It took price one hour to reach the take profit. And I have one very similar to this strategy. But, what do you do when the triangle appears on the monthly chart? The most successful long term trading traders have their own view on the market. A great entry is when the price reaches the a-c trend line. More often than not, the traders who make the money are those who are adept at anticipating such a breakout before it happens. If using leverage, you can lose more than your initial deposit.
Real trading, especially big picture trading, can be boring and slow. Many traders are brought in and told to trade fast and leveraged, and that is why there are so many failed forex traders. Big picture trading is about taking everything into account and making an informed decision.
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In fact, they are similar to short term ones. A common target is fifty percent of the wedge in less than half of the time it took to form. Traders enter on the trend line break. Traders take several steps to trade it. First, they sell the trend line break.
Second, they set the stop loss at the highs. Finally, the take profit at fifty percent the distance. Traders took the same steps. First, selling the trend line break. Second, setting the stop loss. Only this time, it took price almost four months to hit the target. Long term trading strategies are identical to short term ones. We explained so far what differs. The time for a trade. Therefore, anything traders use in swing trading, scalping, day trading, and so on, can be used in position trading.
Such triangles appear on all time frames. A great entry is when the price reaches the a-c trend line. As such, traders go in the opposite direction. After all, the b-d trend line must break. But, what do you do when the triangle appears on the monthly chart?
Position trading strategies like the one below are the same, as long as the pattern respects the rules. Any trade derived from it is long term trading. Monthly and weekly time frames are the home of long term trading strategies. Next, the b-d trend line is in focus. But, position trading Forex needs more time for such a break.
Think of it for a change. Traders around the world speculate on this. They move capital from country to country, region to region, in search for the best yield. The first reaction always appears on the Forex market. The two currencies in a pair will show the economic differences between their economies. Hence, a trading opportunity arises. A fundamental change takes time. Or, they build one. As such, they split the invested amount. And enter in a trade in different places. When monetary policy changes, the value of a currency changes too.
Long term trading Forex implies understanding macroeconomics. And this, in turn, implies understanding how to interpret an economy. Economic news moves the market. But, rarely just a piece of economic news is the reason for position trading. Long term trading positioning is the result of interpreting all the economic news. Moreover, traders put the info together to find a new trend.
Central banks meet regularly to check the state of the economy. If the economy improves or expands, the central bank will send hawkish signals. It shows changes in monetary policy. Therefore, long term trading strategies derive from such changes.
In , a terrible financial crisis crippled the world. It started in the United States and spread all over the world. Central banks around the world followed suit. Moreover, some were even more aggressive. They cut rates into negative territory. As such, investors in search for higher yields looked for alternative options. The stock market proved to be the right place to go. Position trading was caused by changes in monetary policy. The same is valid for long termforex trading strategies.
Besides this, long term trading traders need a big account. For trades to have an impact, the trading size must be big. Long term trading strategies may end up in several hundred or even thousands of pips profit.
In fact, all markets move in cycles. It must face small trends against the general position trading direction. However, if you like reading about financial news around the world, long term trading will come consequently.
It is impossible not to be tempted to apply long term trading strategies on economic differences you know. But the reality tells us that most retail traders engaged in long term trading strategies do that for a different reason. They check the monthly, weekly and daily charts. They read about what happened and the major monetary policy changes. It shows the ability to spot the right direction. And, to stick with it. The most successful long term trading traders have their own view on the market.
They like interpreting the news. Moreover, they put their money on the line. Because the views imply a bigger picture, the account is big as well. During his bachelor and master programs, Damyan has been working in the area of financial markets as a Market Analyst and Forex Writer. He is the author of thousands of educational and analytical articles for traders.
When being in bachelor school, he represented his university in the National Forex Trading Competition for students in Bulgaria and got the first place among other traders. For short term retail traders, this presents significant challenges as markets are usually choppy around the time of news releases and there is a likelihood of slippages as well as high spread on underlying currency pairs.
The major trading costs in forex are spreads. This is the cost of opening any trade in the market. This particularly affects short term traders who open multiple trades during the day. For long term traders, spreads are almost negligent as they incur the cost only once for trades that run for a long period of time. Admittedly, long term trades can also attract other costs, such as rollover and swap, but these are minimal and can sometimes be in the positive.
For short term traders, trade management is fundamentally unfeasible due to short stop losses and take-profits as well as high volatility. Long term traders can adjust their trades to react to new economic data releases, new technical setups as well as to new opportunities.
There is sufficient space to add to positions that are doing well so as to maximize profitability; as well as to cut or reduce overall exposure to trades so as to limit trading risks. Real money is on the line when trading in the forex market, so naturally, human emotions are bound to come into play. Emotions range from fear and greed to overconfidence and trading bias.
Filed under Blog by James Woolley. Looks like a great method for long term trading - certainly if it can pick up the big moves I am definitely going to have a play with it to see how it performs One question for you: Is it part of a trading platform?
The following link has some places where you can download it:. James, huge thanks for sending me the links I shall look into this method, as on first glance it looks great, and in an area I would like to concentrate long term trend trading.
I'm a fan of long term trading systems for forex. And I have one very similar to this strategy. Although it uses a different set of indicators, it relies on the weekly charts just the same. Thanks for this strategy. Will certainly try it. Free automated trading service that allows you to trade the signals of over , different signal providers.
Once you've chosen your providers, the signals are then executed automatically in your account. Free demo accounts are available for testing purposes. This service provides live trading signals on the daily, weekly and monthly time frames of over , symbols, including all of the forex pairs as well as stocks, indices, currencies and commodities.
Long Term Trading Advantages
Long-Term Forex Trading Strategies Many interested in trading currencies online opt for day trading, drawn by its excitement and profit potential. However, positional traders, also known as long-term Forex traders, are more likely to generate larger profits. 3 Long Term Forex Trading Strategies for Consistent Profits. Many traders make trades several times a week, or even several times a day, but one style of trading that is often overlooked is long term trading. Long-term trading systems can be just as profitable, if not more profitable than short-term trading. Overall, forex is not designed for any one particular strategy (long term or short term); it is simply just a market. Any timeframe or strategy depends on the personality of the trader, but the consensus is that long term strategies give traders peace of mind and promote objective trading activity.