Long-Term Trading vs Short-Term Trading

So you did it, you actually took a leap of faith and started learning the ins and outs of trading online. Congratulations! Heading into unknown territory is always a little scary, but perhaps a nudge in the right direction might give you the confidence to push forward. Let’s start by figuring out whether you are best suited for long-term trading or short-term trading.

Short-term trading

Experience the fast and exciting world of short-term trading.

A short-term trading strategy requires routine, discipline, daily investment of time, and an up-to-date understanding of the political and financial environment. Also, short-term trading is fast and exciting and offers the drama of a losing position but also the thrill of the win. With short-term trading, it’s an action-packed rollercoaster every single day. Putting aside the financial opportunities for a moment, short-term trading can be an entertaining challenge and add value and purpose to your free time.

Typically, short-term traders are active throughout the whole day. Short-term traders tend to check on their orders whenever they can spare a minute, which makes the WebTerminal and mobile trading app the ideal trading platforms.

If you’re willing to follow your trades closely in between your normal daily activities and invest a little time in the mornings and evenings, then perhaps short-term trading might become your next favorite thing to do.

Long-term trading

Playing the longer game requires discipline and foresight to make it to the distant finishing line.

Long-term trading is not necessarily a more profitable way to trade than short-term, nor is it less profitable. Many traders insist that a long-term order is safer, but that observation is constantly in hot debate amongst pro traders. Patience is one thing a long-term trader must have. Days or even weeks of market analysis can go by without ever seeing an attractive long-term opportunity. And, as with the short-term trades, there is no guarantee.

Long-term traders usually prefer to download and then install the free trading platform MT4 or MT5, which supports several additional features such as scripts, expert advisors, and a VPS function for more secure and faster execution.

If spending time searching for that perfect storm, then watching your order progress over time sounds appealing, you should consider long-term trading first.

Start low and slow

Long-term trades by short-term traders often end badly. It’s rather like a sprinter launching at full speed in a one-mile race. Equally disastrous is when a long-term trader targets a pair using short-term reasoning. Test yourself using the risk-free demo account and see which trading style suits you best. Once you’ve found a balance of risk and profit that suits your goals, you can start working on building your portfolio.

To recap: if you like the thrill of competition and wish to challenge yourself daily while in the pursuit of profit, then perhaps you should try short-term trading first. Just remember that the risk of volatility is always there, so don’t guess.

Top tip: trade less volatile pairs that have high trading volumes. Compare lower time periods on the charts, and set an attractive Take Profit and a tight Stop Loss.

Alternatively, if you don’t have the time to spend an hour or two each day looking for opportunities, then perhaps short-term trading is not for you. If you’d prefer trades that can be left on the burner to simmer for a while, then long-term is definitely an option to consider.

Before you make any trades with real money, sign up with Exness, download the MT4/MT5 trading platform, and start experimenting with a demo account. Try running some long-term and short-term trades and see which ones feel right. Perhaps you’ll want to enjoy the benefits of both at the same time.

Get free access to a trading platform and test your skills!

Set up an Exness Account Here

This article is a marketing communication. It does not constitute investment advice or research. Its content represents the general views of our experts. It does not consider individual readers’ personal circumstances, investment experience, or current financial situation. This article is not prepared in accordance with legal requirements promoting independent investment research. Exness is not subject to any prohibition on dealing before the release of the article. Readers should consider the possibility that they may incur losses. Therefore, Exness is not liable for any losses incurred due to the use of its articles. Please note that past performance of an asset is not a reliable indicator of future results.