Friday, 26 January 2018
Why Long-Term Trading Might Be Right For You?
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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.
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