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How Long Should You Hold A Trade Open For?
I get a lot of questions from people regarding a trade they have placed and after a few days it hasn’t really moved anywhere and the question they ask me is; how long should I hold a trade open for?
Now because I trade fundamentals, when I get into a position, there is a very specific reason that I get into that pair whether that be something from the news or something from the central bank, there is always a specific reason or trigger.
I will sometimes get into a trade with the intention of it just being a day trade and take say 30 – 70 pips, however if the trade goes against me and I fall into a loss, I will still hold the trade as long as the fundamentals and sentiment on the pair that I am trading remains unchanged, as I will have the conviction following my analysis that it will come back in my favour.
If however the fundamentals or sentiment change I will re-assess the situation and markets and sometimes cut or close a position, but as long as everything surrounding the pair remains unchanged I will hold that position as long as I have to.
So to sum up sometimes I take a position with the sole intention of it being a day trade but the price can go against me and as long as nothing surrounding the pair changes and I still have that confidence and conviction I will hold, I have held a position for 4-5 weeks before which was first intended on merely being a day trade as I’ve known following my analysis that the price will correct and go in my favour eventually.
To answer the question in short there is no set timing for holding a trade it’s merely a case of understanding the markets to the extent that I feel confident enough to know what a particular pair or currency is going to do going forward.