In order to improve your trading, it is important to pay special attention to the frequency of your trading. In order to have the best control over your account, it is important to learn the value of pacing yourself and your trades.
When some traders find themselves on a winning streak, they start to extend their trading time, hoping to keep the streak going. They sit in front of their computer, monitoring the charts, more and more and they begin seeing trades that aren’t really there. This is not a good for trading or a healthy lifestyle either.
It is even worse for traders having a losing streak: they extend their trading time in the hopes of being able to take revenge on the market. The market, however, is bigger and stronger and this is often the fast lane to blowing through your account.
You can avoid this by planning the times in which you trade.
Scheduling your trading times means that you allocate time just for forex trading. Being concentrated on one task and avoiding being distracted by other things will raise your chances of winning. This rule needs to be applied to every single trade, and you need to cultivate this habit in order to stay profitable in the long run.
The question then becomes: when should you trade? You need to take a few things into consideration before you find the plan that is best for you:
Trading type: Are you a trader who looks for big moves? If so, you should focus on the London and New York sessions. Why? These sessions usually have the highest volatility. If you are looking for range trading at quieter times, you should stay away from these sessions and focus on the Asian session.
Person type: If you are a “morning person” you’d probably perform the best in the morning when you have your best the focus and energy levels. If you are a “night person”, you may want to trade only in the night. The idea is to trade when you are at your optimum and can fully focus on the trading.
Life Limits: If you have a full time job, or a family, or anything demanding your attention and energy, you’ll need to adjust the times you trade to create a better personal life for yourself, and a higher chance of taking profits. Life is not only a bunch of trading opportunities. If your trading and the rest of life collide, you will find it hard to be successful in either.
In an ideal world, when you put up all the facts together, you will be able to find the “ideal” timing for trading. In reality, this isn’t always the case. It is important to avoid being addicted to forex and keep a balance between your life and forex trading. I’ve seen lots of traders lose their head to the charts. They probably didn’t lose a lot of money, but losing touch with reality did not make them successful in trading either.
Trading at scheduled times
Scheduled trading doesn’t mean that you need to trade at every session. In some cases, you will allocate time and test a few possible setups before making any conclusions about whether or not there is something there. Never force yourself into a trade.
Testing the market and avoiding trading during certain market conditions is a very good strategy that can save you money and pull you back from the risk of uncertainty.
Have you ever made a trade during your scheduled time and you still have time left? Don’t run for the next trade. It’s always better to take a break and avoid over-trading. As discussed above, running after the next trade can be disastrous, so can the sense of avenging.
Finding the right time to trade and keeping a good pace: one of the keys to success in forex trading.
Also read: 5 Most Predictable Currency Pairs – Q4 2011
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