Easy Ways to Implement Long-Term Trading Strategies
In long-term trading, a mature strategy is needed if you want to try it. Actually there are many ways that are used in long-term trading, one of which is to read the direction of the price trend with the help of indicators. Here is how to apply a long-term trading strategy that is quite easy to implement.
Viewing On Time Frame Weekly or Monthly
The first long-term strategy that can be used is to observe price behavior in weekly or monthly chart movements. Then, look for trends in certain currency pairs that have clear direction and momentum. Identify the direction of the trend, whether bullish or bearish. Then, look for momentum to determine the open position (OP) according to the direction of the trend.
Zoom in on the Daily Chart and Draw Fibonacci Retracement Lines
The important thing to note in this Fibonacci line is that the bottom part of the trend line must be drawn from left to right. If the price is rising, then the Fibonacci line can be drawn from the lowest point (support) to the highest point (resistance). On the other hand, when the trend is bearish, the Fibonacci line is drawn from the highest high to the lowest area.
Looking for Pullbacks on the Daily Time Frame.
Look for pullbacks on the Daily Time Frame which is approaching 38.2; 50.0; or 61.8 Fibbonacci levels. If the price gets closer to any of the 3 key Fibbonacci levels, get ready for entry/OP.
Looking for Candlestick Entry.
For this strategy, the signal is a long shadow candle in the direction of the trend. In a bearish scenario, an ideal confirmatory candle has an upper shadow longer than the body, and has tested the Fibonacci levels.
Place Take Profit And Stop Loss
Always use the ratio TP:SL = 3:1, at least 2:1. On the Weekly chart, draw a Horizontal Line support line in the Support Resistance area where the previous period candles bounced. Place the SL above the Resistance Line 1. If the price is able to break through the Support Line 1, lock the profit by moving the SL above the Line. If the price is able to break through the Support Line 2, lock the profit by moving the Stop Loss above the Line, and so on.
Wait for Profit or Loss.
At the time of trading, you will definitely experience profit and some can lose. Don't try to tamper with it. Just believe in the strategy and let the trade be a winner or a loser. Trading is all about calculations where a good strategy does make a profit and a loss.
The key is to make sure that the profits outweigh the losses. If the trader applies the strategy with discipline, the profit and loss ratio will be within a reasonable range, so that in the end the trader's account will remain profitable. One important note, traders must control their emotions and desire to enter the market if there is no signal. One of the biggest mistakes failed traders make is overtrading.
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