Trading as Long Term Investment
Do you happened to have a 8am-5pm day-job? Are you too busy with your fulltime job and doesn’t have enough time for yourself? Do want to invest without having to take too much of your time? Worry not because i have the answer to your problem. Trading as a long-term investment strategy. It’s often referred to as “swing trading” or “position trading”. Furthermore, it involves holding positions for a period of time. Moreover, it extends beyond typical day trading but is shorter than the buy-and-hold approach of traditional long-term investing. Here are some key points to consider if you’re interested in using trading as a long-term investment strategy.
Time Horizon
Long-term trading typically involves holding positions for several days, weeks, or even months, as opposed to day trading, where positions are usually closed within the same trading day. With a long time horizon, you can monitor the market anytime and anywhere without restrictions.
Market Analysis
Similar to shorter-term trading, you must perform technical and fundamental analysis to identify potential trading opportunities. Long-term traders may focus more on higher time frames, such as daily or weekly charts. Analyzing the market with a mix of technical and fundamental analysis is ideal and recommended since you anticipate massive movements on the chart, primarily if you use daily and weekly charts.
Emotional Discipline and Patience
Like any trading strategy, emotional discipline is crucial. Follow your trading strategy and refrain from acting quickly or based solely on emotions. Long-term trading requires patience. It would help if you allowed trades to develop over time, resisting the urge to exit prematurely due to short-term price fluctuations.
Monitoring
While long-term trading doesn’t require the constant monitoring of day trading, you should still keep an eye on your positions and the markets to stay informed about significant developments. The best thing about being a long-term trader is that you can view the chart anytime and anywhere without any pressure. Since your position’s stoploss is usually wide, there’s no need to be fearful that if the market goes against your speculated analysis, there might be a chance that your position will become a winning trade.
Trend Following
Many long-term traders adopt trend-following strategies, where they identify and ride trends in the market. This involves entering trades in the direction of the prevailing trend. Also, you can incorporate this trend following becoming a swing trader by just riding the short trending swings in the market. Using that, you can monitor multiple market instruments simultaneously and then wait for the right opportunity to right the trend. Becoming a trend follower trade is an excellent opportunity to develop patience since the market will teach you how to wait.
Thing to Remember
Remember that even with a longer time horizon, trading involves risk, and profit is not guaranteed. Successful long-term trading requires skill, knowledge, patience, and the ability to adapt to changing market conditions. Before embarking on this strategy, it’s recommended to practice with a demo account and seek out educational resources to build a strong foundatio
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