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2. Intermediate Strategies

Transition trading

You’ve probably never heard of this before because I came up with it.

Here’s how…

Back while I was in proprietary trading, one of the “interesting” things I learned was transition trading.

You’re probably wondering:

“What is transition trading?”

Well, the idea is to enter a trade on the lower timeframe, and if the market moves in your favor, you can increase your target profit or trail your stop loss on the higher timeframe.

Here’s an example:

Let’s say you traded the breakout on GBP/JPY 1-hour timeframe and the price quickly went in your favor.

Now…

You noticed the 4-hour timeframe respecting the 20MA.

So instead of taking profits, you trail your stop loss using the 20MA hoping to ride a bigger move.

And if you’re wrong, you’ll exit your trade when the price closes below the 20MA.

forex strategies

Now, there are variations of transition trading.

But the main idea is this:

  1. Find an entry on the lower timeframe
  2. If the price moves in your favor, consider planning your exits on the higher timeframe

Now, let’s discuss the pros and cons of transition trading…

The pros:

  • Can get an insane risk to reward (possibly 1 to 10 or more)
  • Can lower your risk as your entry is on the lower timeframe

The cons:

  • Only a handful of your trades will lead to monster winners
  • Must understand multiple timeframes really well

Now that you have an idea of the different forex trading strategies out there.

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2. Intermediate Strategies

Scalping

I don’t recommend scalping for the retail traders because the transaction cost will eat up most of your profits.

And you’re slower than the machines which put you at a major disadvantage.

Still, if you want to learn more, then read on…

Scalping is a very short-term strategy where you’ll hold trades minutes or even seconds.

As a scalper, your concern with what the market is doing now and how you can take advantage of it.

The main tool you’ll use to trade is order flow (which shows you the buy and sell orders in the market).

An example:

forex strategies

Now, let’s discuss the pros and cons of scalping…

The pros

  • Have lots of trading opportunities each day
  • Can make a healthy income from trading

The cons

  • High financial cost (paying your software, newsfeed, connection, and etc.)
  • Glued to the screen for many hours a day
  • It’s a highly stressful endeavor

Lastly…

If you want to be a scalper, I recommend you join a proprietary trading firm because they will provide the tools to help you with it.

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2. Intermediate Tutorial

Day trading

Day trading a short-term trading strategy where you’ll hold your trades for minutes or even hours (it’s similar to swing trading but at a “faster” pace).

The timeframes you’ll trade on are usually the 5mins or 15mins.

As a day trader, your concern is to capture the intraday volatility.

This means you must trade the most volatile session of your instrument because that’s where the money is made.

So, you’ll likely:

  • Buy Support
  • Sell Resistance
  • Trade breakouts
  • Trade pullbacks
  • Trade the bounce of the moving average

Now…

If you’re a day trader, you won’t be concerned with the fundamentals of the economy or the long-term trend because it’s irrelevant.

Instead, you’ll identify your bias for the day (whether to be long or short) and trade that direction for the session.

An example:

Below is the chart of USDCAD (4-hour timeframe) at 1.2900 Resistance.

If the price can’t break above it, chances are, today will be a “down” day.

Next…

On the 15-minute timeframe, you noticed a Shooting Star has formed which signals selling pressure.

You can take a short trade with possible target profit at Support (blue box).

Here’s what I mean:

Now, let’s discuss the pros and cons of day trading…

The pros:

  • If you’re good, you can make money on most months
  • No overnight risk because you close your positions by the end of the day

The cons:

  • It’s stressful as you’re constantly watching the markets
  • Can lose a lot more than intended if you suffer massive slippage (from Black Swan events)
  • Huge opportunity cost as you could be earning a full-time salary elsewhere

Now if day trading is still too “slow” for you, then the next forex trading strategy might suit you…

Categories
2. Intermediate Strategies

Swing trading


Swing trading is a medium-term trading strategy where you can hold trades for days or even weeks.

The timeframes you’ll trade on are usually the 1-hour or 4-hour.

As a swing trader, your concern is to capture “a single move” in the market (otherwise called a swing).

So you’ll likely:

  • Buy Support
  • Sell Resistance
  • Trade breakouts
  • Trade pullbacks
  • Trade the bounce of the moving average

Thus, it’s important to learn technical concepts like Support & Resistance, candlestick patterns, and moving average.

Here’s an example of swing trading on USD/JPY:

Now, let’s discuss the pros and cons of swing trading…

The Pros:

  • Don’t have to quit your full-time job to be a swing trader
  • It’s possible to be profitable every year because you have more trading opportunities

The Cons:

  • Won’t be able to ride big trends
  • Have overnight risk

Now, if you want to learn more about swing trading, then The Complete Guide to Finding High Probability Trading Strategy will help immensely.

Categories
2. Intermediate Strategies

Position trading


Position trading is a longer-term trading approach where you can hold trades for weeks or even months.

The timeframes you’ll trade on are usually the Daily or Weekly.

As a position trader, you mainly rely on fundamental analysis in your trading (like NFP, GDP, Retail sales, and etc.) to give a bias.

Also, you might use technical analysis to better time your entries.

Let’s say:

You analyze the fundamentals of EUR/USD and determine it’s bullish. But, you don’t want to go long at any price.

So, you wait for EUR/USD to come to Support before taking your position.

Now if your analysis is correct, you could enter at the start of a new trend before anyone else.

