Pangmatagalang Estratehiya sa Forex Trading (Bahagi 4)

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Example of Long-Term Trading Strategy

What we discussed in the previous section is a general overview of how to trade Forex for a long term. Now, we are going to quote an example with a long-term strategy in detail.

Let's say that you want to trade the currency pairs related to the United States. You will be interested in recent political events that will likely have an impact on the USD, the US Dollar. Based on the information that you have and what you think about the likely results of these events, you will begin to consider which direction the USD is most likely to take.

If the probability of your expected outcome is high, you may start to think about opening a position in one of the USD pairs in the expected direction. This is where your long-term currency trading strategy begins.

We know that exchange rates are traded through two currencies that make up a currency pair and that is why you should consider the possible behavior of the second currency you will trade in a pair. The safest bet should take into account an expectation of the second currencys movement which will show the highest degree of stability no matter what might happen.

Let's say that the events that affect your decision are connected to the Middle East, you should analyze the relevant economies. In this case, you would see that Japan does not have tight trade deals with countries in this region. Also, you can see that the yens historical fluctuation rate is rather low, so you could see that a perfect pair for this trading would be the USD/JPY pair.

Once this is determined, you should check twice your expectations and record all known and expected events as well as their potential outcomes. Before entering into a position, you should have a clear and precise plan of your actions. This is how you develop long-term profits by trading Forex rates with a long-term investment.

How to Trade Forex in a Long Term？

When it comes to trading the Forex market and holding your positions for days in a row, there are a number of recommendations that come in handy .

Probably, the most useful recommendation we can offer you is not to let your emotions become part of your long-term trading activity. Feelings of greed, dread, and impatience can affect negatively your ability to make decisions and force you to make rash choices that you will most likely end up regretting.

Finding the balance between being able to stay calm while your trading earns additional pips, and potentially dealing with losing, is something that can be learned with experience. It can be difficult to get through a series of losses before a series of winning positions. However, it can also be difficult to realize that closing a position too early can cause you to miss out on a significant number of profitable pips.

In these cases, it is always better to stick to your trading strategy and have specific targets that you have set by yourself. You should not only predict the direction of the price movement, but also what the movement will be in terms of the pips. This is the best way to avoid second thoughts once a trading position has been opened.

(To be continued ...)

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