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Which trend should I look? The long term or short term?


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Forex Trading Strategies: Which trend should I look? The long term or short term?

 

FOREX TRADING STRATEGIES

I believe that this is one of the most important and mind buggling question that most traders face.

Forex trading strategies Example: Forex Pair Eur Chf

forextrend.gif

 

In the forex pair above, the overall trend is in a downtrend (marked by the red line)

But in the current movement it is in a short term uptrend (marked by the yellow circle)

So to say if you are in the current situation – which happens all the time.

Forex Trading Strategies -> How would you trade?

Forex Trading Strategies -> Would you trade up or down?

Forex Trading Strategies -> Would you trade with the main down trend or the short term up trend?

Forex Trading Strategies: Which trend should I look? The long term or short term?

 

Generally speaking, of course the bigger trend holds more weight right?

So should you still trade down?.. Not really..

Although it is the bigger trend that holds more weight, it is the short term current trend that depicts it’s movement.

The main question lies in what kind of trader are you.

- If you are the type who wants to trail for the long run. Then you should wait for the trend to turn back down and then trade down.

- If you are like me, who takes profits off the table with a reasonable risk reward ratio. Then we will trade the current short term trend.

Forex Trading Strategies: Which trend should I look? The long term or short term?

 

You see, although the long term is down. But you should NEVER trade against the current short term trend.

Because this short term may turn to a bigger trend. And this short term trend may be the indication of a trend reversal.

So, if you have a good profit taking strategy. The answer will be to trade the short term trend and not the long term trend.

But of course, the best scenario is that we have the long term and the short term trend in the same direction.

It happens, but it does not happen all the time.

So in scenarios like the above chart example. I hope you have gotten your answer!

I hope you have gain something from this quick forex trading strategies trade example.

If you find this post interesting, do comment on it!

 

Ezekiel Chew

Asia's #1 Forex Mentor

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  • 1 month later...

there will be always retracement in every trend movement. by know in which level the price will retrace, traders will able to make proper reaction. or for swing trader, maybe they will ignore retracement movement and keep stick with their previous position order. every decision taking rely on every traders trading style.

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  • 3 months later...

Limits that take account 1 lot with a play which can not be less than 10k or tissue. Exact with this gameplay Timing is a factor where is put forward, and at the same time the patient does not need to say that the player is Forex also not necessarily need to always look for profit in the market . So you should think carefully before signal of someone, you need to pay attention to how people play it to act correctly!

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  • 9 months later...

there will be always retracement in every trend movement. by know in which level the price will retrace, traders will able to make proper reaction. or for swing trader, maybe they will ignore retracement movement and keep stick with their previous position order. every decision taking rely on every traders trading style.

can say it in this trade after a trend there will be a movement that has a market reversal or retracement so that we can use Fibonacci to observe it in the trade and I used to use Fibonacci to observe the movement of the market in a trend reversal condition

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  • 2 months later...
  • 1 month later...

Analyzing from the higher time frame. There is more degree of accuracy when we see the major trend from a higher time frame than a lower one. Basically, the weekly or monthly chart makes you understand the market movement much better than analyzing from the daily chart.

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  • 3 weeks later...

improved possibility to make revenue if traders trade by future huge development. negligible pattern in little time-body could indicate that its just retrace. which doesn't last in depth simply because before prolonged sufficient, it could possibly back to your initial craze route Once more. 

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  • 2 months later...

If you do analysis its good to know if you are trading long term or short term base on the result of your analysis. I'm a long term trader. But if my analysis result shows that the trend is very volatile and theirs a lot of uncertainties then its best to shift to short term strategy until the market is predictable again.

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  • 4 months later...

Analyzing from the higher time frame. There is more degree of accuracy when we see the major trend from a higher time frame than a lower one. Basically, the weekly or monthly chart makes you understand the market movement much better than analyzing from the daily chart.

That is depend on your strategy too, i think you won't using D1 chart for scalping isn't it? For me long term is good with longer frame and short term trading is good with shorter time frame. Usually H4 called as the best frame since many traders find out that is possible to use it both short and long term.

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  • 1 year later...

It is true @ myregister: People tend to confuse this all but in fact if you want to choose you can. First of all strategy. What kind of strategy you have, long or short term. If you have long term then choose to see long trend term and vice versa if short term strategy such as scalping.

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  • 3 months later...

Long term is pretty nice to be honest, but it is quite hard since we need more and more place to reserved for the case if something is going wrong, short term has smaller profit to grab later, but still you can reduce the risk if you trade it right, and i don't talk about scalping here.

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  • 3 months later...

All depend on the circumstances, it seems that people are trying to choose which is more suitable for them, but if you want more profit choose both and depend on the circumstances. If the circumstances allow then look for long term if not then choose short term. No matter how small or big your profit as long as you make profit you'll be fine.

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Analyzing from the higher time frame. There is more degree of accuracy when we see the major trend from a higher time frame than a lower one. Basically, the weekly or monthly chart makes you understand the market movement much better than analyzing from the daily chart.

I don't think that will always work. I only find that  higher frame is seducing because it gives me the view of longer term trading where the price could move bigger than what i expected before. It is around hundred pips per 4 hours or even in one day it could be more. I don't care about this naming, but i think that my current analysis only good with short term.

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  • 5 years later...

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