Long-term trading systems are also referred to as position trading systems are designed to provide a high as price as possible and to take advantage of the trend.
This is often considered the best long-term forex trading strategy since it is a simple lock-up and leave structure.
Position trading is designed for those who are sparing in the opening of orders in order to spend as little time as possible on the current market analysis.
The long-term strategy described in this article uses a simple mean to determine the trend instrument.
It is also a system that uses Forex currency pairs with the highest interest rate disparity. This is often referred to as carry trading.
This system consists of identifying the long-term trend in the daily chart while combining carry trading strategies. Carry trading strategy involves earning money on a positive swap with the simultaneous sale of a lower interest rate currency and buying a higher interest rate currency.
Tools used in the strategy
Carry trading or a long-term trading strategy uses the 200-period Simple Moving Average, which is plotted on a daily chart. This allows you to identify the long-term trend of a given value. As a result, this provides a secure long-term outcome which is easily determined.
Entry into a position
The signal to enter a position develops when the candle closes above or below average SMA.
Once the candle closes above the average, it is a signal to take a long position. Vice versa, when the candle closes below the average, it is a signal to take a short position.
When this happens, the trader enters a position. This strategy takes into account only those positions that would assume additional profit in the form of a daily swap. If the signal would entail a position that would charge a negative swap every day, then the signal should be completely ignored.
Exiting a position
The stop losses are placed either above or below the 200-day simple moving average dependent upon the direction of the trade.
The opposite signal means that the daily candle closes below the 200-day Simple Moving Average in the case of a long position. On the other hand, in the case of a sales transaction, the opposite signal is generated when the daily candle closes above the average SMA.
In the case of a long-term position, a trader identifying a trend may be able to afford a higher risk than for short- and medium-term transactions, but he should never risk more than 3% of his investment capital.