Ultimate magazine theme for WordPress.

Time Duration to Hold an Open Position in ETF industry

Holding the time frame of an open position in ETF industry totally depends on a trader, and how long he decides to keep that trade open personally. Holding an open position is completely up to an investor’s goals and strategies, which may range from 30 minutes to six months or even years.

For a scalper, the ideal holding time can vary from seconds to half an hour. For a day trader in Singapore, time frame can be a half-hour to a whole day. A swing trader trades based on hours to few days. A position trader continues his trade from one week to a few weeks. On the other hand, a long-termtrader continues his business months after months.

Our goals decide how long we will hold an open position in the market, and it reveals which type of investors we are.  For instance, if our target is to achieve 700 pips, then we should hold our trade in a longer time frame until we fulfill our desired goal. If our goal is to achieve 40 pips, we may have to hold it for 5-10 hours.

Best practices for newbies

Most of the newbies get confused about how long they should hold their trade open. Sometimes we find that a beginner opens a trade for 15 minutes and holds it weeks after a week, which is not a good practice at all. Because beginners forget to set stop-loss order, and their long waiting result in zero when their balance gets wiped out.

Tips for holding a winning open position

To set a winning position, one must set a stop-loss order or stop profit order to avoid the potential risk in trading. Investors must set an exit or entry points level if they want to execute their trades successfully. You must have the skills to find the best ETF to buy now as it will improve your position trading method.

Forex SWAP

Forex SWAP is an interest fee that can be paid to the traders at the end of the each day for holding a position with the broker. To get the facility of the SWAP, knowing the currency pair is very crucial to cut some unwanted fees. If someone holds a sell position overnight based on a currency pair, then he has to pay some fee.

Currency Pair

In the Forex market, the businessmen get varieties of currency pairs, and among them, some are majors because they are commonly traded in the market from big economies. The cross or minor currency pairs come next after the majors, and they are called minors because these are not paired with the U.S dollar, and these are also called exotic pairs, which help for the development of the emerging economies.

Currency pairs are also differentiated with the liquidity level, spreads, and volatility. If someone wants to hold the position for a long time-frame, then he has to understand the types of currency pairs using which he is going to trade. High liquid pairs are not much volatile, and they have low spreads, which is very good for long time-frame trades. Highly volatile pairs help to get the large spreads covers in short time. If a beginner wants to hold an open position for a long period of time, then he should select a currency pair with high liquidity and less volatility. Currency pairs’ behavior changes according to the market sometimes, and understanding of the right currency pair helps to make a bullet proof trading plan based on cherished volatility and spreads.

Holding an open position in ETF trading is physically and emotionally challenging, and it is a better practice to hold the position bases on a longer time-frame because a shorter time-frame does not give a higher return on the investment. Beginners will not be able to make the right decision always, but the experience will teach them gradually how much time they should hold an open position to run his trades successfully.

Comments are closed.