27/5/ · It is common trading term also known as position trading in which trader hold a commodity, stock or security for a long period of time with the expectancy that it will rise in This trading style is more geared towards investors rather than speculators. In today’s article, we will discuss whether long-term trading is possible in forex, what benefits and distinctive Long term trading, otherwise known as position trading, refers to a trading style in which the trader will hold on to a position for an extended period of time. A position trade can last Short-term Forex trading is more likely to produce higher winning ratios and profitability, while long-term forex trading provides a higher compounding effect. A dealing desk will give lower 10/10/ · What is Long Term Trading? Long term trading is known as trading style in stocks, Forex, futures, or any financial derivative markets. The time duration between entry ... read more
But makes much more sense betting higher time frame than lower, because of volatilty and more clear trend. If I would know something about the future I can bet on it, otherwise makes no sense.. Thank you, Nathan. You give me hope. I'm a newbie a real rookie. Nathan you are simply a God send. I v been struggling so much with my strategy and have lost quite a bundle but this gives me hope.
I am based in Nairobi Kenya and I want in on anything you can teach me just throw it my way coz am willing to learn. God bless Respected Fx GOD All makes sense. Was watching a setup on EURAUD which has now moved predictivaly south.
The reason I didn't take it though was because the pair had made a lower high back on Nov when I trade with the trend how should I consider these HL when looking to go short? Thanks for sharing your strategy, Nathan. It is simple and you explained it very well. It does demonstate that a simple strategy can be very effective and it highlights the importance of patience and money management. One of my major challenges in trading is patience and that can be very costly. I feel a strong urge to trade every time that I switch on my charts and I know that I am not alone.
I am gradually getting comfortable with trading longer term strategies and your reasoning and logic for favouring those give strong evidence that longer term strategies are the way to go. Hey Mike, glad you enjoyed the article! Yeah, you are definitely NOT alone I, too, struggle with be tempted to take a trade that does not fit my plan just because it "looks good" at that moment in time, but that is definitely not the profitable way to trade thanks again for reading and leaving a comment!
Hi Nathan, I agree with longer time frames and specifically days not hours, minutes or weeks. I my self only trade off day charts, and these are my reasons.
The broker is acting against you - he loses if you win, and he wins if you lose. This is in the fine print of all new accounts. A dealing desk will give lower spreads but will actively make you lose. Days are the 'natural' time frame for trading, where as hours or minutes or weeks are arbitrary units. Candles were always meant to be on days - from the earliest time in Japan this is how they started.
Days means you can plan trades at ease. I think these are compelling reasons to trade from day charts, so that's what I do. Joe PS. If you are interested, I just look for trends and jump on. I use pairs that naturally tend to trend for long distances such as the Euro crosses among others EURNZD etc I use MA8 and MA When the MAs are both rising, and the 8 is above the 12, I put a long entry just above the most recent high.
I trail along the MA8 until BE, then along the MA12 when it catches up. I raise the stop to below a candle that suggests the trend may have ended eg a pin bar against my trade. If it isn't taken out I wait for the MA12 to catch up and keep trailing. the opposite of all this for shorts No fib levels used. Pretty successful! Hey Joe, thanks for the great comment, I really appreciate you putting the time and effort into adding value to this post with a great, informative comment.
I don't believe I have ever heard anyone lay out the reasons for using the daily chart as you did, and that is very interesting.. I would love to learn more about your strategy, Perhaps you could write out a nice explanation of it like I did in this article and we could post it on the blog as a guest post by you.
I am sure our readers would love to get your perspective! will work on your longterm trades with this system with patience.
Will advise outcome down the road. Thanks Louis, I appreciate you taking the time to read and also leaving a comment. Let me know how you do using this strategy! Thanks for the information, I plan to start the new year with longer time frames and I was going to use 4 hour charts.
But now I will look at weekly and daily charts more. Thank you. Thanks for reading! I am glad this article may serve as a useful piece of information for you. Feel free to re-post here later on and let us know how your strategy is going using these longer time frames. Very nice post. Always thought 4hours was long term. My problem with long term as you presented is the fact that stops and loses are usually greater too.
Some people think the market is too volatile and unpredictable for you to stay too long in a trade but I'm sure all will agree your analysis is very correct.
