If trading is strategy long terme forex peace the only source of income for a person, and he is not able to constantly follow the monitor, one can come to the aid of automated trading systems. However, not all people trust the system which was not developed by them. A long-term approach to trading can become the solution here. Long-term Forex strategies are such trading strategies, in which transactions are made infrequently, and positions may be held for days, weeks and months.
It is worth noting that this kind of work is not suitable for all traders. A human temperament plays a key role here. People who use a long-term approach are often quiet, self-confident and prudent. To predict long-term trends in the foreign exchange market one is required to understand well the fundamental analysis and have the skills to determine trends.
In literature one can find recommendations for beginners regarding timeframes in the early stages of their trading career. The majority of the authors of publications on stock trading just recommend starting with long-term deals. But it’s probably works more with stock market and commodity futures. But one must have a substantial starting fund which could withstand various sharp market fluctuations to stand for the long-term strategy on the FOREX market. The truth could be found in comparison. In order to illustrate pros and cons of long-term strategies for the beginner we will use the comparative analysis.
Very low time spending: traders should occasionally follow the status of open positions and make adjustments if they are needed. No risks connected with the closing of positions on protective orders as a result of fluctuations in prices: long-term forex strategy involves the use of very distant protective stop orders. This fact negates the risk of accidental operation as a result of sharp volatility triggered by unexpected news release or market manipulation of different kind. The high profit: trading on long-term strategy, a trader can capture motion of hundreds or thousands points in length. Accuracy in identifying of trends: the trader uses daily and weekly charts of currency pairs.