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A Day In The Life Of A Forex Trader

a forex trader dayThe Forex trading lifestyle is usually depicted as one full of glamour with traders showcasing their new sport cars and yachts on YouTube channels and other documentaries. A more serious depiction of the trading lifestyle is related by many from the Million Dollar Trader documentary by Lex Van Dam that sort to make ordinally people traders. Hence, before you quit your day job for the pyjama lifestyle and overnight riches, let us have a look at how the Forex trading lifestyle really is by looking at a day in the life of a Forex trader.

Forex trading is a very flexible profession and most traders’ daily routine will vary depending on the type of trader they are. Though some tasks Forex traders take every day are similar, it is not possible to place all Forex traders into any one particular set of daily lifestyle. So, let us dive into the various types of Forex traders there are so as to clearly understand the various daily routines they have.

Scalpers

Scalpers in the Forex market practice very short term trading with their trades lasting only a few seconds to a few minutes. Though their trades only gain a few pips per trade, they uses leverage to their advantage to generate relatively large amounts of profit from the few pips gained. On the flip side; due to the use of high leverage, losses can also be devastating to their accounts.

Given that the Forex market is open 24 hours a day, Monday to Friday; a scalper will prefer to trade during the busiest times of the day so as to take advantage of volatile market movements in the hope of catching profits. The best and busiest time of the day for the scalper is the London-New York trading session overlap.

stock exchange

Hence, a day in the life of a Forex scalper will usually be free and occupied with other engagements prior to the busiest trading hours of the day. Once trading kicks off, the scalper will be fixated on the Forex charts until market volatility dies or trading targets are achieved.

Day Trader

Just like the scalper, the Forex day trader is also interested in short term trading profits by holding their positions for a maximum of the current trading day only. A day trader will wake up and analyse the market at the beginning of the day for various technical chart patterns that may lead to a profit. He/she will also check the Forex economic calendar for major events that may influence the market movement during that day. The day trader takes positions at the beginning of the day and will be back at the end of the day to check up on their positions, closing any open ones.
A day in the life of a day trader is simple as there are two action times; at the beginning and at the end of the day.

Swing Trader

This type of Forex trader will hold trades for hours to several days taking only a few hours a day to analyse the market. A day in the life of a swing trader is also very flexible since they only dedicate a few hours of their day to analyse the market and hence most of their day may be filled with other non-trading related activities.

For instance, a swing trader may dedicate two hours of their day to looking at technical market patterns and economic news to base their trading decisions on. This translates to only ten hours of their week dedicated to Forex trading.

Newbie Forex swing traders will often experience sleepless nights due to open trade positions held overnight. So it is not unusual to see these traders wake up in the middle of the night to check on the progress of their trades.

Position Trader

A position trader focuses on long term market opportunities ranging from weeks, months to years. Their analysis is mainly focused on fundamental models and themes as well as long term technical chart formations.
This type of Forex trader has the most flexible trading lifestyle as their trading decision is made only once when picking the directional bias with occasional checks on the progress of their positions.

Having looked at the various types of Forex traders, below are the most common tasks taken in the day of a professional Forex trader;

1. Planning;
This is usually at the start of the day, after their usual daily routines be it yoga, the gym or the morning run. Most Forex traders will work from the comfort of their home, if not; the next order of the day will be to commute to their office. Over a cup of tea or coffee, the Forex trader will go through his/her trading plan formulating the day’s trading goals as well as risk limits to be taken based on the current available account equity. The trader will also routinely rehearse his/her trading strategy or methodology so as to ensure he/she sticks to it through the trading day and not get sucked into unplanned trades due to lack of discipline.

2. The Economic Calendar;
After planning their trading day, any professional Forex trader will check the events that are likely to influence the market movements and hence adjust their trading decisions appropriately. Hence before proceeding to make any trading decisions or trades, the Forex trader will check the economic calendar, usually for high impact news.

3. Trading;
Having gone through the above two tasks, the trader can now check for viable trading opportunities based on their trading strategy for instance technical chart patterns. They can then proceed to place the trades and monitor them throughout the day depending on the type of trader they are.

4. Review;
A day in the life of a Forex trader will end by reviewing the day’s trading. This is the main reason Forex traders are encouraged to keep a trading journal; recording important aspects of their trading so as to use it as a basis for review at the end of the day. The trader will realize the mistakes made during that particular trading day and rectify them during the following trading day.

Again, different Forex traders will have varying daily lifestyles, but the above four tasks will be observed. The flexibility is what allures most people into the Forex trading but before you get into the profession, check your personality and fit it into the type of trader you want to be. That will govern the type of daily lifestyle you will have as a Forex trader.

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