trading Example: let's say, you identify the inverse head and shoulder pattern with the help of the hourly chart. At the same time, stochastics moves upwards to make the crossover in the area with an overselling environment. What would you do? A good idea is to enter the market with an order placed above the neckline resistance. As a rule, medium traders place exit points at key levels as well as around psychological and support and resistance levels.

Above all, you also need to follow the latest economic news and reports, as vital tools to modify and customize your current trading tactics. MTrading not only offers risk-free demo account and the Copy Trade service to copy deals of pro traders, but also puts no restrictions on strategies used by our traders. With our Live account you can use all potential for earning. As we have stated earlier, this particular strategy does not guarantee profits.

Besides, it calls for in-depth knowledge of Forex indicators and charts. And if you are able to master them, you will benefit from:. If you decide to stick to the medium-term concept, you are supposed to hold positions from one day to several weeks.

Make sure you conduct deeper analysis if compared to short term trading. You will need to examine the trend's anticipated and historical performance. It will require following some baseline steps. It all starts with gathering as much information about the trend as you can.

The stage can be divided into three main phases:. Now you need to put all facts together. Make sure you have compared the asset performance at least over the last 12 months. Keep an eye on the most recent trading data and compare it with the previous period. Stay tuned with the industry or company's key upcoming events.

This is where you can make the most of historical price charts. A standard definition of medium-term trading in Forex would limit the holding period — from entry to exit — of one day to five days. Medium-term in equities would be on the order of several weeks or months.

As with short-term trading but on a different scale, medium-term trading limits the amount of risk you are taking, since when you are out of the market, you are taking zero risk. And also similar to short-term trading, medium-term trading allows you the luxury of walking away from your screen. You are not chained to your desk, and do not need to take any trade unless the chart presents you with conditions you consider tradable.

While true short-term trading emphasizes bar and candlestick patterns that reflect immediate sentiment, medium-term trading employs any and all of the techniques in the technical analysis toolkit, including support and resistance , the math-based indicators RSI , MACD , stochastics , etc.

Many indicators require more than a few hours to develop, including support and resistance and some patterns, like head-and-shoulders. You can draw a support line on a 5-minute chart, but it will be less useful and reliable than a support line on an hourly or daily chart. If you see a head-and-shoulders on a 5-minute chart, it could be authentic or it could be an accident of randomness. One useful characteristic of medium term-trading is that the mindset associated with the longer timeframe allows multiple entries and exits on the same move.

This is where consulting charts of multiple timeframes comes in handy, as do well-constructed stop and take-profit rules. We have a double bottom that suggests a lasting uptrend, and that diagnosis is confirmed when the price exceeds the center high of the W-shaped formation.

The price has been rising for several weeks and is a well-established uptrend. Now, see the daily chart of the same currency pair below. This chart shows the penultimate daily bar is an inside day high and low within the limits of the high and low the day before , suggesting uncertainty and possibly less bullishness. The important point is that a new higher high is clearly not occurring and it is noon in New York on a Friday.

All the news for the day is out and a higher high cannot be expected now. Meanwhile, the stochastic oscillator in the bottom window shows the GBP to be seriously overbought, a confirmation that a pullback is forming. We go short at 1. Now, consider the 4-hour chart below. We are searching for the place the temporary downmove will end, and there are several possibilities. We have a plain vanilla diagonal support line.

We have the period center line of the Bollinger Band. We have a parabolic reversal dot. Finally, we have the horizontal midpoint of the big upside breakout bar. We expect a pullback not to exceed the previous lowest low and thus horizontal line does that, as well as exceeding the bottom of the Bollinger band.

If either or both get broken, the pullback could mean a much bigger deal than we are imagining right now.

With so many different trading strategies and ways to bear fruit in the financial market, the greatest financial return for the majority of investors comes with medium-term trading strategies. While scalpers try to open positions on the spur of the moment and sometimes even on impulse, long-term trading may require months or years to close a particular deal. This is where medium-term trading appears to be the "golden mean", so to speak.

The strategy considers participating in daily and weekly moves that are less time-consuming if compared to long-term tactics and more profitable than scalping. Of course, medium-term Forex trading is not the Wholly Grail that guarantees to win each and every deal.

Besides, trend moves may take some time and perform not as often as we want them to perform. Also, the strategy comes with a certain risk. Nevertheless, it still delivers potentially strong trading conditions as well as plenty of room on the stop loss. What is so special about medium-term Forex trading?

Why is it considered one of the best strategies for both beginners and experienced pros? What crucial issues are to consider when opting for this particular approach?

The term speaks for itself. Medium trading means holding a position for a medium period. It may range from a few days to several weeks. What makes this strategy so special is that it requires less initial capital to trade if compared with short and long-term approaches. This is why medium trading is considered as the best option for newbies. The main downside here is that such tactics ensure fewer trading opportunities. Besides, a trader is supposed to have a solid technical background as well as the ability to conduct in-depth market research and analysis.

Learning some baseline aspects of Technical Analysis can be enough but only for a start. The concept is pretty simple. A trader needs to monitor trends within several timeframes. Additionally, you have to use a variety of financial indicators to compare and contrast the movement over a specific period. This is where moving average or stochastic may come in handy.

