All experienced forex traders will tell you not to overtrade. The question is, what is too much trading? Is it true that the less time spend in forex market, the better? it is better to stick around to catch more opportunities.
Forex trading is a risky business and ,while some claim that the less time you are in the market, the bigger change you will keep all of your profits safe, the others come up with the approach of staying active almost constantly.
If all you do is watching the screen, you will be know nto clumsy trading. You might win at some point, but give it all back later on due to tiredness, boredom, anxiety, fear or greed. Do other things to take the edge off otherwise you will lose money. you should divide the time spent trading into two categories:
1. Actual Trading 2. Leaning: screen watching, chart analyzing, software design, reading trading materials, forums, blogs and news etc. Whether to trade in the morning or in the afternoon depends on the market movements. If there are valuable moves in the morning session, afternoon session usually ends up being lifeless and monotonous. On the opposite, if morning session is lacking the excitement, the rollercoaster moves will probably happen over lunchtime.
Use figure charts to help you ride the waves up and down. . This way you can actually step away from the computer while profits are piling up, or minimize the losses until the next opportunity strikes.
The trick is to learn how to feel forex market mood of the day. Once you are tuned to the market, you will have a fine idea on how long you should spend behind the screen. The time spent trading depends on what type of a day it is - trending or irregular:. The trick is to spot the turns and trade the swings. In my experience, if you understand the personality of the market, then it so much easier to trade. Figuring out whether the market is trending or being irregular requires some intuition and experience. Don't be disappointed if it doesn't come to you right away. With experience comes great understanding!
Let's try comparing forex market to a farmer (yes, a farmer who works in, let's say, potatoes fields).
Strong downwards trend on a previous day can be equated to the farmer falling down the hill. He is exhausted, probably hurt and needs some time to sit at the bottom of the hill to recover before going back to work again. So now the trading day will start off in an irregular manner and by lunch time the farmer will feel refreshed and rested enough to get on his feet again.
Uptrend day can be compared to the farmer lifting a giant bag of potatoes up the hill. It is hot and exhausting, so the farmer makes little stops and puts the potatoes down on the ground (retracements), rests a while and then continues up the hill. The higher the farmer gets, the slower he moves since the giant potatoes bag is getting heavier with every step. So he makes longer stops and rests in order to move on.
Irregular day with small difference between High of the Day and Low of the Day, the farmer is feeling sick. However, this means that the following day will most probably be a trading day, as the felling-better farmer goes out to work again!
Every trader has a different strategy to approach the market. Use your experience to understand market characteristics and make better profits. Remember, the important thing is quality, not quantity. What matters is not how much you spend forex trading, but how you use this time to compete the market.
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