Updated from its original posting on 2012-09-21
While I’m a big fan of allotting time and effort to improving your trading strategies, I also believe that too much trading could do you more harm than good. For one, few people are able to sustain the level of focus needed to trade forex for hours upon hours a day, everyday; mental fatigue will set in. Forcing yourself to analyze the currency markets and making more trades when you’re not completely focused could cost you some of your carefully planned trades.
On top of that, working long hours can be bad for your health. Studies have shown that chronic stress (the type that can be caused by excessive work hours) can lead to heart disease. Now, you wouldn’t want that, right? What’s the point of all that hard work and long hours if you won’t be able to enjoy the fruits of your labor?
Having life outside of trading also reminds you that trading is a profession. This can help you become more emotionally-detached to the outcome of your trades, which is important for making good trading decisions.
For many forex traders, achieving a work-life balance is especially difficult. Unlike stock trading, almost ALL major news can affect currencies. It’s hard not to discuss the constant rain in the U.K. without wondering how much it will affect retail sales. Suddenly you may find yourself checking your open position on GBP/USD at 4 o’ clock in the morning!
Work-life balance can also get out of whack for those who set up their office at home. The convenience of being able to take naps in your comfortable bed whenever you like can be a challenge. Some days you’ll be fighting the urge to take break from the markets knowing that it is open 24/7, and other days you’ll be doing all you can to ignore that alarm clock to spend another 5, 10, or 55 minutes in that cozy bed of yours.
Achieving a work-life balance might be difficult, but it’s certainly not impossible. Here are a few tips that might help:
1. Learn to prioritize.
Identify your priorities and make your time management decisions based on those. Determine how much you value your trading over your personal life.
Can you check your forex trades at the dinner table without getting in trouble with your wife? Are you comfortable with rejecting nights out with friends in favor of your trades? Or are you the type who can easily walk away from the charts?
2. Set a schedule.
Once you have identified how much trading you want to handle in a day, you should establish a schedule to make room for your pre-market preparations, your actual trading hours, and of course, your trade journaling sessions.
3. Know when to stop.
It’s also important to draw the line on when to call it a day. Whether it’s the number of your trades, a certain win or loss percentage, or the end of a trading session, you have to know when to stop. It doesn’t matter what kind of schedule you make as long as you STICK TO IT.
If you’re having trouble sticking to your new schedule, then you could try organizing or participating in activities outside of trading. Join your friends, a book club, sign up for a gym membership or take dance lessons. Anything to get you out of your trading chair!
Again, remember that trading is also a profession. Sure, it requires passion, effort, and a lot of work. But in order to keep you on top of your game, you also have to take a break from it every now and then to rest, recharge and get your focus back.