Moreover, here are some other Forex indicators that you might need:. Your ability to analyze those charts and indicators will eventually define the ability to generate profitable trend ideas.

Medium-Trading Example: let's say, you identify the inverse head and shoulder pattern with the help of the hourly chart. At the same time, stochastics moves upwards to make the crossover in the area with an overselling environment.

What would you do? A good idea is to enter the market with an order placed above the neckline resistance. As a rule, medium traders place exit points at key levels as well as around psychological and support and resistance levels. Above all, you also need to follow the latest economic news and reports, as vital tools to modify and customize your current trading tactics.

MTrading not only offers risk-free demo account and the Copy Trade service to copy deals of pro traders, but also puts no restrictions on strategies used by our traders. With our Live account you can use all potential for earning. As we have stated earlier, this particular strategy does not guarantee profits. Besides, it calls for in-depth knowledge of Forex indicators and charts. And if you are able to master them, you will benefit from:.

If you decide to stick to the medium-term concept, you are supposed to hold positions from one day to several weeks. Make sure you conduct deeper analysis if compared to short term trading. You will need to examine the trend's anticipated and historical performance. It will require following some baseline steps. It all starts with gathering as much information about the trend as you can. The stage can be divided into three main phases:.

Now you need to put all facts together. Make sure you have compared the asset performance at least over the last 12 months. Keep an eye on the most recent trading data and compare it with the previous period.

Stay tuned with the industry or company's key upcoming events. This is where you can make the most of historical price charts. The idea is to create an asset roadmap that covers 12 months of its performance based on the data you managed to generate and process at the first two steps.

Example: let's say a company has published the official report in June. You need to consider it and check how the price changed after it was revealed.

The next stage is to observe the roadmap and try to predict various scenarios. If not doing this, a trader is unable to respond quickly to the market changes.

To understand, how the trend can move in the future, ask yourself:. Technical Analysis is never enough when it comes to medium-term trading. Get ready to process piles of charts, reports, analytics, etc. Your mission is to find the most appropriate entry and exit points. Read more about technical analysis in our article. Although medium-term trading is considered as very risky, it is still one of the most effective approaches.

What 's more, it suits a wider range of traders including both amateurs and pros. The concept delivers more flexibility in terms of timing though it calls for deeper analytics, examination, and research. Once you are ready to enter the real financial market, open the LIVE account , and start your successful trading. This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. What Medium-Trading Is and How It Works The term speaks for itself.

How It Works The concept is pretty simple. In this image you can see where Support and Resistance levels are. Moreover, here are some other Forex indicators that you might need: Support and Resistance Levels; Trend Lines; Fibonacci Retracement and Extensions; Pivot Points and Candlesticks.

Medium Term Trading Pros and Cons As we have stated earlier, this particular strategy does not guarantee profits. And if you are able to master them, you will benefit from: Flexibility — the strategy suits a wider range of traders.

Predictability — asset trends from the portfolio can determine further performance. Stress-Free — medium-term strategies usually come with reduced stress if compared to scalping, for instance. As for the most popular strategy cons, they are as follows: In-Depth Analysis required. You will have to use more instruments than with short-term trading.

Macro and Microeconomics Impact to consider. Medium-Trading Strategy Tips If you decide to stick to the medium-term concept, you are supposed to hold positions from one day to several weeks. Step 1 — Collect the Data It all starts with gathering as much information about the trend as you can. The stage can be divided into three main phases: Performance Info - Let's say you trade stocks. So, be prepared to learn as much about the company as possible. Examine everything you can from revenue and sales reports to debts, the company's own predictions, and plans for the future.

Historical Movements - Look for prior company's prior reports, dividends, etc. Compare those figures with earlier reports to observe the trend movement.

Prediction - Consider the company's news and predictions. Find out what the expectations for the future are. What are the market risks? The idea is to make yourself feel confident about the asset. Step 2 — Tie the Collected Data Together Now you need to put all facts together.

Step 3 — Build a Roadmap This is where you can make the most of historical price charts. Step 4 — Consider Various Scenarios The next stage is to observe the roadmap and try to predict various scenarios. To understand, how the trend can move in the future, ask yourself: What is the possible outcome if not considering news or events? What expectations are priced into the outcome of the asset? Are there potential unexpected issues to occur? The idea is to be mentally prepared for any price move even despite your predictions.

Step 5 — Technical Analysis Technical Analysis is never enough when it comes to medium-term trading. Final Word Although medium-term trading is considered as very risky, it is still one of the most effective approaches.

What is so special about medium-term Forex trading? As a rule, medium traders place exit points at key levels as well as around psychological and support and resistance levels. Topic 01 - Classifying the Market Topic 02 - Short-Term Trading Topic 03 - Medium-Term Trading Topic 04 - Long-Term Trading Topic 05 - Trading Styles Appropriate in Different Market Types Topic 06 - Trading Breakouts Topic 07 - Trading Pullbacks. Next lesson Topic 04 - Long-Term Trading. The idea is to make yourself feel confident about the asset. Get ready to process piles of charts, reports, analytics, etc. Now, see the daily chart of the same currency pair below.

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