Long Term Time Frame
How to Trade Long Term Time Frames (Long Term)
For trading in long timeframes, the most efficient principle for a strategy is “the simpler, the better”. The simplest and most profitable strategy is always the basic “trendline breakout” or “trend reversal” strategy. It is only important that the trader must adhere to the rules of this strategy. The rules mostly refer to the identification of entry and exit points.
This is easy, the trader expects the price to cross the trendline, exit the price channel, and the trader places a pending order. In certain cases, this is a sell order, Sell Stop. The trader places it at the previous trend low, which was marked before the trendline was broken; That's the green Sell line in the picture.
The level for fixing the trader's profit or Take Profit is set at the first low of the previous trend; it is the pink line Take Profit 1. This is one of the possible levels to improve profit. There are several others, but they are much lower, according to the chart, and it makes no sense to base them before the first target is reached.
Traders also need to limit the trader's possible losses, set a Stop Loss, Stop Loss brown line. As can be seen clearly on the chart, the expected profit and risk are roughly the same, around 6500 points. This is enough to prevent the trader's stop loss from being triggered (hit) due to market noise and high volatility. Even if a stop loss is successfully triggered, it is the result of a global change in the market situation, which doesn't happen very often.
If everything goes according to plan, the price will move
towards take profit without any jumps that can affect the emotional balance of
the trader and the profit target, calculated in advance, will not cause
excessive fear or greed. Simply put, there is no strong swing, there is no
reason to worry.
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