This article looks at the buy and hold trading that you can do on the foreign exchange Singapore.
When you look at trading on the foreign exchange Singapore you should consider all the ways that you can trade. One of the ways that you can trade on this market is through buy and hold trading. This is a long-term trading technique that many people assume has died. The truth is that many traders still make their profits from this kind of trading. It is important that you know about the trading that you are going to be doing as well as the benefits and drawbacks.
Using Buy and Hold Trading on the Foreign Exchange Singapore
The use of buy and hold trading is the primary strategy that long-term traders use. To complete this trading you are going to look for a long-term trend in the market. This should be done with the use of long-term trading charts and high impact news. The high impact news is the event that will cause the long-term directional movement on the market.
Once you have determined what the directional movement is you are going to place a trade accordingly. It is important that you have the capital needed to buffer the fluctuations in the market. Long-term trends are made up of shorter trends and retracements. This means that you are going to go through loss periods with your long-term trade. When the long-term trend starts to falter you should look at closing the trade.
The Benefits of Long-Term Trading
There are a lot of benefits that you can get from buy and hold trading. The first is that you are going to be opening fewer trades. This means that you do not have to worry about over trading or the negative complications that come from this.
Another benefit is the buy and hold trading is considered to be low maintenance. As you do not have to constantly keep an eye on the trade you lower the maintenance you have to complete. The buy and hold trader is able to look at the trade that they have once a day to ensure that it is still on the right track.
The last benefit that you should consider is the fact that you can earn extra income from the combination of buy and hold trading and carry trading. As you are going to be holding your trade open overnight anyway, there is no reason why you should not take advantage of the rollover interest that you can make with the carry trade.
The Drawbacks of Buy and Hold Trading
There are some drawbacks to buy and hold trading that you need to know about. The first is that the long-term timeframe is not the right one for all traders. There are many people who are not comfortable with the idea of holding a position open overnight. If you are one of these traders then you will not be able to complete long-term trading effectively.
Another drawback is that you increase your risk exposure with buy and hold trading. While long-term trading is considered to be lower in risk in general the longer you have a trade open the more exposure risk you face.