Selecting Long term or Short term Trading

Trading and buying currency known as forex (Foreign Exchange) is one business that is quite difficult but has a reward (potential profit) is quite tempting. In general there are two kinds of terms for the type of trade, which is long-term trading or often called Long term trading, and also trading in the short term called Short term trading.

Both types of trading have their own management strategies and ways. Many professional traders often say, "that one of the keys to success in financial markets is knowing what kind of trade suits you best." As it is roughly.

Here we will discuss the typical trading in forex trading.

Short-term or Short Term Trading is a typical type of trading that opens a position within a maximum period of 1 week. Broadly speaking, Short term or short term trading has little disadvantage, that is, we should have plenty of time to keep track of market movements over time, either within a day or several days of the week.

Typically, this short term type trader opens and closes the position in less than a week - or even a day. There is even a position open and close it for a few minutes only, this type of trader is often known as a scalper (using a minute time frame and 1 hour). Most Short Term traders also use H1 or H4 time frame basis to see the outline of the current trend.

As for the long term type is a typical trading that opened the position for weeks and even months. In forex trading we very rarely meet typical traders like this. In the same way with short term trading, Long term trading type also has a few drawbacks. That is, you have to be really patient when the market does not give signals. This will certainly take time just to wait for the signal from the market, but the advantage is that you do not need much time to keep an eye on the market.

If you are trying to use this type of short term trading type, it is expected you to have plenty of time to monitor market conditions. And type of short term type is likely to have a greater risk, because within a week will certainly open a lot of positions, so the opportunity for loss was also greater.

On the other hand, long term trading also has few constraints, namely the issue of capital magnitude. What we mean by capital is, because long term trading types are also likely to lose more than short term trading. This is because long term trading opens and closes positions in minimal weekly time. So when the losers, surely greater than the short term type of trading.

Actually there is still a lot of writing about these two types of trade, but we will not discuss it too specific in this paper. It should be emphasized again, that one of the keys of successful forex business is to recognize what type of trader you are. Or how you trade.

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