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Here's How a Typical Day of a Forex Day Trader Looks Like

1:18 PM May 20, 2020
278
Forex trading

Due to dishonest advertising, many have the wrong impression that currency traders do whatever they want, and whenever they want. It's a delusion. Any successful trader has an accurate trading routine and a detailed plan that he strictly follows.

The routine of market participants differs depending on their trading style. Today we will look at a typical schedule of a day trader. This way, it will be easier for you to implement the required actions to your daily plan.

Morning

A day trader always starts by scanning the night market. He looks for sharp fluctuations and studies the world events that could provoke such movements.

After assessing the market condition, the day trader needs to check the economic calendar for important news. You should mark the time and events that will occur during the day in order to be ready to respond to them. The reaction to the news depends on the news trading strategy that you have chosen:

  • Avoiding the market during news releases
  • Trading prior to the event according to forecasts
  • Trading immediately after the release of data
  • Trading on price action after the sharpest fluctuations

In addition, many day traders check the current market sentiment using currency strength indicators. Sometimes, such information helps assess the mood of the market until the end of the day.

When the preparation is finished, the trader proceeds to trade opening. He looks at the market again searching for suitable trading setups that depend on the trading strategy:

  • Pullbacks to an important price level
  • Breakouts through a key level
  • Candlestick patterns, etc.

In case of a good setup, the trader finds confirmation of the signal, checks the transaction for full compliance with his risk management system, and sets an order. For successful trading, you must fulfill all the conditions of your trading plan before opening any trade.

An experienced trader also knows that there is not necessarily a suitable trading setup in the market. If you didn’t see it at first glance at the chart then you should wait for a better moment.

In addition, depending on the trading strategy, many day traders place pending orders. For example, if they notice the breakout signals on the chart that have not been confirmed yet, then they can place a Buy Stop or Sell Stop order, depending on the direction of the price movement.

Day

If you correctly use Stop Loss, then you don’t have to constantly monitor your open positions. Nevertheless, if the trade has been going against your direction for an hour, consider closing it. The chance of a price reversal, in this case, is much lower than closing by a Stop Loss. So, it’s better to close the trade with less loss and look for new trading setups.

If some important news comes out during the day then you should take actions that are appropriate to your news trading strategy.

In addition, you can open additional orders if you notice promising trading setups. A quick look at the market will not take much time but it can help you make money in the afternoon. Moreover, the most favorable trading time is the intersection of the European and American sessions, due to high liquidity.

You can check your positions several times during the day. However, don’t constantly monitor the charts. This can lead to anxiety and overtrading.

Evening

Time to close all open positions. It doesn’t matter whether they are profitable or not. Don’t be upset if you have suffered losses. Only your overall trading performance is relevant.

You should also prepare for the next trading day and view the current market situation. Some traders note important trading signals that may affect the quotes in order to pay attention to them in the morning.

As a rule, most day traders spend in front of the charts about an hour in the morning, around an hour during the day, and half an hour in the evening. Beginner traders may take longer. Professional traders might need less.

Well, now you have an idea of ​​a typical schedule of a day trader. This will help you build your plan and fit it into your daily life.

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