Why long-term trading may be right?

Trading Forex is typically associated with a fast-pace high-volatility type of trading. In fact, in most cases it is. But not everyone has so much time or wants to spend it before a chart. And that is just fine. That is why trading long-term is still a valuable alternative.

Let’s presume you are just given your first steps in Forex. So you open a real account with $500 and after learning the basics, you understand you do not have enough time to spend on it. What do you do? Nope. You don’t cash out. You apply a long-term strategy. Simple: keep and hold.

The tricky thing about a keep-and-hold strategy is that you should really work hard to improve risk management to its best possible in order to not fall into badly executed orders.

In other words: if you open a position and set stop limits too close or too far of the price, then you could face an early close or extremely painful losses.

Trading long-term means setting long-term objectives. You have to focus on a larger picture. Work with wider timeframes, like 1 week, 1 month or even 1 year. All depending on what is your ability to read those charts and correctly forecast price action.

No matter if you are working as a daytrader or just intending to make a few extra bucks as a long-term trader, you cannot lose vision on your trading. However, as a long-term trader your control can take place not so often. For example, twice or once per week would be ideal.

In general terms, applying a long-term strategy would demand you to focus more on fundamental changes than technical ones. But knowing where key supports and resistances are placed will not hurt anybody. The more you know, the more you make. That rule never fails.

As for capital. Long-term trader requires a bit more than a day-to-day trading account. The reason is obvious. If your positions need space to move freely up and down for some time, then that space is call money, sometimes negative for you. Yes, I am taking about margin


Source link   Presented by Fort Financial Services

Is gold the best safe-haven asset?

From the thousand articles you read this week about the market, gold has been mentioned over and over again as a safe-haven asset. And yes, despite...

Bitcoin: a real investment?

The fact that you made a couple of bucks buying and selling Bitcoin doesn't make it a true investment. At least not for Warren Buffett, one of the world...

Habits that reduce your Forex risks

There are plenty of blogs out there. Some good, some not. And there are thousands of publications talking about risk management. While many...


A word on treasury yields

The yield of the benchmark 10-year Treasury note reached 3 percent in the previous session, a level not seen since January 2014. Gary Pollack, head of fixed-income...

Trading synthetic currency pairs

A synthetic cross currency pair refers to an artificial combination of currencies usually not available in the market. If you are taking your first steps in the Forex market...

Easy ways to avoid scammers in Forex

The Forex market is not a scam. In fact, it is an amazing place to make money. Unfortunately, dirty scammers (which operate not only in the Forex market...


Start paying attention to position size

When it comes to risk management, everything counts. And defining the right size for your position plays a key role in the equation. Intuitively...

Trading journal: should you keep one?

There are so many Forex blogs out there. Sometimes I think too many actually. But some of them are pretty useful (like ours, of course) and a common...

How to 'trade the news' in forex?

I am sure you've heard of it. The term 'trade the news' refers to those guys who would rather read newspapers all day instead of sitting...

  


Share it on:   or