There are two types of strategy in Forex. One of the short-term strategy and the other is the long-term strategy. In the short-term strategy, you will have to be an excellent trader. You will not have any second chances and you have to close your trades as soon as you can. Only the crazy genius traders can it successful when they are trading with short-term strategies. Some of the examples of short-term strategies that are used by traders in this industry are scalping and day trading. Scalping is like placing your trades for a minute and closing it in the next minutes. It may sound impossible to you but this is what the scalpers have been doing for years. Not everybody can become a scalper in this industry.
You have to know the trends form the roots and you need to have a clear understanding of the market trends. If you think scalping is a too short-term strategy, there is also another strategy called the day trading. It is only a longer form of scalping where traders would close their trades within a day. They do not take their trades on the next day and this is how they make their money. The other strategy that is used by the traders is the long-term strategy. These are the strategies that will take a test of your patience and you will have to wait for weeks and even months to get your profits. Traders are confused what kind of strategy is best for their profit and they choose the short-term strategy thinking it will give them profit in short time. This article will tell you why long-term strategy is also good for making money.
Those who trade the market in the 5 minute or 15-minute time frame have to face frequent losing trades. The quality of the trade setup generated in the lower time is very poor. In fact, you can’t even aim for high risk-reward trades by using short-term trading strategy. Before you open your Forex trading account, make sure you are determined to become a long-term trader. The long-term traders are often considered as the safest investors in the retail trading industry. Unless you know the proper way to protect your investment from the wild swings of the Forex market, you are not going to become a profitable trader.
The first benefit that you get as a long-term trader is you do not take the hit of the volatility. It is always the scalpers and the day traders and the other short-term strategy traders who take this hit. They place their trades and as they need to close within timeframes, they have to accept the losses if the trend becomes volatile. In long-term strategy, you are safe from it. You can keep your trades open on the market for many days and even weeks and wait for the trend to get normal. Professional traders like the long-term strategies because they get to make money with no volatility.
As you do not close the trades within days, you get much longer time than the other traders. You can also let your profit run. You may think this is taking a long time but the benefits you get will give you the chance to make a big profit. You only need the patience to become successful with the long-term strategy.
If you look how this market is changing over the time, the long-term strategy is best for you. It will tell you how this industry has changed and will give you a full-scale image of the market. This is not possible to get in short-term strategy.
Marina Pal is a renowned author and social media enthusiast.