Rule of Trends in the Forex Market. Every trader loves a good and strong trend. As traders, many of us like to make quick profits. Who doesn’t? The problem is that if we focus solely on achieving fast returns, we forget about a much more profitable strategy that is a long-term trend.
Let us first discuss the anatomy of a short-term trade. A short-term trade can take less than a minute and take about 20 minutes if you get lucky. A 20-minute trade should bring big profits. They are unusual trades and 1 to 5 minute trading is more common in day trading. As a trader, you need to make a decision in the second half to decide whether to enter short-term trading.
An expert trader will set the starting points, gains and losses as they enter the short-term trade. Most traders, however, set a stagnant loss, but do not make a profit out of their exit at will and often for happiness. If you are doing short-term trading, set exit points before entering the trade. You can always adjust as the trade progresses, but you will protect yourself from sudden setbacks and changes in market sentiment.
Many long term forex traders are often overlooked and misunderstood by many traders. For one reason or another, most Forex traders believe that most money is earned in the market and that maintaining positions overnight is not a good strategy. Well … that assumption is wrong. The forex market is very similar to the stock market in that aspect and those who trade long-term charts, use daily or weekly charts, have a better chance of earning the unbelievable.
The reason for this is that except for extraordinary events, the currencies are large gains and losses over a longer period of time and not within 30 minutes. If you look at the long chart of any currency pair, you will see that if you traded in the long term chart, you would be maximizing your profits. That is, in a currency with a high trend instead of a small day’s earnings, you would go for several days, weeks, and sometimes even months. I ask, where do you see the opportunity for greater returns?
I agree, long-term charts offer better opportunities to maximize your profits, but discipline and mindset need to be rehabilitated to stay in the trade for much longer.