Hello Fellow Traders,
I am new to trading, want to learn mid (a week) to long term trading (weeks/months). Which strategies are best suited for it (wave analysis etc.), how should I go about it, what to keep in mind etc. also, any links to good learning material.
In case if you are going to switch to swing/mid term trading, you will have to pay much more attention to the fundamental issues. When you hold your position opened long enough, you expose it to numerous fundamental factors, so you will have to take into account them all. First of all, you should be ready to sudden gaps both in favorable and also in the opposite directions that occur when something important happens when the market is closed, at the weekinds. These gaps could be substantial enough, so you should increase you risk and reduce the positions size to avoid huge losses. This is the most difficult part of swing trading, because when the price opens with the gap, you can do nothing with this while stops are useless - the price just opens on the new level. That is why it is so difficult ot manage your risk in swing trading.
The stragies used for swing trading should include fundamental analysis, as well as some elements of technical analysis to. In most of the cases, you will find an idea using fundamental analysis and then search for the way to benefit from it using tecnhical analysis. Various patterns and setups will help you to get into the position with an optimal risk-reward ratio - for example, during the pullbacks. By the way, the profit potential in swing strategies is often better than in daytrading ones, so you can make mistakes more times and still be profitable. An average risk-reward ratio for swing/mid-term strategy is 1:7 - 1:10 or even better.
Do not jump into this if you are new to trading. Open up a demo account and gain some experience first.
For long term trades you should learn more about major support and resistance levels, and how to find them because price will always head to these areas. Check out the journal section, there are some great ideas from other members. Also, concentrate on pairs that have been trending up or down for an extended period on the weekly/monthly. Since the idea here is to carry this trade long term, you’ll want to consider the daily fees/credits (depending on whether you’re long or short) associated with the pair(s) you are trading.
There is so much more involved than what’s been mentioned. But be patient and take some time to educate yourself and gain some experience, otherwise you will most likely fail.