Long-term Investment Strategies For Profitable Forex Trading In Singapore

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Long-term Investment Strategies For Profitable Forex Trading In Singapore – Getting started in the forex market often results in a life cycle involving deep dives first. Give up or fall back on further research. And open a demo account to practice. New traders may then feel more confident opening a real account again. achieve more and break even or make a profit That is why it is important to create a framework for trading in the forex market. which we have summarized below.

Why do we focus on medium-term forex trading rather than long-term or short-term strategies? to answer that question Take a look at the following comparison table:

Long-term Investment Strategies For Profitable Forex Trading In Singapore

Long-term Investment Strategies For Profitable Forex Trading In Singapore

Traders who want to open and close trades in minutes Always take advantage of small price movements with a lot of leverage.

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Large capital requirements and/or risk due to large amounts of leverage required to profit from small movements. And spread cost is more important.

In general A trader wants to hold a position for a day or more. They often take advantage of opportunistic technical situations.

Now, you will notice that both short-term and long-term traders need a lot of capital. The first type must be used to create sufficient leverage. and another type to cover volatility. Although both these types of traders are available in the market. But it is comprised of high net worth individuals. asset manager or large institutional investors for these reasons Retailers are therefore most likely to succeed using medium-term strategies.

The framework discussed in this article focuses on one key concept: odds trading. To do this We will consider various techniques. in various time frames To determine whether the trades obtained are worth it or not. However, please note that this is not intended as a mechanical/automated trading system. It’s rather a decision-making system. You may choose to follow the signals you notice or dismiss them. It is important to find a situation where all technical signals All (or most) of them point in the same direction. These high probability trading scenarios It is generally profitable.

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We will be using a free program called MetaTrader to illustrate this trading strategy. However, many other similar programs can be used that produce the same results. There are two basic trading program requirements:

Now let’s look at how to set up this strategy in your trading program of choice. We will also define a set of technical indicators with their corresponding rules. These technical indicators are used as filters for your trading.

If you choose to use more indicators than those shown here You will create a more reliable system that will generate fewer trading opportunities. On the other hand, if you choose fewer indicators than those shown here. You will create a less reliable system which will create more trading opportunities. Here are the settings we will use for this article:

Long-term Investment Strategies For Profitable Forex Trading In Singapore

Now you will want to include the use of some subjective criteria such as:

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The key to finding entry points is to look for times when all indicators point in the same direction. The signals of each time frame should support the timing and direction of the trade. There are some positive and negative starting points:

It’s a good idea to lay out the points. (both stop loss and take profit) before taking the trade. These points should be placed at key levels and only corrected when there is a change in your trading location. These exit points can be placed at key levels, including:

Let’s take a look at a few examples of each chart using a combination of indicators to find specific entry and exit points. Make sure any trades What you intend to do is supported on all three time frames.

Figure 2: A screen showing multiple indicators pointing in the same direction. Image via Sabrina Jiang © 2021.

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In Figure 2 above, we can see that many indicators point in the same direction. There are bearish head and shoulders patterns, MACD, Fibonacci resistance and bearish EMA crossovers (5 and 10 days). We also see Fibonacci support as a good exit point. This trade is good for 50 pips and takes place in less than two days.

In Figure 3 above, we can see many indicators pointing to buy positions. We have bull engulfing support, Fibonacci support and 100-day SMA support. Once again we see a Fibonacci resistance level which is a great exit point. This trade is good for almost 200 pips in just a few weeks. Please note that we can divide this trade into smaller trades. on the hourly chart

Money management is the key to success in any market. Especially in the volatile Forex market. Many times, fundamentals can send currency rates swinging in one direction. Only to make the rate change in the other direction in just a few minutes. Therefore, it is important to limit your drawbacks by using stop-losses and trading only when your indicator points to good opportunities.

Long-term Investment Strategies For Profitable Forex Trading In Singapore

Anyone can make money in the Forex market. But it takes patience and following a well-defined strategy. Therefore, it is important to trade forex first using a conservative medium-term strategy. So you can avoid the big players and become the losers of this market.

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It does not provide tax, investment or financial advice and services. Information is presented regardless of investment objectives. risk acceptance or the financial situation of a particular investor and may not be suitable for all investors Past performance is not indicative of future results. Investing is risky. This includes the possible loss of principal.

The offers listed in this table are from paid partners. This offset may affect how and where items appear. Not all offers available on the market are included. Some currency traders are extremely patient and prefer to wait for the perfect setup. while others want to see the movement happen quickly otherwise they will abandon their position. These impatient spirits create perfect momentum traders. Because they wait for the market to be strong enough to push the currency in the direction they want and hog back the momentum in hopes of an extension.

However, when the movement showed signs of losing strength, Impatient momentum traders will be the first to jump ship, so true momentum strategies require clear exit rules to protect profits. While still being able to drive as many extensions as possible, the 5-minute Momo strategy does just that.

Five Minute Momo looks for momentum or “Momo” bombs on very short (five minute) charts. First, the trader places on two technical indicators that come with many charting software and platforms: the Expo moving average. 20-period EMA and Moving Average Convergence Divergence (MACD). The EMA is selected above the simple moving average. because it gives a higher weight in the last move which is essential for fast momentum trading.

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While moving averages are used to help determine trends, the MACD histogram, which helps us measure momentum, is used as a second indicator. The settings for the MACD histogram are the defaults used in most charting platforms: EMA = 12, Second EMA = 26, Signal Line EMA = 9, all using closing prices.

This strategy waits for a reversal. Instead, it takes advantage of setups when momentum supports the reversal enough to create a larger extension. Positions are issued in two separate parts. The first half helped us lock in profits and ensure we didn’t turn winners into losers. And the second half allows us to try to catch what could turn out to be a big move without the risk. This is because the stop has been moved to the break even point. Here’s how it works:

Our first example above was EUR/USD on March 16, 2006, when we saw the price moving above the 20-period EMA as the MACD histogram crossed above the zero line. Although there were instances where the price attempted to move above the 20 EMA between 1:30 PM and 2 PM ET, the trade was not triggered at that moment as the MACD histogram was below the line. center

Long-term Investment Strategies For Profitable Forex Trading In Singapore

We wait for the MACD histogram to cross the zero line. and when so The trade takes place at 1.2044, we enter at 1.2046 + 10 pips = 1.2056, stop at 1.2046 – 20 pips = 1.2026, our first target is 1.2056 + 30 pips = 1.2084, about two and a half hours later. We exited half of the position and followed the remaining half with a 20-period EMA minus 15 pips, closing the second half at 13:2157 at 9:35 PM ET for a total profit on the trade of 65.5 pips.

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The next example (above) is USD/JPY on March 21, 2006, when we see price moving above the 20-period EMA. into ours, but we don’t

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