How to manage long term forex positions

When we discuss somethings about long-term forex trading,we often get asked by forex traders like titled question.The trader was in a long-term trade, was in profit, and then let the trade turn against him and take him out at a loss. You need to have a trading plan, follow your methodology and, most importantly, protect your profits. However, the term “profit” varies from trader to trader.  When most traders are in long-term trades, a mistake is often made by letting their losers run too far and cutting their profits too short.A currency pair we are currently watching (and in a long-term trade) is the AUD/USD. Although this pair may not overwhelmingly be the crowd favorite, the AUD/USD pair is a currency pair worth watching, researching and, if done correctly, trading.We have 17 technical parameters we look at and analyze when trading currencies. While we cannot go into our complete methodology in this article, we will go over some basic technical analysis to help determine potential entry, target areas and stop-loss prices.

After initial research, we determine the overall trend appears to remain bullish. Because this is long-term trading, we turn to Elliott wave analysis to help us determine where we are in relationship to the currency pair.

Developed by Ralph Nelson Elliott in the 1930s, the Elliott wave theory takes into account what we refer to as the “herd mentality” – movement revealing mass psychology swings from bullish to bearish and back again, which translates into specific wave patterns in price movements. Without diving too far into it, Elliott wave theory basically states the financial markets move and unfold in specific patterns.

Utilizing Elliott wave theory and formulas derived from Elliott wave principles, we can review the last upward swing on the hourly chart, starting from early February 2010 and calculate potential target and stop-loss prices.
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