An example:

Now, let’s discuss the pros and cons of position trading…

The pros:

  • Don’t need to spend much time trading because your trades are longer-term
  • Less stress in your trading as you’re not concerned with the short-term price fluctuations
  • favorable risk to reward on your trades (possibly 1 to 5 or more)

The cons:

  • Require a firm understanding of fundamentals driving the market
  • Need a larger capital base because your stop loss is wide
  • May not make a profit every year because of the low number of trades

And lastly…

There’s a trading strategy called Trend Following (which is similar to position trading).

The only difference is Trend Following is purely a technical approach that doesn’t use any fundamentals.

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How Do Student Loan Interest Rates Work?

Unfortunately, how much you originally borrow in student loans is not how much you’ll repay. Thanks to interest charges, your loan balance can grow over time. Interest can cause you to pay thousands more than you originally borrowed, so it’s important that you understand exactly how much interest you should be paying per month.

For federal subsidized loans, the government covers the cost of interest that accrues while you’re in school and during the six-month period after you graduate. After that, you’re responsible for all interest charges. 

For federal unsubsidized and private student loans, interest starts accruing on your debt as soon as the loan is disbursed. Interest will continue to grow while you’re in school and during your loan grace period—the time before you start having to make payments.

Making payments while you’re still in school and during your grace period can reduce the total you’ll repay over the length of your loan, helping you save money.

While there are repayment plans—such as income-driven repayment plans—that allow you to extend your repayment term, doing so can cause you to pay back more money in interest. Alternatively, you can also consolidate your loan to lessen your monthly payments, though the longer life of the loan could result in you having to pay thousands of dollars more in accrued interest.

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How Can You Apply for Student Loans?

If you need to apply for student loans, the process you’ll follow is dependent on the loan type. 

Federal Student Loans

  1. Fill out the FAFSA: First, complete the FAFSA. While the federal deadline isn’t until June, state and school deadlines can be much earlier. To give yourself the best chance of getting financial aid, submit the FAFSA as early as possible in the year. 
  2. Complete the CSS Profile: Some schools use the CSS profile to determine who receives non-federal aid, such as institutional scholarships or grants. Complete the CSS profile early on in the year to increase your chances of winning an award. 
  3. Review your offer letter: When colleges send you an acceptance letter, they will contain financial aid information, including federal student loans. The letter will include details on how to accept the offered financial aid. 

Private Student Loans

With private student loans, the process is more straightforward. You can shop around with multiple lenders. Many companies will allow you to get a rate quote with just a soft credit inquiry, which has no impact on your credit score. 

Once you find a lender and rate that works for you, you can submit your application. The lender will ask for details like: 

  • Your name
  • Address
  • Social Security number
  • School name
  • Income
  • Employment information
  • Rent or mortgage payments

If you have insufficient income or too low of a credit score, you can also add a cosigner to your application. 

Once you submit the application, the lender will review your application and decide whether or not to issue you a loan. In most cases, you’ll receive a decision within a couple of business days.

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How Can You Qualify for Student Loans?

Before considering private student loans, make sure you exhaust all of your federal student aid options. Fill out the Free Application for Federal Student Aid (FAFSA) as early as possible to ensure you get all the financial aid you’re entitled to receive. 

For undergraduate loans, federal student loans do not have minimum credit score or income requirements, making it an excellent choice if you don’t have steady income or an established credit history.

If you use all of the available federal aid and still need help paying for school, you can shop around for the best private student loans. Each lender operates independently from one another, and they have their own credit and income requirements.

As a college student, you can improve your chances of qualifying for a loan—and getting a competitive interest rate—by adding a cosigner to your loan application. A cosigner is usually a friend or relative with good credit and reliable income who applies for the loan with you. If you can’t keep up with the payments, the cosigner is responsible for them, instead.

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Best for Students Without a Cosigner: Funding U

As a college student, you may not have an established credit history or income, and can struggle to qualify for a private student loan on your own. If you don’t have a parent or relative to act as a cosigner, getting a loan can be difficult. If you don’t have access to a cosigner, Funding U may be the best option for you.

Unlike some other lenders who offer non-cosigned loans, Funding U allows undergraduate students of all grade levels to qualify for loans. You must be a U.S. citizen or permanent resident over the age of 18, and you can borrow $3,000 to $10,000 per year. Your eligibility for a loan is based on your GPA, extracurricular activities, and work experience.

The interest rate on undergraduate student loans for the 2020-2021 school year is 7.99% to 14.49%, including a 0.5% autopay discount.14

Unfortunately, Funding U only lends to residents of certain states. You must live in one of the following states to qualify for a loan: Arizona, Arkansas, Colorado, Connecticut, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Maryland, Massachusetts, Michigan, Missouri, Nebraska, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Vermont, Virginia, West Virginia, and Wisconsin.

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Best for International Students: MPOWER Financing

Unfortunately, international students often struggle to find private student loans to pay for school, especially if they don’t have access to a cosigner who is a U.S. citizen. For those students, MPOWER Financing is the best lender. 

MPOWER Financing offers undergraduate and graduate student loans to international students as well as U.S. citizens, permanent residents, and Deferred Action for Childhood Arrivals (DACA) students. 

MPOWER Financing doesn’t require applicants to have a cosigner, an established credit history, or collateral. 

For international undergraduate students, you can borrow $2,001 to $25,000, with a $50,000 lifetime borrowing limit. The APR is 14.98%, but you can qualify for up to 1.5% in interest rate discounts, including: 

  • 0.50% automatic payment discount
  • 0.50% on-time payment discount
  • 0.50% graduation and employment discount

Both graduate and undergraduate loans require interest-only payments while you’re in school, and have 10-year repayment terms.