Are You A Long Term or Short Term Trader?

When new traders enter the forex market, they will need to set their goals and one thing they need to decide is whether they are a long or short term trader. Both of these have different strategies and different results. There are many different approaches to trading forex, so it is important to understand the difference between short and long term trading.

Short term trading will involve completing a trade is as little as a few minutes. The longest these trades last is typically a week. For short term traders, technical analysis is the common strategy since these are perfect for trading in volatile market conditions. Some traders think that short term trading will lower the risks and increase profits. This is not the case. Every forex trade has a risk regardless of the terms of the trade, but short term approaches to minimise these a bit. This form of trading is very popular with new traders since they will not have to stay in the market for a length of time. Short term trading includes Swing Trading and Day Trading.

Long term trading is just what it says, the trade will last for longer periods of time, anywhere from an hour to days. Long term traders will use technical and fundamental strategies and they have more flexibility than short term traders. This form of trading is often too overwhelming for new traders and they will avoid this at all costs. However, most of the successful forex traders will be long term traders, so this is a goal that new traders should set.

There are multiple ling term strategies that can be employed. One is Trend Following, which is the most common. With this, traders will focus on the price action and will not focus on branches. Here, traders will have to have a good grasp of fundamentals.

Long term trading is the most profitable and is a great choice for those that can invest the time and have the amount of knowledge requires. Many new traders are not willing to invest the time needed, so they turn to short term trading, With short term trading, there are risks and traders need to be very picky about the trades they choose since there is the danger of overtrading.

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