Absolutely agree with Simon on this point. Wether trading the 4h or daily in my case I consider i’m trading rather than investing. If there is an investment part it would be the longer term componding element i.e. each individual trade that is a winner goes into the compounding element of my trading plan or the ‘bigger picture’ aspect of my trading.
Although in a minority on this forum by choosing to trade the longer TF’s I would still shy away from ‘ultra’ long trades… months. I’m not suggesting there is anything wrong with this… each to their own. But I find that by trading the daily you can still run with a good set up from anything from a few days to several weeks. Trading very long periods by definition will involve big swings each way, although addmittedly perhaps in a longer overall direction. I’m just not comfortable with say being 750 pionts up then perhaps only 250 before PA turns back in your favour. Even on the daily… such swings can be traded in isolation with a greater pip count than simply letting a trade run for months.
Quite - even when price is trending down nicely for an extended period, it never moves in a straight line, preferring to drop, retrace, drop, retrace. So if you can time it right, there are many more pips to be had by shorting each drop, getting out, waiting for the retracement, then shorting again. That is how I prefer to trade, regardless of timeframe. With this approach, you can also limit your exposure to bad patches in the market or a sudden reversal. However, it is obviously more work than a very long-term trade, and as long as both make good pips (which they should) then both are obviously great.
You can also remove and replace stop and let your profits run. After entering a trade remove and replace your stop above or below new lower highs and higher lows respectively, repeat this process until the market reverse to stop you out. By doing this you will be in a trade longer with a larger profit margin.
Lower time frame is safer if you ask me. Not only that you have a quick return of investment but also it will give you a daily routine that will enhance your skills as time goes by.
I tried the long term trading, but it wasn’t for me!
I had an idea, based on the weekly chart & opened a 10 lot trade after weeks of planning.
I then got bored and I decided to close the position taking a nice profit and i am glad I did because the pair seems to be stuck in a pig market and I’m now trading the volatility making lots of pips.
