Most of traders who first started their trading career still have a regular job during the day or run businesses of some form. Let’s face the fact for those who have a regular job, your boss is paying you your monthly salary, so it is only fair that you should give him your undivided attention on your work. As for those who own businesses, your workers need your leadership to steer the ship. So regardless of what job, career or business you might have, it probably consumes most of your available free time each day leaving you a small window to look at the market every day. Furthermore markets do not open during the weekends, so that would not help either.
In this article, I would like to address the issue of working and trading. Like everyone else, I too had manage my time during the early days when I started trading. I also had to take care of my new born daughter to boot. Like everyone else who is new to the trading arena, you probably need to spend more time at first to get use to the trading nuances and chart reading. Eventually it would take 30 minutes to 1 hour of your time a day, MAX!
How did I do it
First of all I would recommend you have to change your analysis into daily time frames. Automatically this would reduce your dependence to monitor your trades constantly. I trade mostly the Forex and Commodity market as I come from a place which does not give conducive trading hours for the US equity market. The Forex market opens each day in Asia and Australia and ends the day in New York, at 5pm New York time. There is a saying you probably must have already heard, “the noobs open the market and the experts close the market”. In my trading methodology, the closing price is the most important price on any price bar on any time frame. Why you may ask? This is because the closing price simply tells you who won the price war for the particular period, the bull or the bear.
At the end of the trading day in New York, the closing price would provide us this vital piece of information and we use it to understand price action especially when it reacts to the established support and resistance areas. Once you are used to see the price action, all you have to do is analyze the trading instruments each day after they have closed and make your trading decisions accordingly. Another good point trading the daily time frame is that the support and resistance do not change often compared to the lower time frames. This type of market study does not take up more than 1 hours or even 30 minutes. It’s a matter of just getting used to it.
The risk of trading smaller time frames
I usually ask my traders this question when they ask me if they could trade smaller time frames. My answer is YES, however he or she has to think, if one crosses the road once a day versus one who crosses the road a hundred times a day. Which one has a higher percentage of getting knocked down by a car. The trader who crosses a hundred times a day. So if one wants to trade smaller time frames, off course there would be much more trades and off course they will have to deal with more losing trades than the person trading the daily time frame. So are you really missing out on anything important if you ignore trading lower time frames? No, you are not, in fact what you are missing out is stress, over trading and more losing trades. I have no problem to miss it. Most of times, it is the greed and fear and a need to make money all the time that makes us want to trade more.
Just today, I took profit from my AUDUSD long term sell trade. On how I came to my conclusion to short this trade, please click here. This trade netted me a whopping 722 pips. It took me 47 trading days to achieve the 722 pips. That’s an average of 15.4 pips a day. Most intraday trading techniques I know net traders anywhere from 5 – 20 pips per day. To get the 722 pips, the trader has to win 47 times consecutively. Any losses, then the number of trades would have to be increased. SO let’s say, the traders manages to do it. Let us just then compare what I manage to complete during this period. I manage to go work on my charity projects in another country. Have a stress free relaxing period of time. scalping whenever time permits and have time with my family and friends.
So trading the closing prices is a much better way to trade. It almost seems too good to be true but I promise you it’s not , if you learn to properly take advantage of it. For many classes, I proved theoretically that once can make 1000 pips per pair each year and by monitoring 10 pairs a year, we could make 10000 (10 thousand) pips or more each year. Now I am able to show the live account of step by step process how this trade came into fruition. Your day job or business should be viewed as a good thing, not an inconvenience or impediment to your trading activities as many traders falsely believe.
Does this mean I should not do intraday trading?
Of course not! You can always do intraday trading. I am just telling the facts that intraday involves more time monitoring prices. Your brain has to be in tip top condition to read the prices. So if you are up to it, by all means, have a go. What I am saying is that you can always have an option to rest from the stress and do only longer term trades.
Most traders trade way too much and this is the cause of their accounts imploding. Sometimes, traders go through a losing streak and they develop a frantic and frustrated mindset. This is a vicious, self defeating cycle that becomes worse the more you do it.
How to trade around your job
Let’s have a look at the sample trading routine about analyzing market and trading which fits around your current daily schedule:
6:00am – Scan the market in the morning before you leave for work. Don’t do it straight our from bed. Your mind might not have the time to think properly yet. Look especially at trades which you think have setup the night before. Enter your pending trades.
12.00pm – It is your lunch time. See if your trades were executed. Make the changes if necessary.
9.00pm – After you have arrived home from work and had your dinner / gotten comfortable, you can trade the US market opening hours which is usually volatile and good for scalping. Once you are done, scan the market again for the long term trades which might setup the next day or manage your current trades.
This is an example of how a more relaxed trading style. However do remember that this method could be executed once you have a solid understanding on how to trade with price action.