Most traders in the currency market prefer to earn inside the day. However, there are other types of trading that can be used to generate additional income. Today we are going to talk about a trade in which orders remain open for several weeks, months and even years. This is long-term trading. It has its own peculiarities that you need to know about before you open a deal.

If only technical analysis of the market can be enough for short-term trading, fundamental analysis is a priority in position trading.

Technical analysis is mainly used to make decisions about closing active orders. Let’s talk about it a little bit more.

Macroeconomic indicators

They are very important in long-term trading,
as they allow to form a forecast on the dynamics of the currency pair on
for a long period of time. In the process of analysis, special attention should be paid to
on the following statistics.

Before all else, these are the interest rates of the securities. If they’re going up,
the interest of foreign investors in this country is also growing. With the increase…
of investments, the demand for national currency is also growing. If the stakes go down, then
the interest of the investors will weaken. That could cause the course to fall.
of the country’s currency.

The important value for a position trader is the following
the rate of inflation. If consumer prices demonstrate
insignificant growth rates, this is what makes the goods produced in the country,
competitive. The demand for them is growing, which means the demand for
the currency of the country. High inflation, as a rule, leads to a decline in the exchange rate
currency.

Also in the process of analysis we should take into account the political and social situation in the country, the currency of which is supposed to be traded. If the situation in the country is unstable, it is extremely difficult to predict the dynamics of its currency rate. In this case, long-term trading can be very risky.

Technicals

In positional trading, the best thechanalysis instruments are the trend line, as well as significant levels (both support and resistance). They are used both to find the optimal entry to the market and to support open orders and lock in profits.

What concerns the indicators, the most popular tool for analyzing the market situation is Moving Average.

Long-term trading on the Forex market can become a source of large enough income for a trader. To do this, you should always be aware of the latest news regarding economic indicators and follow the rules of risk reduction.

Fyodorov’s Inga

04.03.2019