Being successful at Forex trading is not only a function of your trading strategy. There are many more factors that influence your bottom line, and having a straightforward trading routine is one of them. In this article, I’ve listed the top 5 ways you can improve your Forex trading routine. The sooner you embrace them, the more effective your trading will be.
1) Take breaks and get at least 7 hours’ sleep
Forex trading can be exhausting. Depending on your trading style, watching charts all day long can take a heavy toll on your body. Make sure to take occasional breaks from your trading desk or hit the gym after a long day of trading so as to reenergise yourself for the next session. In addition, you should get at least 7 hours of quality sleep after a long day; your eyes will be thankful for that after a long day of following exchange rates tick by tick.
If, after trying these suggestions, you still feel tired after a long trading day, consider changing your trading style to one that requires less screen time. For example, replace your scalping trades with swing trades, which take days to form and have higher-profit targets. Changing your trading style impacts the amount of time you spend in front of your screen.
2) Prepare for your trading day the night or week before
Your next trading day doesn’t start in the morning, but the night before. At the end of your trading day, take a look and jot down the main news releases scheduled for tomorrow that are relevant to the currencies on which you have open positions. Unexpected numbers may have a direct impact on your open trades and you need to take them into account and manage your trades accordingly. I usually read a few reports from Bloomberg or Reuters after a trading day ends so that I’m always up to date with all market movers.
Of course, this can also be done for the week ahead. With the close of the New York session on Friday, you have the whole weekend to analyse the next week, read various reports, and look for potential trading opportunities once the next trading week opens with the bell in Sydney. Many Forex-related websites also publish market overviews for the coming week, which contain the main releases and trade setups for the days to come. You can also go through a few currency pairs yourself, and perform a multiple timeframe analyses to spot any trading opportunities you might have missed. Start with the weekly timeframe to get an overall picture of the trend and work your way to lower timeframes for potential entry points.
3) Make constant improvements to your trading strategy
As a Forex trader, your trading strategy is arguably your most effective weapon (besides having a well-rounded trading plan, of which your strategy is a part).
The first step is to find a trading strategy that suits your trading style. A common mistake that traders make is to jump from one strategy to another, without taking the time to get familiar with all of their pros and cons. Remember; there is no strategy that is 100% profitable, it’s rather the intricacies of trading, as well as money and risk management that distinguish profitable traders from unprofitable ones.
Secondly, be aware that not all trading strategies are effective for the same market environment. Trend-following strategies may work well with trending markets, but create false signals in ranging ones. The same applies for strategies that work well in ranging markets but don’t return the same results in trending ones.
Even if you’re comfortable with your current strategy, there is always room for improvement. For example, I spend some of my free time fine-tuning my entry and exit triggers and backwards testing some trading ideas. If you use MetaTrader as your trading platform, there is an easy way to do this; scroll your chart to some point in the past and press F12 to move forward bar by bar.
In addition, keeping a trading journal also helps tremendously with spotting any weaknesses in your trading strategy and improving them. You should regularly look at your journal entries retrospectively to identify trading patterns that caused winning or losing trades.
4) Love the discipline of routine
Trading is all about discipline, and you can’t be disciplined without routine. Just like there’s no athlete at the Olympic Games without years of disciplined training, there is no successful Forex trader that isn’t disciplined in following their trading strategy, including risk and money management, as well as analysing the market and controlling their emotions.
It takes 21 days of repeatedly performing the same action to form a new habit out of it. So, if you feel that you still haven’t found your routine in trading, spend a month trading on the advice of this article and you should be fine.
5) Get help from other traders and change your perspective
Everything is easier when done in a group. Forex trading can sometimes be a lonely activity, with only you and your charts involved. However, you don’t have to go through this journey alone. There are many traders on the market who want to share their trading ideas with the world. I love the Forex market for this very reason. A simple Google search will reveal dozens of websites dedicated to connecting Forex traders through forums or online charting platforms. They helped me a lot in my early days as a trader and I am still an active member on some of them.
Take advantage of the synergetic effects of joining a group of fellow traders and discuss your trading ideas with them. It will make a huge difference to your trading confidence and how you perceive the market. However, don’t blindly follow all the advice you read on the Internet. Instead, form your own view of the markets and use the help of other traders to inform that view and see the market from a different perspective to your own.