Most who are new to forex trading often enquire about the best time to trade in forex and how to find time for regular market analysis. As stock trading is a full time profession, most people consider forex market to be a full time profession and feel the lack of time to analyze the market all day alongside their regular jobs. Most people however, aren’t aware of the simple fact that no matter how much you analyze the charts, you will not be able to predict the market’s behavior as unlike stock markets, independent traders only represent a small fraction of the total trade happening and can never hope to control its behavior. Now that you’re familiar with the reality, trading at the end of the day seems to be the most practical choice for all the independent traders. Here are a few reasons why trading end of the day is not practical but is one of the best strategies for success in forex.
1. Helps You Maintain Your Day Job
Despite of how much the various articles across the internet claim forex to be a good full time job option, the truth is quite the contrary. Unlike stock, forex trading doesn’t require all day analysis of the market and the various charts to predict the rise and fall of currency prices. The forex trading is more of a set- and-forget deal than making more trades. Even when statistically speaking, the low frequency traders make the most profits in the forex market.
2. Less Stress On Your Brain
Despite of its highly lucrative market, forex trading can lead to severe losses and should not be over practiced. Trading all day and analysing charts can lead several investors to over expect profits when in essence they are faced by unexpected losses. Most people make a big deal out of forex trading and spend countless hours watching the market hoping for a sign of movement. Taking profits on time and remained unscathed by emotions like temptations, fear and regret makes you more relaxed while trading in a fluctuating market like forex.
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3. More Effective Utilization Of Time
Trading during the intra-day period is not usually the best due to them containing a lot of useless clutter making smooth trading a big problem. The daily charts are more productive than the intra-day charts and through end of the day trading you are choosing the best time to trade and make profit. The daily charts allow for a better analysis of red signals than the useless intraday signals which can often confuse the newer and inexperienced trader.
4. Prevents You From Overtrading And Becoming A Market Slave
Newer traders often fall prey to the lucrative yet volatile forex market and it’s generally not long before they find themselves in forex gambling. It is true that most of us want to start forex trading to make humungous sums of profit; however, when faced with initial gains and subsequent losses, we fall prey to regret and temptation and overtrade our way into losses. Trading end of the day prevents you from overtrading and losing your hard earned money from your day job.
It often takes years of training and experience in order to make long term profits with full time forex trading. The above points exemplify the benefits of end of day trading should be followed in order for you to make profitable trades and fewer losses in the forex market. New day traders can benefit from trading first on demo accounts moving across to real trading accounts when they feel assured in the strategy. Either way, a correct day trading strategy, sensibly managing risk has been the hallmark of many successful forex traders.
Luke Peters is an active forex trader on several online forex trading platforms like Cornertrader.ch and is the current contributor for several websites and blogs related to finance, trading and marketing. He likes spending his free time reading and keeping up to date with the latest news in the global financial market.