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Medium-Term FX Trading

FX Trading Analysis

If you are at the FX trading market, you need to consider the timeframe you intend working in.  Many traders look at short-term strategies because they feel this is the best option.  However, short-term FX trading is not the best option for all traders, but long-term trading may not be the most suitable option either.  For these traders medium-term options are the best route.  It is important that you understand what medium-term trading is and what it offers you.

What is Medium-Term FX Trading?

Before you look at trading in the medium term you have to understand how it differs from the short and long-term strategy.  The short-term strategy allow for quick profits or losses.  However, this requires large capital amounts or the use of leverage because the profit movements are so small.  Long-term trading offers more reliable profits because it is based on fundamental analysis.  However, you need large capital amounts for this due to the volatile movements of the positions.

Medium-term traders often hold a position for one or more days.  This strategy does not require large capital amounts and leverage is only used to boost the profit but not necessary to make profit.  The problem with this trading is that there are fewer opportunities.  The trades are also more difficult to identify and execute.

The Framework for Medium Term Trading

The framework for medium term trading can be covered by one concept and that is trading with the odds.  For this to be done various techniques are used to determine whether a trade is going to be profitable or not.  You need to use a number of technical signals and ensure that they are all pointing in the same direction.

Analysis Tools

For trading on the medium term you need use a trading program that has two basic points.  The first thing you need is the ability to see 3 different time frames at the same time.  You also need to be able to plot technical indicators on the charts.  The indicators you should use include moving averages, RSI and MACD.


When you use more than one indicator for this trading you will get a more reliable system.  However, the more reliable the system the fewer trading opportunities you will find with the medium term.  It is important that you use certain indicators on certain timeframe charts.  The 3 charts you need to use are the minute candlestick chart, the hourly candlestick chart and the daily candlestick chart.

With the minute chart there are three indicators that you can use.  These are the RSI, the MACD and the stochastics.  With the hour charts there are four indicators that you could use.  These are the 100 EMA, the 10 EMA, the 5 EMA and the MACD.  There is only one indicator you should use with the daily chart and that is the 100 SMA.

There are other indicators that can be used, but these are not as common.  It is possible to incorporate trend lines, Fibonacci retracements, fans and arcs, as well as support and resistance levels.



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