4 Intermediate Strategies to Use to Make the Most of Forex Trading

4 Intermediate Strategies to Use to Make the Most of Forex Trading

If you have been trading forex for a while, you may be wondering how you can take your trading to the next level without trading forex derivatives. The good news is that there are many forex trading strategies that intermediate traders can try out to continually hone their skills.In this article, we examine four of them: swing trading, position trading, scalping, and breakout trading. They are great ways for more experienced traders to try out trading in different timeframes, and they can allow traders to develop a stronger understanding of how technical tools work.

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Swing trading

Swing trading is a strategy that involves holding positions for a few days to take advantage of medium-term price movements, or price swings. This strategy requires traders to have a knowledge of how the forex market works and the trends of the currency pair they are trading. It requires traders to look at patterns and trends in price charts to identify entry and exit points.

Position trading

Position trading is a longer-term strategy, and it involves holding positions for several weeks to months. This is a good way for traders to hone their skills in fundamental analysis, as this approach will require a strong understanding of market fundamentals that can sway price movements over the long term. Instead of fixating on little rises and dips in the market, traders look for longer term trends and identify potential investments with the use of fundamental analysis.


Scalping is a short-term strategy that involves holding positions for a few seconds to a few minutes. This is a high frequency trading strategy, meaning that traders may enter and exit markets up to hundreds of times a day. The idea is to take advantage of small market movements and reap small profits that can add up. Scalping is a time-consuming strategy that requires traders to monitor the markets closely to execute trades, so it may not be the most suitable strategy for many traders.

This strategy also requires traders to have a strong understanding of market psychology and technical analysis, as their trades will be made based on what the price charts tell them. For traders who enjoy making quick decisions and are confident in predicting market movements in the ultra-short term, this is a great way to trade the dynamic forex market.

Breakout trading

Breakout trading is a strategy that involves buying or selling a currency pair when it breaks through a significant price level that has previously been determined by the trader. To execute this strategy, traders must have a strong understanding of technical analysis and know how to calculate the support and resistance levels of an instrument. They can then identify the key levels required for a price to break through before entering a trade.

Risk management techniques for these strategies

These four strategies can potentially bring profits for forex traders, but they must be used alongside a sound risk management plan. Exchange rates of currency pairs fluctuate constantly, and traders should be prepared should the markets perform adversely.

Use leverage appropriately

Traders should use leverage appropriate to their risk appetite when trading forex. As price movements in the forex market are small, many intermediate traders may be tempted to use high leverage offered by brokers to make the most of their potential returns. However, while leverage can amplify potential profits, it can also amplify potential losses. Knowing how much you can afford to lose and never using too high leverage is the key to ensuring you do not accidentally wipe out your funds.

Have a trading plan

You should also always have a trading plan. This is a document that outlines your strategy and how you plan to trade the forex market. You should make sure your plan is well-defined, outlining your risk appetite, your approach, and the currency pairs you intend to trade. If you have a trading plan, you are less likely to make impulsive decisions that could cost you.

Use stop-loss orders

Finally, implementing stop-loss orders when you enter a forex trade is crucial. A stop-loss order allows you to close a trade automatically at a predetermined price that is less favourable than the current market price. Should there be undesired price movements, you will be able to limit potential losses.

Bottom line

Forex trading is an exciting endeavour not just for novice and advanced traders. If you are an intermediate trader who is feeling a bit uninspired and wondering how to take your trading skills to the next level, the above four strategies are a good place to start. Regardless of the strategy you choose to use, remember that there is no guarantee of profits in trading, and you should never trade with more than you can afford to lose.