Yesterday I started answering an email from a reader, covering the part of what he was asking about regarding charting software. Today I’m going to tackle the second part of this relatively new trader’s question. This one speaks mainly to trade holding periods.
Is it ok to leave a trade open more than one day and I ask that question with 100% confirmation with my broker. Once a week, they upload in-depth analysis on a specific pair example:  GBP/ USD. Does that make an intraday trader or swing trader. Most of the time, I try to close an order the same day.
The short, simple answer to the base question about whether it’s OK to hold a trade for longer than a day is, of course, “Yes”. There may be implications in terms of roll-over and/or carry interest to holding a forex position overnight, but there is nothing to stop someone from doing so if that’s what makes sense for the trade(s) in question.
Now, whether holding beyond a day makes sense for the types of trades being made is something I cannot determine based on the information provided. However, if the trading is done based on the weekly in-depth analysis mentioned, I would think the trades suggested would be intended to be something longer than day trades.
To clarify definitions, a day trader is one who opens and closes trades within the same trading day. The definition of swing trading is a bit more variable. I generally think of it as trades intended to be open in the a couple of days to a couple of weeks timeframe.
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About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
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