One of the questions that we get asked pretty often is ‘How can I fit trading into my life? I work normal daytime hours, and can’t be in front of the screen. What do I do?’
This is one of the most common issues for newer centralex traders, and people that are still struggling to find the time to trade. Most people think that you need to spend hours in front of the screen as a day trader to make money trading forex. This is a huge misconception that couldn’t be further from the truth.
As professional forex traders, we know that its possible and practical to make money trading forex from as little as 20 minutes a day. You just need to follow the next 5 steps to reducing your time in front of the screen and fit trading into your lifestyle around your day job.
1. Keep your Day Job.
Too many people get into trading and instantly try to work out how quickly they can quit their job. This is usually all within the first 2 or 3 months, when they are still in the honeymoon period. You need to be fully aware that you are not going to quit your job and retire on a beach inside of your first 6 months. The best thing you can do for your trading is to keep your day job which brings in the regular income, while you grow your trading account, and if possible add funds to it along the way.
Trading the forex markets while you have a regular income coming in will mean that you don’t have the need to try to force the market, to overtrade, to force trades and to try to make money. You can focus on the essential part of trading, which is trading.
2. Learn to Trade the higher timeframes.
If you’re going to fit trading into your lifestyle you have 2 options. Firstly trade really small timeframes such as 30 second and 1 minute charts, which funnily enough is what most amateurs start doing. They feel they have to make money in those 30 minutes in front of the screen in a state of heightened tension. This is certainly one way to do it, however it seems a stressful, difficult, not to mention scary way of trading! Trading small timeframes like the 1 minute chart is incredibly difficult, as you may have a 3 pip stop loss with a 1 pip spread. This means that 33% of your trade is just the transaction cost. This means making money rather difficult. Not to mention the spread could be 2 or 3, and you land yourself in a whole world of pain.
Why not take the sensible and practical approach of trading higher timeframes like Daily charts. This way you only need to be at the charts once a day when the New York market closes, which you can quite easily fit into your lifestyle. Trading for 20-30 minutes at the end of the trading day allows you to trade multiple currency pairs, and benefit from their movement over the course of the trading day.
3. Restrict your trading time.
Don’t give yourself 3 hours in the evenings to trade. Believe me, you’ll find a way to spend 3 hours in front of the charts. Trading can become addictive, and if you don’t consciously restrict yourself to a certain time period, you’ll find yourself there for hours or even days!
Human beings only have the ability to concentrate fully for 20-30 minutes, so why on earth would you want to be controlling your money 6 hours later? Your brain will be like a vegetable and not capable of making logical decisions. Restrict your trading time to under 30 minutes a day, and trade the way you want to trade for the rest of your life.
4. Don’t become obsessed with trading.
Trading can be incredibly addictive, if you let it. Remember that trading is just one aspect of your life, don’t let it be the dominant part of it. Don’t trade for trading sake. You’re trading only if your edge is present in the marketplace, and the market presents a high probability opportunity. Again you’re trading to make money over time, and sometimes there will be nothing there, so walk away.
5. Trading less, to make more.
Lots of new traders believe that the more that you trade, the more profit you stand to make. Stands to reason, right? With almost everything else, the more time and effort you put in, the more you get out. Learn how to trade less, to make more.
Trading is slightly different. While you’re learning to trade, the more time and effort you put in, the quicker it is likely that you’ll see improvements in your learning, understanding and results. However when it comes to trading itself, it is knowing when not to trade that is as equally important as when to trade. The market will produce a certain number of high probability opportunities every month, and no matter how hard you try, you can’t force any more. Instead focus on trading those high probability price action signals when they present themselves and stand by to reap the rewards.
Less really is more. Focussing on high probability price action signals will likely lead to profitability, while forcing low probability trades will undoubtedly cost you money.
Imagine that you had to risk 10% of your account on each trade, and watch how selective you suddenly become. Keep that standard and apply it to all of your trades at lower levels of risk such as 1%. Beyond that, try restricting yourself to no more than 5 trades per week and you’ll be forced to pick the best opportunities. As your discipline improves, look to take additional trades, if the market presents you with the opportunity.