Should I “Buy And Hold” A Trade Or Not

To buy and hold a mutual fund, stocks, or bonds is a common practice. To buy and hold a currency is not as common even though it can be done. When a trader or investor buys and hold, they are usually looking for more than one type of income. Not only the appreciation of the investment instrument but dividends, swap, or interest are also motives for investing.

In the currency market swap may be paid on a daily basis. Swap is interest the banks pays or charges depending on whether you are buying or selling a given currency pair. Each broker will give you the rates at which swap is paid or charged for each currency pair they offer.

There is a longer-term type of trading that traders use when they are looking for appreciation of the currency pair as well as getting paid the swap. This can be very profitable in the long run if you buy at the right time and time the entry to the trade. This type of trading is most successful by using the longer time frames; monthly, weekly and daily time frames.

It is a wise practice to know how to trade before trying this type of trading in the currency market.

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