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CO02 - How Much Time Can You Dedicate To Forex Trading?

"As someone who is just getting started with forex trading, one of things that comes to mind is the amount of time you need to dedicate to trade the forex markets. Given the fact that the forex markets operate almost 24 hours a day and five days a week, this question is asked even more. But the truth is that there is no evidence that supports the view that the amount of time spent in forex trading will give you bigger profits. Instead, the question traders should ask is what is the amount of time, that is required to dedicate towards learning about the currency markets. In this article, we firstly dispel the myth about forex trading time and profits and also outline the main aspects that traders need to dedicate towards in forex trading. By the end of this article, you will be able to understand what aspects of trading you should and should not focus on."

One of the most commonly asked questions about forex trading is the amount of time required to dedicate to forex trading. The answer to this question however can change on who you ask.

For example, if you ask someone who trades part time, they might tell you that they spend just under three hours a day trading forex. If you ask someone who is trading full time, of course the number of hours they are working is different from the first response.

The important thing to bear in mind is that the number of hours you spend trading forex doesn’t translate to higher profits. This is often the myth that is quite prevalent. There is no concrete evidence that link the number of hours spent trading forex to profits that are being made.

There is a good chance that someone who trades for just two hours a day if not less, can make larger profits compared to someone who spends more time trading.

The key thing to make note of here is that when you spend more time trading, chances are that you will be taking on more trades. This simply translates to taking on more risk in the markets.

The more you trade, the higher the chances that you will give back most if not all of the profits from the market. On the other hand, a trader who trades for just a few hours a day has the potential to make large profits. But this entirely depends on the trading strategy that they use and whether or not they are disciplined in their approach to trading.

One might think that trading too many hours can create more trading opportunities. Thus, the conventional wisdom goes on to state that this can create higher profit earning potential. But this is not always the case. While trading opportunities are plenty, forex traders suffer from what is known as the fear of missing out. What this basically means that traders fear that they might miss out on a lucrative trading opportunity.

Therefore, they tend to spend more time on the charts. Regardless of whether you trade for just one hour a day or spending eight hours a day trading forex the results can be very different. There is no subjective way to quantify the relationship between time and profits.

On the contrary, traders should focus more on the time they spend in learning about the markets. The more knowledgeable you are about the financial markets, the higher the chances that you can explore opportunities that you hitherto missed.

For example, forex traders can take a cue from the stock markets in order to understand what the market sentiment is. This in turn can help forex traders to apply the same to the forex markets and thus buy or sell risky or safe haven instruments.

Or another example could be when a trader spends more time trying to understand the central bank’s communication and figuring out what the next monetary policy action is going to be. Having this knowledge can help forex traders to potentially find trades that are very lucrative.

You do not need to sit in front of your computer all day in order to make profits. On the contrary, the amount of time you spend learning about the markets can help you to become more efficient and confident about the forex markets that you will be trading.

It is not just the information that you learn about the markets but also a number of other things such as risk management strategies, hedging strategies and so on. Learning about these aspects (which interestingly not many beginners in forex pay attention to) can greatly influence your trading skills. It will make you more adept at trying to understand what the markets are doing and how you can cut your losses short instead of letting emotions rule your trading decisions.

As you can see from this article the sooner you understand the above the better your chances at improving yourself. One thing is for sure, however. Trading is a long term game. Therefore, if you think that you can spend just one full week trading forex to make money, this can actually turn to become very disastrous for your trading.

In conclusion, do not make the mistake of falling for the myth that the more time you spend trading forex will equate to larger profits or vice-versa. Instead of focusing on trading, traders should find a balance that will allow them to both learn about the financial markets and forex in general along with various other concepts that will help in giving them the edge in the markets.

Read 1011 times Last modified on Thursday, 04 July 2019 09:50