Hey Tony, thanks for reading. I appreciate you taking time out of your day to read my article and leave a comment as well. Yeah, unfortunately, you can't really have the best of both worlds with high probability long term trades and still manage tight stops, but the best way to be profitable is to understand how to dial down your risk with smaller size trades and remain consistent even after losses. Using a long term strategy, like this one, takes a lot of patience but it can be very profitable if you stay disciplined.
This makes a lot of sense. It is entirely too easy to look only at a single time frame and ignore the larger picture. Hey Dave, Yeah I agree with you on that. I am definitely guilty of doing that very thing before for some reason it is tempting to get "caught up" in a smaller time frame--watching the price move--and not realizing that if you take a trade JUST based on that time frame, you may be ignoring the longer term picture.
Thanks for the comment, I think you are right on with the issue of ignoring the big picture! Hi Nathan, thanks for this great post I'm also a great fun of fibo retracement and it's been working very well for me also. Your strategy confirms that I'm doing something right Thank you Gilberto.
Hey Gil, that is great! Glad to hear you are having success using the fibs--they can definitely be a great tool if you use them the right way! Thanks so much for reading my article and leaving a comment, I very much appreciate it!
Great stuff Nathan, I have always believed in long term trading and this by far the best strategy I have come across' I intend to trade this strategy next year on bigger time frames. Awesome, Anthony! Thanks so much for taking the time to read and even trying the strategy; be sure to let me know how you do using this strategy! Sincerely David.
Hey David, thanks very much for reading and leaving a comment. I appreciate the compliment and look forward to a lot more good stuff next year! Hey Anthony, thanks for reading and thanks for the comment!
To determine the trend, I usually take a look at the weekly chart and take into account a year or so.. it depends on how long the current weekly trend goes back though, because if it has been trending for 3 years straight, then I will zoom out and take all of that into consideration. Very good article, Nathan! Yes, it is all valuable content.
It goes with my observation and certainly has the edges required for winning. Thanks for reading Sean! I appreciate you taking the time to leave a comment as well. I am very glad that you enjoyed the article!
Thanks Shivam, those are very kind words and I really appreciate you taking the time to read and leave a comment. Glad you enjoyed the article! HEY NATHAN, GOOD ARTICLE. AS FAR AS LONG TERM VS. WHEN I STARTED TRADING FOR A LIVING I THOUGHT DAY TRADERS WERE NUTS.
I TRADED LONG TERM AND GOT KILLED BLEW UP 2 ACCOUNTS. NOW I TRADE SYSTEMS USING 1HR, 15 MIN, 5 MIN AND 5 PIP RANGE BARS. THERE ARE THINGS YOU CAN PICK AND CHOOSE WHEN YOU TRADE, BUT YOU CAN'T IGNORE WHAT YOU ARE. Hey Roy, thanks for reading and leaving a valuable comment! Yes, I do agree that understanding your personality is a big part of trading. To me, it is amazing that anyone can be profitable on smaller time frames because the room for error is so minute, but that is certainly very impressive on your behalf!
Pretty good stuff Tracy U a good honest Guy Compared to all the crapp out there in the Forex arena! We appreciate u! Thanks Olu, I appreciate you taking the time to read and leave a comment, and am really glad that the article may be of use to you! Hi Nathan, To me, this is excellent stuff with precious tips and avices like going WITH the longer time frames trend, where to put stop-loss and target, avoiding entry if major level is too close from entry, I will definitely put that strategy into my trading plan!
What I love with you and Casey is your honesty and transparency not ONLY showing winners but clearly saying and showing that we will loose too! I am always amazed with the quality of your articles and the knowledge you already have at your young age. How good wil you be at 30 or 40!!! Just one very basic question: - how do you define and recognize a major level do you always look at candle charts only to spot it? Thanks so much for all your efforts in helping us trading with an edge. Hey Fabrice.
As always, thanks so much for your time and effort into learning and your constant appreciation--it means a lot to us. For me, candlesticks are definitely an important part of seeing levels.. One thing that speaks volumes to me are when there are repeated wicks of a candle that tried to pierce through a certain price level but continued to get rejected.
This shows me that price has made multiple attempts to move to a higher or lower price but kept getting pushed back by the level. When this happens over days and weeks on these longer time frames, I know that this is a big, important level.. Then, what I look to do, is pair that with another level.
