In Forex, short-term as well as long-term trading come with their own set of advantages and disadvantages. How you boost profit and bring down the risk is something that is decided on the basis of your market understanding and your approach. Visit award winner broker
Let’s address the big question first, what should you pick: short-term or long-term Forex trading?
Well, there is no one set answer for this.
Though a long position in Forex has a greater winning ratio and profitability, a short position on the other hand comes with a better compounding effect.
What is definite is the fact that there is a particular specific trading strategy that works well with every individual trader’s risk appetite and personality type. You could choose short-term trading over long-term trading or vice versa.
Short term trading
Short-term trading stands for a trading style in stock, forex, futures, or any financial derivatives markets in which the time of trading between entry and exit position could be from a few seconds to a few weeks. Short-term trading in the day session is known as day trading or intraday trading.
Long term trading
Long-term trading stands for a trading style in stock, forex, futures, or any financial derivatives markets. In this type of trading, the duration of trading between entry and exit positions could be from a few weeks to a few months or even some years. To put it simply, long-term trading or position trading is about trades that may be open for days, weeks, months, or years.
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Advantages of short-term trading
- Earning a profit is quick
A trade could be realized in a few hours or days. In a single day, you may earn profit from the positions you enter and exit.
- More earning potential
There are several opportunities to capture every swing when there is a shift in the currency rates. Remember that these rates can be very volatile.
- Risk in your capital is minimised
When you figure that you’ve not made the right move, you may choose to close a position so your capital is freed and you can invest it in another, more profitable trade. Your margin capital is sealed away for a relatively small period.
Benefits of long-term trading
1. Saves you time
You purchase a single pair at a time only to hold onto it for a considerable period of time. You’re essentially in and out of the market in a matter of a few minutes or hours. There’s no need for you to keep looking for new opportunities daily either.
- 2. Less Stressful
The reason behind this is that there is no need for you to keep an eye on the market or charts. In between purchasing and selling, you could carry out thorough research prior to your following trading decision. buy crypto
- 3. More profitable opportunities
Given that you would not have to cash out quickly, you could stay close to the winners and make the most of them. As you would not have to stay glued to your monitors, you can also have a full-time job and trade simultaneously.