Forex trading, even when done on a full-time basis, demands a lot of time and mental and physical energy. It’s equivalent to a brand new job or the new “thing” you decide to spend your life doing. For some, it’s your first time really exposed to this industry, let alone anything investing related. Sure, you’ve done the 401K thing at work, but that was multiple-choice. You do your best to read and learn everything you can get your hands on, when you have the time. Many beginners, however, underestimate just how much there is to learn about the markets, indicators, and economics in general. And get information overload from Day 1.
And lets be realistic – most of you aren’t trading full-time. You’ve got a “day” job and more than likely a family to manage. Your trading consists of the few hours during the week and weekend when you can get away from your hectic life and focus on all things Forex. To help yourself, many of you start your trading day (or night) by formulating a To-Do or Action Items list.
You write out all the things you expect to get done by the end of the night, next week, and next month. You have some things that need immediate attention – those you’ll tackle today. There are some things that need to get done now, but they’re very time consuming – you’ll try to fit those in today. Finally, you list the “wants – not needs” that aren’t critical at this very moment, but are still important enough to eventually need completing.
You start on the first task, usually something quick and easy – sharpen a box of new pencils, install a new trading software platform, or peruse the beginner’s forums. You complete the small task with lightning quickness and you move on to the next task that also needs immediate attention. Halfway through the next task, the phone rings.
“Hey, Mom. What a surprise!” Geez, we just talked last week. “Sure, I always have time.”
45 minutes later you’re off the phone and back to work. “Wow,” you exclaim to yourself. “Where’s the day going?” So, you get back on task and back to what you were doing. An hour or so later you’ve satisfied your immediate worries/tasks and you’re on to one of the more important ones – like familiarizing yourself with Japanese Candlesticks at your most favorite and oh-so-funny Forex web site.
“Oh, this won’t take too long. Candlesticks sound easy.”
But do you ever get through an hour of learning candles? Nope, usually because the phone rings, or you feel the need to check your email, or the kids come a screaming about after school sports, or the boss calls needing a revision of the TPS report immediately, or dinner needs cooking, or something. The corporate world calls it “fire fighting,” or “putting out fires.” You’ve got your daily task list, but unforeseen “fires” erupt and need immediate attention. You’re taken away from the current work load, breaking your focus and momentum. For others (myself included), not effectively managing all the items on our plate gets us into trouble. And this could be due to distraction (like the 18 hours of Law and Order televised daily, or the season premiere of American Idol), procrastination or just pure pressure to meet a deadline.
We need help!
Effective time management skills and having realistic expectations both play an important role in your trading development. A trading strategy has to be well planned, which usually mean hours spent reading journals, examining financial reports, and deciphering charts. And while the experience and knowledge you gain from doing each one of these tasks does play a role in the success of your trading plan, you’ll soon realize that it gets tough spending too much time completing each one. With the recent discovery that a typical day only comprises of 24 hours, science tells you that you can only do what you have time to do, and your time is up! Your body is next to respond to your nonstop need for production by shutting down completely. Your body will only expend as much energy as you give it before needing a recharge. Unless, of course, you’re a robot!
Expectation is important to keep under control because expectation can work for you or against you. Expectations set too high do a great job at creating pressure. When you’re already burdened with too much to do and then pressured on top of that, anxiety kicks in and takes over your spin. You sit there biting your nails, thinking off all the things that need to get done…. yesterday, and nothing gets done! I know you really think you can back-test your latest trading strategy for the past 30 years and read the most recently released market reports from all world banks before lunch, but a lowering of your expectations is in order. Putting too much pressure on yourself to get something or many things done will only lead to more stress on your mind and body. Be realistic in your approach and expectation, and you’ll see the difference in your productivity.
“Why don’t you go do something productive with yourself,” yelled my mother so lovingly, right before she chased be away from the television with her slipper.
How do you determine how much time to spend on formulating a trade or strategy? Honestly, there isn’t one right answer. You’ve just got to be realistic about the time you have available to spend on the trade. Sure, reading ten trading books is beneficial to your learning, but reading them all at the same time doesn’t work for most. You must realize your currently work load and prioritize those things that will be the most beneficial to your learning at that moment.
Which trading ideas or strategies do you follow? Many times you put together a great strategy that is highly successful but the prep time is mind-boggling. You have another strategy that doesn’t return as well but is easier to execute. It’s a balancing act where you have to decide whether dedicating large amounts of time to high ROI trades is worth it. The clock is definitely your enemy when you’re just getting started in Forex. But getting more trades under your belt will be more beneficial to your experience in the long run.
There are only so many hours in the day for you to work with. That makes time a valuable commodity. Make a conscious effort when creating goals and timelines to be realistic about the amount of work needed to fulfill those goals and the amount of time you have to spend to complete those goals. Profitable trades don’t only happen to perfectionist and those traders who spend every waking hour researching and testing. It is sometimes necessary to bring things into focus and down to eye level, out of the clouds. You can keep that big picture in your wallet, but remember not to place the bar too high that it can’t be reached. Prioritize the tasks that will be most beneficial to your learning and keep things simple. In the end, success will only be another trade away.