Major Types of Trading Depends on your Plans

There are two major types of trades done in the forex trading arena these days - short-term trades and long-term trades. If you find yourself overwhelmed and confused in choosing which type would be best, simply take note of the differences between these two types and consider the advantages and disadvantages of each so that you can be guided in making the right decisions. 

Basically, the major difference between the two trades is the fact that short-term methods (day trading, scalping) are actually designed to show a substantial yield in a short time period. While long-term positions, on the other hand, are designed to last for quite a weeks, even months and present a slow yet progressive increase in their yields. 

Let us discover more about the differences when it comes to the disadvantages and advantages of each type of trading behavior. 

Short-Term Trading 

The major advantages of trading for a short-term play are the potentials for growth at a very fast period of time, ranging from a few minutes to a day. Although there may be fluctuating trends that could affect the market, holding a position short-term can still allow you more control over your money, and it is more likely that you can keep a more watchful eye on your position within such a limited time span. 

However, this type of trading may be a bit riskier due to the fluctuations present in such a volatile currency market, as mentioned above. As compared to its long-term counterpart, this type of trading may much easily be affected by unpredictable circumstances, because it is in a shorter period of time. And so, even if there is a very huge chance that you can make a lot of money in this type of trading, there are also great chances that you can lose a lot. you can also choose online forex trading tips if you find yourself in Trap or confusion.

Long-Term Trading 

For long-term trading plans, on the other hand, there is a greater ability to gain small and distributed profits over a longer time frame. And due to its slow pace as well as steady, it becomes more constant and involves fewer risks. 

But of course, a disadvantage for the slow growth of your account size may indicate that you cannot expect to earn a profit right away especially when you are badly in need of money. In addition, you may also have less control over your money because of your positions in the longer time-frame may need more time to move substantially in your direction. 

Also take note that because trading may require a lot of fees to be paid as it progresses and due to occurring fluctuations in the market, some long-term targets may get low time before they can essentially climb up and become painful. 

In choosing between these two major types of trading activities, the most important thing you have to consider in order to gauge which way would be more beneficial for you is to contemplate on your reasons for trading. 

If you were to trade forex with the ultimate goal to earn money fast then surely a short-term plan would suit you. But on the other hand, if you want to see a steady account growth and don't want to spend all your time staring at the screen, and you want to have money but also the freedom of time, then a longer-term swing- or position trading is the best for you. 

Whatever your decision may be, always remember that there are advantages and disadvantages in all kinds of trading activity. And eventually, to achieve big in your endeavor, you must choose to take on minimum risks and produce smart decisions or live forex trading tips in order to control your trades.