Everyone wants to talk about money management when it comes to trading Forex. But what about time management? How you spend your time as a Forex trader is essential to your success. It can mean the difference between finding consistent profits and struggling.
Where do you spend most of your time as a Forex trader? I’m not talking about vacation time in Fiji or the Caymen Islands. I’m talking about how you manage your time identifying trading opportunities, managing open positions, etc. In short, how you spend your time working on your craft.
Time management is important in all aspects of life, however I’ve found it to be most important in the world of Forex.
Why is that?
Because poor time management skills when trading Forex can cost you money, and lots of it!
If you find yourself starring at your charts for hours on end, that’s poor time management. And guess what happens when you do that? You make silly, emotional mistakes that can cost you thousands of dollars or worse, lead to a blown trading account.
That’s a costly way to spend your time in my opinion.
In this lesson we’re going to discuss the importance of proper time management when it comes to trading. I will also share with you how I broke the bad habit of too much screen time in my early days of trading Forex.
The Physical and Mental Aspects of Forex Trading
It should be pointed out that proper time management when it comes to trading Forex can be both physical and mental.
Let me explain…
How many hours per day do you spend thinking about trading? How many of those hours are spent thinking positively about your abilities as a trader versus worrying about your open positions?
That’s the mental aspect.
Now, how many hours per day do you spend in front of your trading station? Probably a lot as most traders tend to do, especially when first starting out. I know I spent a ridiculous amount of time staring at my monitor for hours on end when I first got started.
That’s the physical aspect, and the one we’ll be covering in this lesson.
An Old Trading Adage
There’s an old adage that says it takes 10,000 hours of screen time before a trader becomes consistently profitable. Of course there’s no “one size fits all” as everyone learns at different speeds. Thus we can take this for what it is, a general statement rather than a universal truth.
But one thing I do know for sure is that there is a big difference between studying the markets and hoping for profits. The latter is what most traders do, and it’s a large part of why 90% of Forex traders still aren’t profitable.
In fact I’ll go out on a limb and say that it’s a habit every new Forex trader faces at some point. I don’t think there has ever been a Forex trader who didn’t fall into the trap of too much screen time at some point in their trading career.
But that doesn’t make it okay. It does, however, bring to light the idea that too much screen time can kill your Forex profits. So then what is the adage referring to?
The adage about 10,000 hours is referring to study time, which is time spent learning how markets move. It’s the time spent absorbing the ebb and flow of the different markets. Noting how they react to dynamic support and resistance and how they respond to certain price action strategies.
What it is not referring to is time spent obsessing over open positions or scouring the market for new opportunities. That kind of behavior is not only unhealthy, it can be catastrophic.
The more time you spend obsessing over open positions, the greater the chances are that you will make an emotional decision. Write that down somewhere if you have to. Engrave it in your brain so that it constantly runs through your mind every time you sit down to look at your charts.
The same goes for searching for new trade opportunities. The very best trade setups are always obvious. They don’t require hours of screen time to identify.
So what’s the solution? How do you prevent yourself from making emotional decisions due to staring at your charts for hours on end?
The best way I found is to structure your time. In order to do that you will need two things:
- A daily plan
- A timer
A daily trading plan is essential for managing your time as a Forex trader. It will help curb emotional decision-making by introducing structure to your day. It will also get you in the habit of managing your trading like a business, which is key to becoming a successful Forex trader.
The second thing you will need is a simple timer. This can be an egg timer, a timer on your phone or even an online timer. I’ve found ten minutes to be plenty of time to manage any open positions and identify new opportunities. If you can’t find a new trade opportunity after 10 minutes, there isn’t an opportunity worth taking.
Here’s how the two work hand-in-hand to help you manage your time.
If you’re trading the four hour and daily time frames, you only need to check in on your charts every four hours, at most. We only get 6, 4 hour candles each day, so to check in on your charts more often than every 4 hours doesn’t make much sense.
So every four hours when you go to check in on your charts, you set your timer for ten minutes. Once the timer is up, you have to walk away from your charts. Simple as that.
This will keep you from spending too much time looking for new setups and will also keep you from obsessing over any open positions, both of which can lead to emotional decision-making which will ultimately cost you money.
How you spend your time is critical if you want to become a successful Forex trader. It isn’t enough to work hard. In fact when it comes to trading, the harder you push, the harder the market pushes back. And guess what, the market wins every time if you turn it into a grudge match. You can’t force your way to consistent profits.
You have to work smart as a Forex trader. Part of working smart means knowing how to manage your time in front of your charts. Because mismanaged screen time can lead to emotional decision-making rather than logical decision-making.
So start working on a daily trading plan today. Work out when you will check your charts throughout the day, and then use a timer to make sure you keep your screen time limited.
Trust me when I tell you, it works!
Do you spend too much time in front of your charts? If so, I hope this lesson has given you some “food for thought” to help manage your time more effectively.
Please leave your comments or questions below. I look forward to hearing from you.