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Easy Forex - Benefits Of Long-term Forex Trading Strategy
By Candy Lim
One of the main reasons why people are drawn to trading is because the volatility of the major currency pairs makes it possible to trade the markets on an intraday basis. Indeed many people generate some decent returns from day trading the markets, but in my opinion you should always focus on finding a profitable long-term trading system as well.
In relation to the markets, long-term generally refers to trades that last anything from a few hours up to a few days, weeks or months, and in my view if you use the 4 hour charts and upwards, then you are a long-term trader.
I always believe that if you only focus on short-term intraday trading methods, then you are taking undue risks and are missing out on lots of profitable trading opportunities. Of course it's possible to make money trading the 1, 5 and 15 minute charts, for example, and indeed I trade these time frames myself on occasions, but it's much easier to trade the longer time frames.
The reason why it's easier is simply because you avoid much of the random price movements that occur on these shorter time frames. Therefore trends are much more clearly defined and therefore easier to trade.
Furthermore the longer the time frame you use,
the greater profits you can make because the trends are obviously so much greater. If you wanted to you could easily make some decent profits trading EMA crossovers (such as the EMA (5) crossing the EMA (20)) on the weekly or monthly charts. The only drawback is that this requires a lot of patience and you need to use quite a large stop loss to allow the position to unwind, which may not be ideal for beginners.
However it is a very profitable way of trading the markets. I personally like to trade the 4 hour and daily charts to trade the major currency pairs. I use the daily chart to identify the current trend and then use the 4 hour chart to find opportunities to enter a position in the same direction as this trend.
This method works extremely well for me and I would recommend it to anyone. It's certainly a lot easier, and generally a lot more profitable, than trying to trade the 1 minute or 5 minute charts, for instance, which whipsaw all over the place.
So to sum up, even if you do like to trade the shorter time frames, I would still think about trying to find a longer term strategy that you can use as well because these longer time frames are so much easier to trade. Download your ebook @ http://tinyurl.com/n3ukqo now.
Candy is a Forex Trader cum Internet Marketer, passionate about the returns of trading Forex. You can go tinyurl.com/n3ukqo to get your
FREE Forex ebook now.
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