For instance, if the major horizontal level also corresponds with a Fib from a recent swing or a current trend line, that adds even more value to the price level. Once I clearly identify these important levels, I just wait for price action to react to them and then attempt to take advantage of the reaction.
For me, candlesticks help me "see" price the best, but that definitely does not mean they are the only way to trade profitably--it is just my personal preference and you should have your own preference too! An interesting read and you are right about the benefits of long term trading and also how novice traders misunderstand what long term trading actually is.
I have some questions regarding the strategy. How often do you see the signal bar set up exactly like that say put of 20 retracements? How do you work out your risk?
How many times do you enter in on the trend as it progresses? What is the average number of pips you have taken using this strategy? Hi Zaheer, thanks for reading and leaving some feedback. Let me address your questions: 1. I typically use a risk of. In this strategy, I am not typically going to add to the trade if it does continue in the larger trend direction, because my target is going to be too short to use that methodology.
In order to make the strategy as high probability as possible, I am only targeting the "bounce" to the next major level which is not normally going to be far enough away for me to begin adding positions in my favor. The pip gain on the "bounce method" changes drastically depending on the pair and the largeness of the swing that you are using the fib retracement on.
Hope the above answers your questions appropriately. Thanks again for reading and leaving a comment! Thanks Imino, appreciate you taking a look and giving it a try--please let me know how successful you are using it. This step-by-step guide will show you an easy way to trade with the MACD indicator. Get the free guide by entering your email now! Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page. Long Term Trading Strategy for Forex by TradingStrategyGuides Last updated Nov 18, Forex Strategies 54 comments.
Long Term Trading Strategy for Forex There are many reasons why I believe a long term trading strategy will set you up for success. WEEKLY EUR-USD CHART. BUY SET UP ON EUR USD. WEEKLY CHART OF TREND. USD CAD DAILY FOREX CHART. TEST OF FIB LEVEL. David Gordon says:. June 3, at pm. martin ettenes says:. June 20, at pm. currencytrader says:. May 21, at am. Thomas Harvey says:.
March 13, at am. Phoebe Ejimbe says:. January 5, at am. Paul says:. In this article, we will analyze the long term forex trading strategy concept. In addition, we will give examples of how to build your long-term forex trading.
How to trade long term forex strategy and Plan an Effective Long-Term Forex Trading Strategy in ? In the forex world, it would be essential to have different trading strategies for the short term. Along with it, long term planning is equally essential. With the forex trading strategy for the long run, you aim towards larger prospective profits with minimal capital investments. Long term forex trading strategy is usually based on important daily and weekly price levels, COT report, fundamental news Industrial production, GDP, and major indicators , and technical trading patterns.
Entry positions need to have several triggers before execution. Now there is one important question. There are many intraday traders in the market these days, and long-term trading is not lucrative enough for most traders.
However, long-term traders have better winning ratio and risk-reward ratio and, on the other side, smaller trading costs. Long term forex trading is better for traders who rely on fundamental analysis and do not like to manage trades each hour or day.
Long term trading strategies give traders peace of mind, show better performance during strong trends, decrease trading cost. For example, a day trader can trade EURUSD, create trades with position size 1 mini lot during the year. Long term trader will create 30 trades per year, and he will have 10 times smaller cost. But this not all. At the end of March, we have mixed fundamental results for USD. Crisis because pandemic Covid 19 is a fundamental trigger for gold price rise. So, I choose to buy GOLD at the end of March But I waited to see price action above March month high:.
Recently we created the article Forex Weekly Strategy. Traders need general advice about How to Plan an Effective Long-Term Forex Trading Strategy because trading rules are not only important things. Traders need to see the bigger picture. The target has to break down the following. Fundamental analysis and long term system and COT report. The term would refer to proper tracking of commanding economy heights while known as fundamentals that would go along with the aforementioned idea.
Fundamentals would be things such as interest rates, employment, CPI, along politics. This depends on the involved currencies with the trade direction; you would also pay little interest or earn interest. If a country pays the ideal amount of interest, the world traders purchase currency against weak currencies while forming trends.
Interest rate, Industrial production, GDP, and current high important news are the most important information that I check before any new long term trade. For example, if I want to trade EURUSD, I need to know these important facts about the European Union and the US economy.
