Becoming a forex trader can certainly be exciting! With all the market ups and downs, you never can be sure what will happen next. The excitement and the chance to make a pile of money are why many people decide to become forex traders. But hopefully they understand how much hard work goes into trading before taking the plunge. Sure it can be thrilling, but way before the thrills begin you must learn, study, be aware of the different trading regulations, practice and follow the pros to see how trading is done professionally. Then once you finally begin to make your trades, you will find out that along with the challenges of a swiftly changing market, there is a lot of time spent staring at the monitor waiting for something to happen. This lifestyle is not for everyone, even though it does have its perks.
Choosing a Time Zone
Since the forex market is open somewhere in the world all the time, you do not have to stick to your local market to trade. If you’re a night owl, then go for a market that is open during your nighttime hours. Some traders do like to trade with their local currency so will wake up early in the morning to get a head start before the market opens. They’ll grab their cup of coffee and scour the news headlines to look for events that may affect the price of the currency they are trading. This could be anything from poor economic reports and interest rate hikes to complete government upheavals. Working at home alone takes a specific discipline, so set the alarm and get up in ample time to be prepared.
When to Trade
Once the market opens, wait and watch to see which way the market is moving. Monitor the charts and go over scenarios in your head about which options would be best for each situation. When you feel confident of what is going on, go ahead and begin entering trades. Those first few hours up until around lunchtime are when most trading will be accomplished. After lunch, the market may or may not pick up, but then if you get back on the last hour, which tends to be extremely volatile, you might pick up some good trades.
Ending the Trading Day
It doesn’t matter which hours you choose to work or whether it’s the beginning of the day or the end. What does matter is how you close out the trading day. You can keep records of your day by taking screenshots and storing them in your computer, but it is extremely important to develop and use a trading journal. This is where you make notes regarding the market trends, which trades you entered and how you exited from those trades. Did you earn money? How much? What could you have done to make the trade more profitable? Did you lose money? How much? What would you do differently next time?
Asking yourself those questions and reviewing the details of each trade is where you will learn.