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Forex Strategies for Long Term Investment

Many retail forex traders I have come across are usually into forex trading for the short-term. Hardly will you see traders who have structured trading plans and forex strategies for trading forex over the long term. They jump in and out of positions and do not really have a target for their forex trading activity.

If you are a trader and you can identify yourself in this category of traders, I am going to put this question to you right now: do you now that you can use conservative forex trading strategies with very little risk, to make you a millionaire in as little as 5 years if you are patient and can follow a well designed trading plan? This is what we will explore right now in this topic.

The problem with most retail forex traders is that they are in a hurry to use forex trading as a means of getting rich quickly. They picture themselves riding Ferraris and living as large as the bling-wearing hip-hop moguls within a matter of months. This leads them to take risky trading decisions such as exposing too much of their trading capital in the market, and trading on hunches rather than using low-risk forex trading strategies. This invariably leads to margin calls within a very short time. Indeed, most retail traders who are new to the business lose all their trading money within the very first month. If traders could learn to see trading as something that will bring rewards over a period of years rather than weeks, and commit themselves to using very low risk in trading, they will certainly see profitable changes to their trading accounts.

A typical forex trader wants to make at least 70-100% returns every month. If you ask me, this is unrealistic. The market situation is dynamic; sometimes we have quiet months with very little volatility and at other times we have hyperactive months. It is more realistic to set very low monthly targets for yourself. One of the best forex trading strategies that can be used to build enduring wealth in the markets is setting a profit target as low as 15% per month (which is $7.50 a day or $150 a month for a $1000 trading account). At this rate of return every month (15%), this $1000 account will grow into more than $4.3million in five years with the power of compounding. I mean, how can a trader not make $150 over 20 trading days in the month?

 

(Courtesy of Forexoma)

In order to achieve this, you have to run away from aggressive trading styles and forex trading strategies. Forex trading strategies that cause large drawdowns will not help your cause in this case.

If you are serious about using forex trading to transform your finances for the future, then this is something you should look into. Start using conservative forex trading strategies with minimum risk so as to achieve the compounded results that we see on the snapshot above.