Daily chart and Fundamental analysis need to show the same direction of the trade before any trade execution. I like every Tuesday to check the COT report. How to use the COT report in forex trading? The COT report is most important in figuring out Reversals Type One or Reversal Type Two and using knowledge to assume the next long-term movement in the forex market.
What we can see in the COT report :. Try to see Reversals Type One — When the spread between commercial traders and large investors is big, then we should expect a market reversal. Reversal Type Two — When large traders start to reverse their positions i. In step 2, traders need to see the big picture using the weekly chart to get Long Term Forex Strategy. On the weekly chart, the trader needs to analyze important levels, last month and last year high and low, close prices, important Fib.
This would stop you from making uneducated guesswork. With a step back, you can minimize second-guessing.
by TradingStrategyGuides Last updated Nov 18, Forex Strategies 54 comments. There are many reasons why I believe a long term trading strategy will set you up for success. More so than using smaller time frames to trade, and I will get into several of those reasons within this article.
Here you can see a funny video about trading levels. I lay out a few of those reasons in a light-hearted tone in my Scalp vs Swing Article. This article has gotten a lot of attention. I believe that one of the big issues with Forex traders today is that they are so caught up in short-term trading and scalping. Which again, I really do have a hard time believing traders can be profitable with.
I am now using a long term strategy, trading the hourly charts. I think the above statement is one of the issues with Forex Traders today. And why so many have a lot of trouble being profitable.
Learning this type of trading is one way you can learn how to become a successful forex trader. For some reason, the majority of traders—especially beginners—are so bent on scalping. I know my friend, Zaheer , will agree with me on this one. Then, perhaps, using a lower time frame to actually execute the trade for more precision. Before I get into the actual strategy, I want to dig a little more into why the right perspective is important when it comes to trading long term strategies.
I know that many of you only care about the actual strategy guidelines, but I believe that the following information about perspective and a holistic approach is more important than the strategy guidelines. You can also read a million USD forex strategy. In the above chart, you see that there is a lot of bullish momentum moving toward higher highs.
From this perspective, it looks as though all bullish continuation set-ups will be great entries. You'll notice the bullish rally on the 4HR chart is just a pull-back rather than a raging trend as it appeared before.
Also, read the weekly trading strategy that will keep you sane. Not only is it a pullback, but it is a pullback heading into unsuspected resistance. If we move a little bit ahead in time, you can see a bearish bounce off the resistance level. To the trader viewing only the 4HR chart, this may look like a great time to buy again in anticipation of Bullish trend continuation.
What the 4HR trader may not realize is that this is not a pullback of the 4HR trend. Rather, it is a continuation of the Weekly trend. To the 4HR trader, this looks like an unexpected major reversal in the market. To a long term trader, it is an obvious and expected continuation of market flow. It looks like this in the Weekly view:. This is why it is so important to have a long term view of the market. Especially if you are going to call yourself a long term trader.
Again, so many people looking at 4HR charts think they are long term traders. But they are ignoring the real long term time frames. Ignoring this can get you into big trouble, just like in this real-life example.
Those two bearish weekly bars you see would crush someone trying to take long positions on the 4 Hour chart. Yet they are just part of the flow in the Weekly view. Now, I am not saying that you cannot trade profitably on the 4HR charts. I am saying that it is very difficult to make consistently profitable trades when you do not have a good perspective of the markets longer-term movement.
Especially when trying to trade an intermediate time frame like the 1 or 4 hour time frames. One major note about this strategy is that you must be disciplined if you want to succeed. Yes, you need to be disciplined with all strategies to expect success.
One of the biggest mistakes that unprofitable traders make is over-trading and over-managing their trades. As human beings, we have a desire for action and involvement. This tends to cause us to always want to have a trade open or always want to manipulate the trades we do have open. I can promise you that this will only lead to less and less profitability.
If you want to be successful using the long term strategy that I am presenting to you, you must accept that there will not be a ton of entries. Which is a good thing, in my opinion. Also, read about the best forex indicators. Look for trends on these longer-term charts that have good momentum in the respected direction.
Something like this:. Identify the direction of the trend bear or bull. Make a note to only look for entries in the direction of that trend for instance, if it is a bullish trend, look for buys. In other words, the criteria has lined up for you to make a trade, now all you need is the signal to confirm your forecast. For this strategy, the signal is a momentum daily bar in the direction of our long term trend.
