How Often Should You Trade?
Many people learning to trade get in trouble because they have the mistaken impression that they have to trade every day. The truth is you should not trade unless the trade set-up you are considering is outlined ahead of time in your trading plan and you are comfortable from both a risk/reward, and timing standpoint. You also need to be comfortable with the current market environment. By environment I mean current price pattern, structure – also known as support and resistance – and volatility. Today I passed on a long trade in EURUSD because the timing was off – the trade signaled around noon EDT which is too late for me –and I was not comfortable with the higher volatility we have been seeing across the board in the currencies.
In the end the decision to trade is going to be on you alone, and you must accept the risk on the trade ahead of time. If you do not consciously accept the risk you will likely find a way to mismanage the trade and exit too early.
You also do not want to let your work ethic work against you. While it is true that when you show up for your day job you should expect to work, regardless of whether it’s your company, or you work for someone else. This attitude can work against you as a trader however, because you will think that just because you are sitting in front of your trading screen and analyzing markets that you need to trade. You do not. You should only trade when all the conditions outlined in your trading plan are in your favor.
To attend a live, interactive demonstration on how we use price to determine market direction on all time frames click on Directional Line Overview
Jay Norris is host of Live Market Exercise at Clovernest.com
To win a $3,499 scholarship, courtesy of Trading University in Chicago click on: Trading-U Scholarship
DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor!
