If I put on a trade and the price went down (when I was expecting it to go up) then can I keep the trade open for say a week or longer if I wanted too? I understand a stop loss etc should be used but let’s put that to one side for now.
From what I understand there would be the daily “roll over” charge which would get applied but other than that can somebody keep a position open? Similar to buying shares and keeping it long term?
I guess because people usually trade on margin / leverage and if the price kept going down then the position could eventually end up getting closed down automatically and account funds zero’d? Unlike shares…
Not sure what you’re tryin to ask here, but if you’re tryin to hold trades long term which many swing traders do then i suggest hold winning trades and trail SL behind it, if trades goin the opposite way, you will get swap charges (daily roleover) and wasting time in a losing trade when you can cut your losses and look fr a win somewhere else. Why stuck your capital in losing trades… also it may end up blowing your account if trend in the opposite direction is strong… cut your loss on losing trades free up your margin and go in on a different pair to make a win… thats wot most succesful traders do…
Pretty much as you asked, there is no limit to how long you can hold a trade open. Whether you would want to is another matter as costs accrue as you have said.
But its also possible the probability of profit also decays and the cross-over point comes from the original thesis for the trade. An obvious example would be the trade is a trend-following position and the trend starts to flatten out or even reverse. A good guide might be to ask yourself if you were not in this pair already would you be looking to get in here and now? If your answer is no, you’ve got options - you might exit immediately, you could reduce your position size, or tighten the SL, or use a trailing SL, you could even set an entry order in the opposite direction. All this depends on more TA than just an entry pattern of course.
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You can keep a trade open for as long as your broker will let you, sometimes up to a couple of months. The “rollover cost” can also be a “rollover profit” depending upon the differing interest rates between the currencies in the pair.