An ideal daily signal candle will have a tail that has tested pierced through the Fib level, but then reversed back into the direction of the trend:. Trading is all about Math—a good strategy has winners and losers, but at the end of the year, the winners out-weigh the loser. They will in this strategy if you follow it with discipline! To help with the math, try the forex trading position size calculator tool.
Hope you guys enjoyed learning one of my favorite long term strategies. Please leave a comment with any feedback. Comment if you plan on trying the strategy or comment if you hate the strategy! So, please give this strategy a 5 star if you enjoyed it!
Trading Strategy Guides is offering a special discounted offer to our long term trading strategy. We specialize in teaching traders of all skill levels how to trade stocks, options, forex, cryptocurrencies, commodities, and more.
Our mission is to address the lack of good information for market traders and to simplify trading education by giving readers a detailed plan with step-by-step rules to follow. The trade shown, in my opinion, was not a solid trade.
The bullish pull back piercing the fib was only followed by a small bearish candle that wasn't full bodied. It's indecisive. If you wait for the full bodied decision candle going in the direction of the trend bearish here after piercing a major fib level you would not have entered until the 50 fib was pierced. That may have prevented you a loss on entering on any trend following candle with no substantial body decision by the market. You're providing great info here. keep it up. Enjoyed the writing and video's but will have to go over it again a few times as I am a newbie and using longterm for the fist time.
Thank you for the information, they are helpful and exciting. I think the reason most people try to scalp is they are taught to be scared of the market by teachers that are trading failures I agree with Nathan, the trader that is here for the long term is a swing trader the data that can be used is measured in volumes instead of snippets the next thing to get past is letting a profitable trade run and not being so scared of a loss you fail to maximize profits the one piece of advice I would give every trader is learn enough about Elliott Wave to distinguish the difference between motive waves and corrective waves and once you see the tell tale sign of one, know what the most likely out come of the next move is it a retrace or breakout, and how far is it expected to travel so I can set profit targets with no guess work and I can set stops that only trigger when I am proved to be wrong Good trading everyone.
Nathan, how do you deal with the swap rates with this longer term strategy? I trade this way but often have to close a trade due to the overnight swaps. What broker do you use? I am looking for a broker with competitive swap rates, I know some pairs have a positive value but I cant consider that when looking at the longer trends. Thanks, Tom. Thanks Nathan! An awesome strategy!
It is my favourite strategy. My problem is I lack the necessary patience it needs to be profitable. You wrote "Trading is all about Math—a good strategy has winners and losers, but at the end of the year, the winners out-weigh the losers. They will, in the strategy, if you follow it with discipline! Great write-up! Very encouraging! I am definitely going back to this strategy in Excellent strategy, I have been looking for a good simple long term strategy,this will free up my time and still allow me to be involved in trading.
Thanks very much 🙂. I totaly agree.
Long term trading, otherwise known as position trading, refers to a trading style in which the trader will hold on to a position for an extended period of time. A position trade can last Short-term Forex trading is more likely to produce higher winning ratios and profitability, while long-term forex trading provides a higher compounding effect. A dealing desk will give lower 10/10/ · What is Long Term Trading? Long term trading is known as trading style in stocks, Forex, futures, or any financial derivative markets. The time duration between entry 27/5/ · It is common trading term also known as position trading in which trader hold a commodity, stock or security for a long period of time with the expectancy that it will rise in This trading style is more geared towards investors rather than speculators. In today’s article, we will discuss whether long-term trading is possible in forex, what benefits and distinctive ... read more
The FX market is where currencies are traded. Most trading software already provides a daily accounting of trades. Joe says:. Hope the above answers your questions appropriately. Foreign exchange is the process of changing one currency into another for a variety of reasons, usually for commerce, trading, or tourism. They will, in the strategy, if you follow it with discipline! Leave a Reply Cancel reply Your email address will not be published.Thanks for sharing your strategy, Nathan. There are many intraday traders in the market these days, and long-term trading is not lucrative enough for most traders. The advantage for the trader is that futures contracts are standardized and cleared by a central authority. David Gordon says:. Are PAMM Accounts Safe?