The most common question, newbie traders ask about Forex trading is the amount of time to invest in Forex trading.
I would say, it all depends upon you.
Forex traders have different time they spend on trading so time changes depending on your trading style.
You can only trade effectively if your trading time does not affect your life style.
Therefore your daily life style contributes a lot when determining how much time to dedicate to Forex trading.
Since the Forex market is open 24hrs, 5 days a week and with different sessions, it is easy to choose the appropriate time that fits your daily life style.
You can either choose to trade during the day or at night. Or else, a long-term trader or short term trader. Or you can choose to trade in a specific trading session.
Whichever time you pick should match your trading system and style.
What should you consider to determine how much time to dedicate forex trading
1. Trading strategy;
Your trading strategy dictates how much time to invest in Forex trading.
If your strategy works better on lower time frame than higher time frame, it means, the setups take a short time to form.
Therefore you have to spend more time on charts to avoid missing out good opportunities or to avoid late entries.
2. Your Trading style;
Like we saw earlier, your trading style influences a lot your trading plan and also the kind of a trader you are.
The scalpers spend a lot of time in the market, next are the day traders.
Position traders spend less time in the market compared to swing traders.
However, the mechanical traders may not need to spend any of their time to the market unless they are back testing the system.
3. Time frame to trade;
The time frame you trade on also dictates how much time you should dedicate to Forex trading.
The shorter the time frame you trade, the more time you need in front of the charts.
The longer the time frame you trade, the less you have to watch the market. You can monitor your trade from time to time.
4. Your trading goal;
If your goal is to take as many trades as you can, You have to sit on the charts for long.
However, if you are comfortable with just having 1 – 2 trades a day or week, then no rush. The market is open 24hrs a day and 5 days a week.
In addition, you should also consider the size of your trading account.
Trading on a very small account.
This forces you to take as many trades as you can to develop your account.
Secondary, you have to use a very small size to trade to cater for margin or else you would blow it on a single trade.
Also, you can only trade very small accounts on a smaller time frames. This forces you to spend more time on charts looking for more opportunities.
Trading on a big account
With a big account size, you can take few trades with large size.
You can also take long term trades because you have enough capital for margin and to cater to big stops.
5. Your level of experience on trading;
Last but not least, your level of experience. The inexperienced traders will need a lot of time in the market compared to experienced traders.
Traders with experience need less time to analyse the market, to make decisions and are very familiar and confident with the market charts.
When it’s your first time in the market, a day is not enough for you to understand what exactly is happening.
If you are new to the market, you will need more time to study, analyse and to make decisions to trade. But as you earn more experience, you will need less time to make decisions to trade.
When we talk about the time you spend trading, we don’t mean you sit in front of the computer from the first trade till the end of the trading day.
Conclusion
In case of a long-term trader, you don’t have to always sit in front of your laptop or desktop.
Just have specific times to monitor your running trades once in a while. Alternatively, you can automate your trailing stops so that you don’t have to worry monitoring every time.
Conversely,
Shorter time frame trader have to spend most of the time on the laptop/computer looking for setups on the charts and monitoring your open trades.
For night traders you have to start adopting the behaviors of night dancers. Or buy more coffee to keep you awake.
When it comes to my scalping friends,
You’ve got to buy yourself shades or binoculars.
You will spend most of your time seated in front of the market charts.
How much time to invest in Forex trading depends on only you.
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