Buy and Hold Strategy

Buy and hold strategy is a type of investment and trading when a trader buys the security and holds it for a long time.

A trader who employs buy and hold investment strategy is not interested in short-term price movements and technical indicators. Actually, this strategy is mostly used by stock traders; however some Forex traders also use it, referring to it as a particular method of passive investment. They commonly rely on fundamental analysis rather than technical charts and indicators. This already depends on the type of investor to decide how to apply this strategy.

A passive investor would watch the fundamental factors, like inflation and unemployment rates of the country whose currency he has invested in, or would rely on the analysis of the company whose stock he owns, considering that company’s growth strategy, the quality of its products, etc.

For an active investor it would be more effective to apply technical analysis or other mathematical measures to decide whether to buy or sell.