An experienced trader takes a minimalistic approach and seeks to spend as little time as possible on Forex. The advantage of this method is that you can earn enough money in the market to support yourself, your family, and even start your own business that will bring you real pleasure.
Among other Forex benefits, the brokers highlight the possibility of trading on the go. However, only with a moderate approach to trading, you can actually use this advantage. With the right choice of trading style, you can spend by the charts just an hour or two a day. A quick glance at the phone will be enough for you to assess the market situation and check your trades. The rest of the time you can spend on the activities you really like.
Today I’ll give you several tips to manage your time on your own and harmoniously combine Forex with your daily life.
Choose Low-Frequency Styles
The trading style with long-term and low-frequency transactions will actually allow you to open a trade and relax while the market does the rest:
- Swing trading
- Position trading
Such traders hold their positions for several days or even weeks. They open new trades at most 1 time a day. If they don’t find a suitable trading setup at first glance, they just close the charts and wait till the next day.
Low-frequency trading has several advantages:
- Lots of free time
- The risk level is lower than with intraday trading
- Low transaction costs (saving on a spread)
- Higher outcome percentage from each trade
Use Higher Timeframes
You will need high timeframes for successful low-frequency trading:
- 4-hour
- Daily
- Weekly
Higher timeframes have their advantages over lower ones:
- The major trend is more clear
- The chart has much less market noise and false signals
When trading on high timeframes, you can log into your account only once or two a day to find a suitable trading setup or check your open positions. And this has to be done much less often than with intraday trading on the H1 chart.
Give Your Trades Some Space
At high timeframes, the market behaves more predictably. You can accurately determine the major trend and have more chances to open a trade in the right direction. Yes, there are much fewer suitable swing and position trading setups than with intraday trading, but the risk is much lower and thus, you have better overall performance.
However, in order for your long-term transactions to bring tangible profits, they need to be allowed to have some space and breathe. It might be quite difficult to get used to this at first but you should learn to forget about your open positions till the next day. What will it give you?
- You can focus on other important things
- You are less likely to overtrade and get addicted to Forex (which is quite common)
- Your stress level will decrease as you will think less about your trades
In order to make it easier for you to cope with it, make sure to use Stop Loss to control potential losses and Take Profit to protect your profits.
Use Minimalistic Approach
On Forex, there is a rule "less equals more." You should focus on the quality of your transactions, not quantity. If today you couldn’t find a suitable trade from the first sight, close the chart and return to it tomorrow. It is better to open 1 profitable trade in two days than to open dubious positions daily.
In addition, the less you load your brain, the more time it has to analyze and process the information received. You will not be able to work around the clock at the maximum level. Trading only an hour or two a day, you will make more quality efforts.
Basic Rules for Low-Frequency Trading
- Stick to the plan. You need everything to come to automatism when you quickly notice suitable setups or understand when to exit the trade. The only way to do this is to always follow your plan.
- End-of-day trading. For long-term positions, the optimal time to search for trading setups is the end of the American session. By this time, there is almost no market noise on the charts. You can clearly see the daily candle that you’ll use to open trades.
- Don’t clog the chart with indicators. When trading on a daily candle, you will practically not need additional methods to confirm your trade. Signals on high timeframes will be clear enough to make a well-considered trading decision.
- Set and forget. That’s what your trades need. Once you have opened a position according to your trading plan, forget about it. Return to it at the end of the next American session when you check your charts.
- Follow the risk management system. In order for you to safely leave your trades unattended, you need to be sure what to expect. Always use the basic rules on lot size, risk-to-reward ratio, and other irreplaceable aspects of risk management, including the setting of the SL and TP levels.
I hope that the advantages of low-frequency trading are now undeniable for you. With this approach, you can easily trade from anywhere in the world with Internet access. This will give you the freedom and financial independence that the Forex market is famous for.