Forex Trading Medium Term Strategy

Medium-term positions are typically held for periods ranging
anywhere from a few minutes to a few hours, but usually not
much longer than a day. Just as with short-term trading, the
key distinction for medium-term forex trading is not the length
of time the position is open, but the amount of pips you’re
seeking/risking.
Where short-term forex trading looks to profit from the routine
noise of minor price fluctuations, almost without regard for
the overall direction of the market, medium-term trading
seeks to get the overall direction right and profit from more
significant currency rate moves.

Almost as many currency speculators fall into the mediumterm
category (sometimes referred to as momentum trading
and swing trading) as fall into the short-term trading category.
Medium-term trading requires many of the same skills as
short-term trading, especially when it comes to entering/
exiting positions, but it also demands a broader perspective,
greater analytical effort, and a lot more patience.

Capturing forex intraday price moves for maximum effect
The essence of medium-term trading is determining where a
currency pair is likely to go over the next several hours or
days and constructing a trading strategy to exploit that view.
Medium-term traders typically pursue one of the following
overall approaches, with plenty of room to combine strategies:

1> Trading a view: Having a fundamental-based opinion on
which way a forex currency pair is likely to move. View trades
are typically based on prevailing market themes, like
interest rate expectations or economic growth trends.
View traders still need to be aware of technical levels as
part of an overall trading plan.

2> Trading the technicals: Basing your market outlook on
chart patterns, trend lines, support and resistance levels,
and momentum studies. Technical traders typically spot
a trade opportunity on their charts, but they still need to
be aware of fundamental events, because they’re the catalysts
for many breaks of technical levels.

3> Trading events and data: Basing positions on expected
outcomes of events, like a central bank rate decision or a
G7 meeting, or individual data reports. Event/data traders
typically open positions well in advance of events and
close them when the outcome is known.

4> Trading with the flow: Forex trading based on overall market
direction (trend) or information of major buying and selling
(flows). To trade on flow information, look for a broker
that offers market flow commentary. Flow traders tend to stay out of shortterm
range-bound markets and jump in only when a
market move is under way.