Long Term and Short Term Forex Trading

long term short term trading

When it comes to trading in the forex market, know that there are two types. They are none other than:

  • long-term trading
  • short-term trading

We understand that there might be forex beginners out there, so to give you guys a better idea, this is the definition of long-term trading. Investopedia defines it as ‘holding an asset for an extended period of time. Depending on the type of security, a long-term asset can be held for as little as one year or for as long as 30 years or more.’ Most traders generally prefer long-term over short-term trading. It’s very often mentioned that long-term trading has more benefits such as the prospective to be more moneymaking. It’s bankable. Over and above that, long-term forex trading is also known to bestow more risk control. It is also untroubled for forex newbies to learn and get established with the trading strategies.

What’s short-term trading, then?

We honestly couldn’t explain it better than Investopedia. The website states that short-term trading is exactly what its name suggest:  holding an asset for short period of time. Short-time forex traders are usually people who do it as a full-time job. This is because short-time trading requires a lot of time investment. The success formula for this is to have a lot of time and a big commitment. While it is definitely a lot riskier than long-term trading, it is well known to be profitable. In a nut shell, those who wish to participate in short-term forex trading should have insanely good money management.

What Type of Forex Traders are Suited for Long-term?

On the other hand, long-term forex traders are connected with the stock market. This suits well for people who already have full-time jobs. If you think about it, these people are sort of like the jack and jill of all trades. Since long-term trade requires investors to hold on their stock for at least a year, these traders need not spend the time to worry about the stock prices. It doesn’t require a lot of attention, unlike short-term trade.

 

In the Long Run

Different people have different types of choices and likes. It is highly suggested to pick a trading strategy that best suits your personality. Most importantly, pick a strategy that meets your investing needs. Do you have a family? Do you have a full-time job? Or do you want to pursue a career in the forex market full time?

 

 

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