How long does it usually take you to study Forex charts and monitor the market? I’m sure that many new Singapore Forex traders stare to a computer screen all day long, getting stuck on the charts, drink lots of coffee and constantly open trades. But is it the only realistic approach available in order to trade Forex successfully?
Time frames and currency pairs
Timeframes that you use on the charts when analyzing the market, determine the frequency with which you are checking your graphs. Thus, it goes without saying that if you are trading on a 5 minute chart, you have to analyze much more graphs than if you were traded on Day 1 timeframe.
Personally, I am not interested to work in any timeframe below D1, and my Forex trading strategy is based on the daily timeframe. Some time ago I was trading on the 4-hour and even hourly charts, but currently I’m spending less time in Forex and my Forex profits are still high.
Also the more currency pairs you are focusing on, the more time you need to spend to analyze the charts. This does not mean that you can not work with more than 20 currency pairs at the same time; it simply means that you must have a system with which you can effectively monitor every currency pair. For example when trading on the M15 (15 minutes) time frame it is very hard to analyze 20 currency pairs, and when trading at D1 chart frame it is quite possible and more convenient.
Over time, you will gain your own experience and trading skills as well as the confidence to consistently and quickly analyze the market. Knowing where and when to “hunt” for a good trade and when to properly use the lower timeframes, will help you save a huge amount of time when analyzing the graphs. You must have a clear idea of where to look for a signal to open a trade. It will allow you to plan your Forex trading in advance and prevent you from constantly monitoring the markets and wasting lots of time.
Also, online traders who carefully and for long time track the markets can often become victims of this addiction. They may open trades that they are not sure about. This is probably due to the fact that traders feel the pressure, because they need to open a trade to justify their efforts and the time they spent looking at the monitor.
Price alerts and pending orders
Price alerts play a huge role in saving the time required for charts’ analysis.
Their set up is very simple. When you analyze each currency pair and decide on which price level to sell or buy, you can set up an alert (if your trading platform allows it) on the certain price level that you think is good for opening a trade for a particular currency pair. When the price reaches the desired level, you will be notified with an alarm or by a text message.
The same principle can be used for pending orders, where you set up a pending order for a certain price. When the market reaches your price level, the order will open your trade automatically.
Have a trading schedule
If you treat your Forex trading as a real business, you will realize that it is very important to set up appropriate working hours, as well as to understand when to work and when to rest. It’s easy to get involved in the market and feel like you have to keep track of the price movements 24/7 in order not to miss a single trading opportunity. This is a dangerous habit that can be developed if you are too involved in currency trading. This can easily exhaust you.
If you realize that the Forex market started dictating you its way of life (the classic example is when you do not go to sleep all night, just to catch an opportunity to enter the market), then you are too deeply immersed into trading. You have to know when to disconnect yourself from Forex, turn off the graphs and have a good night’s sleep.
Be smart, set your trading hours and stick to them, even if trading is your main daily activity, make your trading schedule by deciding on the time during which you are trading Forex and try to stick to it consistently.
Take a Day Off
Once a week you need to have a day of from trading. Do not read forums, don’t study your strategies, don’t view graphs and don’t test any signals. Don’t do anything associated with Forex trading.
The best way to spend your day off from trading is to go outside, meet your friends, visit an unfamiliar place, read a book or just spend time with people you love.
Such days help our brain rest, process the accumulated information and will let you trade with greater productivity in the future.
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