Forex (foreign exchange) is an interesting trading activity of buying and selling of currencies. It is very popular all over the world because foreign exchange trading is a profitable business. The most active currencies are U.S. dollar and Euro.
Before beginning your forex trading journey, you should understand the world of forex market very well. Learn the basic terminology, choose an experienced and skilled brokerage firm and create a forex account. Then start the trading activity. Is this enough? Not at all! You need to understand different ways and strategies of trading. Traders should always choose the trading technique which suits his/her personality.
Do you have any idea about forex positions?
Position trading is a style of trading in which trades are bought and held for a period. It is a flexible way of doing trading. There are long term trading and short term trading. Forex long term positions are the best.
Forex Long Term Positions:
Long term position means a trader buys a currency and expects it to rise in value. If a trader holds his open forex position for an extended period, the position becomes long position. They can hold the forex long term positions for many days, weeks, months and even years. Generally, long position traders do not have any plan of selling the currencies in near future.
It is the most profitable type of foreign exchange trading. Why? I am telling you this from my personal experience. I used to do short-term position trading earlier, and it was extremely stressful. I needed to check the currency rates changes in every minute. Besides, I had to take decisions as fast as possible. On the other hand, as a long term forex trader, I get enough time take any decision.
5 Tips for Long Position Traders
Check these strategies to be an efficient trader.
- Choose proper currencies to do forex trading. You have to do a lot of research on currencies. Get idea which currencies are making profits recently and which currencies are making losses. An easy way to do it is you can check the weekly charts of 15 biggest currency pairs every week.
- At first, decide the percentage you are going to risk in the process. You should take less than 1% risk.
- Watch whether the trade is in your favor or not. If it is in your favor, then wait for it to come back on the entry point. If it does not bounce back after coming back to the entry point within a few hours, then exit the trade.
- You should continue making the above-mentioned point till the trade meets an amount of profit which is double the hard stop loss.
- If the trade moves more in your favor, you should move the stop up under resistance. It should be suitable to your trade’s direction.
Keep these things in mind at the time of doing long term position trading forex. You will be able to make profits.