LONG-TERM FOREX STRATEGIES02 / March / 2020
Long-term Forex strategies are trading systems that are used by traders who prefer long-term trading to increase efficiency over long periods of time.
Methods of long-term trading can be very different, each of them implies its own disadvantages and advantages, but always meets one requirement - it is trading at large intervals and for a long period (from a week or more)!
In order to increase the profitability of the work and to understand all the intricacies, it is advisable not to try all the strategies at once, but to dwell on several and test them thoroughly before starting trading.
Regardless of which method a trader uses, whether it is a daily strategy or advisers for the D1 interval, first you need to make sure their work is correct, there are no errors in the algorithm, stability and no false signals. Only then can the strategy be used directly in the trade.
Any trading strategy over long intervals is characterized by such advantages as:
true predictability of trends;
higher stability on large timeframes (as opposed to trading with an hour or minute interval).
Trading on the daily interval, weekly, monthly using such strategies allows you to more clearly consider the trend.
Long-term strategies provide higher returns than short-term ones, as a significant price change is observed over long periods of time. Its spread can be hundreds of points, and with the right choice of the direction of the transaction, with the correct prediction of the trend movement, the trader can hope for big profits.
In case of using long-term strategies, the trader may not have to carry out careful minute-by-minute control over the transaction, which frees up time for analysis and forecasting.
Such trading is relevant for those who cannot make decisions quickly, often hesitate, and under the influence of a momentary moment, make rash actions.
Unlike scalper trading, the use of systems for a long interval involves the transaction time usually up to several months, so the trader always has time to think about the need to close or open a transaction.
An important advantage of long-term trading is the invulnerability of open transactions even in the case of high volatility of a particular currency pair, since in long-term trading, as a rule, stop-losses are placed far and a little noise will not knock your position out of the market.
All this makes long-term trading an ideal choice for both experienced and novice traders, but before you start working, you need to study the disadvantages of this tactic:
In the case of loss-making transactions, the risks of losses due to the high price difference are relatively high;
If the trend reverses and the price reaches the stop loss level, the loss on the deposit can be noticeable;
In addition, the profitability of the transaction can be reduced by the commission that is charged by brokers for transferring the position. With large timeframes, its value is often considerable.
That is why if you have a small deposit, it is better to use cent forex accounts.
To trade at large time intervals, the trader must have a sufficiently large deposit exceeding margin by an order of magnitude. This is necessary so that the transaction can successfully withstand sharp speculative fluctuations in the exchange rate, often reaching 1000 points. All this suggests that long-term trading is most often suitable for experienced traders who have enough money to make serious transactions, are able to correctly predict future currency movements, expect profits and close deals on time.
In addition, it is worth remembering certain psychological difficulties, which also makes the use of long-term strategies difficult for beginners. Having opened a deal, one often has to wait a very long time until it brings the desired profit. A long wait for the result, a serious psychological burden when the transaction is in the loss zone for a long time can lead to the trader's inability to wait and soberly assess the situation.
Long-term trading systems require serious knowledge and the ability to use them; they suggest determining the right balance between the level of risk and the amount of investment expected profit. Only with the right calculation and careful planning can a trader count on high profits.