Trading Forex Can’t Be a Part-Time Job
June 1, 2008 by Trader Rich
Trading forex takes a lot of commitment and unfortunately in May I lacked it. I paid for this dearly with my worst month in a long time, losing 10% of my equity. While this is disappointing, it’s understandable. On the surface, I didn’t step outside of my trading or money management plan yet what I did was plain reckless. I traded sporadically throughout the month, watching the market and opening positions some days and ignoring the market altogether other days. Trading strategies are meant to be followed. While trading sporadically could have just as easily put me up 10% instead of down, the point is that if you have confidence in your strategy, each and every signal should be acted upon. In doing so, a balance can be obtained. On the days that I ignored the market, I could have possibly profited by opening a position. I only opened 8 positions this month compared to my average of about 20-22. Typically I’ll open a position each and every day but look at the dates of my last 7 losses:
May 7, May 13, May 14, May 15, May 16, May 27
There are huge gaps here where trades could have been profitable. I would have most likely had losses also but there is no balance here and that’s the problem.
So the bottom line is that trading forex cannot be a part-time job. I’ve treated it as such this month and it hurt me. The great thing is that I don’t have to go back to the drawing board or work hard to find out what’s wrong. In June, the solution is to follow the market each and every day and follow my trading plan.
So this ought to be a lesson to all of you traders. Remain consistent or face the consequences of losing a majority of the profit you made the previous 4 months. Out of the 80 or so trades I made between January and April, seven inconsistently spaced trading days in May wiped out most of my profit.
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I agree with you 100% rich. I have the same exact problem you have where i dont take all the trades and that creates an imbalance which leaves me in the negative because the trade i take end up loosing or winning very little.
Just though i’d let u kno that ur not alone in this experience.
Just keep pressing on, trust me rich, we are @ the brink of our success.
Yes, it is correct, I had open a mini account with fxcm early this year and it only last about 3 week then I got margin call. During trading time I can’t concentrate because of so tired, even worse the forex signal that I subscribe from acetrader is not working, they are always wrong about market.
This is a complicated issue — in my unsolicited opinion the problem faced by so many of us has to do with consistency, and not artificial time horizons. The full time/part time debate is important, but only when considering how consistent one is able to be with a coherent trading plan. If you’re trading plan puts impossible demands on your time and personality, change it. In my case, I had to move out to a longer time horizon to accomodate my other activities and my job. I do trade “part time”, but I am consistent with my plan. It’s also important to distinguish a trading time horizon vs. a chart time horizon…I refer to the former.
Take a look at the multi-asset class traders who trade stocks, bonds, options, index futures, commodities and spot FX. They do it all…so you could say they are part time traders in each of these classes. They can’t day trade all of these instruments. They trade on longer time horizons, allowing them to devote a slice of time to each instrument in their overall plan. It’s very similar to the above, in principle.
And then there are all of the profitable part time traders out there who are testaments to the fact that it is possible — although I don’t hear any of them saying it is easy.
Trade on old chap!
Some traders move down in their time horizon — trading only during a portion of one trading session, or during hours of overlap which are usually more volatile…but you guys already know all of this anyway. Just saying it *is* possible.