Forex trading is usually considered a very strenuous activity for the individual, but most traders say that they feel quite relaxed most of the time. In order to clear up some misconceptions about forex trading in general, it’s a good idea to look at it the way a daily forex trader looks at it.
It’s quite easy to believe that a forex trader is this towering man or woman in a suit or business dress answering 100 calls a minute and looking at hundreds of charts at the same time. But the reality is a lot less “glamorous” so to say.
The average forex trader is a person in his or her pajamas in their room looking at one chart and sweating for the whole day because they’re not sure about the trade they just made. Let’s discuss how an average day looks like for this person.
In the morning the most common thing to do for a forex trader is to have breakfast. I’m just kidding. The most common morning routine for forex traders is news analysis. Most of these people are subscribed to large news websites and magazines in order to receive the freshest information first thing in the morning.
Once this information is received, a forex trader is ready to start thinking about the day’s strategy. Usually, the news is what determines whether the trades on that day will be going short or long.
The fun part is that news analysis just does not stop all day. There is always something new happening somewhere in the world, which means the traders need to always keep up. For example, when the first orders about a lockdown in the United States started to flare up, only in the morning did forex trading in the UK skyrocket due to the time difference (most traders were sleeping).
Once the forex trader has had lunch and has heard most of the important news, it is time to start planning the strategy. You see, Forex is not the kind of market where the same strategy would work all the time. The market is constantly changing and therefore, the strategies need to change along with it.
Setting the strategy usually requires hours upon hours, but that is exactly what a forex trader has.
Once the strategy is in place and the target asset has been chosen it’s usually already evening, meaning that the trader is ready to enter the market.
In the evening, we see the first trades start to be opened from the trader’s side. All of the calculations and planning has already been done, therefore there is very little reason to remain at the station. This is usually when the traders get up and take their well-deserved break. This is usually around 6-7 PM.
At midnight, or at any time past 11 PM, the traders will most likely try and adjust some of their trades if they want to pay the extra overnight fee of course. But if they don’t want to pay extra they will start closing, especially if it’s Friday night. Forex trading pretty much comes to a halt during the weekends and having the trade float around in that market is usually not a good idea.
Therefore, it’s likely to see these traders at their stations in the middle of the night, trying to figure out which trades to close and which ones to extend.