In last week’s Pipsychology article, I discussed the three most overlooked risks in forex trading, one of which is the risk of boredom.
Nobody is immune to trading boredom. Newbie and expert traders alike can find themselves bored with trading when there’s very little movement in the markets or when they feel that their trading routine has become monotonous.
1. Remind yourself that it’s part of the plan.
When you’ve backtested a bajillion trades or reviewed a thousand charts in deliberate practice, you can’t help but compare how different your current trading feels from the time you started out. Remember when you placed your very first trade and you felt the butterflies in your tummy as you watched price tick up and down?
As you progress in your trading career, the daily routine of analyzing the markets and reviewing your trades no longer carries as much excitement. And you know what? That’s okay. It’s all part of the plan.
When you find yourself thinking that following your trading plan day-in and day-out is boring activity, remind yourself that you are in the grind for the profits and not for the excitement. There will definitely be times when your trade plan doesn’t generate as much setups in a particular market environment so you will just have to be patient enough to wait.
If the trade isn’t there, it simply isn’t there. There’s no need to force trades for the sheer thrill of it.
2. Keep things in perspective.
Imagine the following scenarios.
Scenario A: You decide to trade the U.S. NFP report, which is notorious for wild swings in the markets. The report shows that more jobs were added than anticipated, so you decide to buy the dollar (short EUR/USD).
You enter at market and, true enough, EUR/USD shoots down 80 pips. You think you’re the man since you got it right and now you can make it rain like Floyd Mayweather. A few minutes later though, the market shifts, and we see price action skyrocket! From being up 80 pips, you are now down 100 pips, and price is quickly approaching your stop loss.
Just when you’re about to close your position, price once again reverses and puts you back in the black. You decide that enough is enough so you close your position, up by a decent 40 pips.
Scenario B: Volatility has grinded to a halt, as it’s the summer season. The pair you love to trade, EUR/USD, has been trading in an average range of 30 pips. You decide that scalping is the way to go, as the pair has been stuck in consolidation.
You take a few currency trades here and there, playing support and resistance. While you get hit on some trades, you also hit some winners, and by the end of the day, you come home with a respectable 40 pips.
Which scenario would you prefer to be in?
Scenario A is definitely more exciting, as you get to see those wild swings in the market. Who doesn’t love volatility?! Just keep in mind that price action can swing both ways and, if you aren’t in control of your trade, you may let emotions affect your trading.
In Scenario B, price action is pretty tight, but you’re able to scalp your way to a few pips here and there. By the end of the day, you still come out a winner.
The point I’m trying to make is that you have to keep things in perspective. Forex trading is a grind and you have to be mentally prepared to deal with whatever the market throws at you, whether its high volatility or tight trading. Just know that it is still possible to make pips even in a very “boring” market.
3. Expand your horizons.
The markets too slow for your fancy? Then make use of the downtime to educate yourself!
Go online and go through forex forums! Join Twitter and follow other traders! Join a Facebook group! Read a book on Elliot Wave Theory! Backtest a mechanical system or read up on other types of indicators! Learn how to make an expert advisor!
Time is very crucial and it’s the ultimate equalizer. If the market isn’t moving, don’t think your time is dead. Instead, make better use of it.
If you’re scared that you’ll potentially miss out on some moves, then download alert tools that will inform you of groundbreaking news or if price action is suddenly moving. If and when this happens, you should always have a plan to adjust for it already in place. If price action is too crazy, don’t jump in blind! Take the time to survey the action and find out what’s going on.
These are just a few tips for those of you who get bored by trading. For those of you who’ve experienced the boredom rut but were able to climb out of it, what other suggestions can you give to your fellow currency traders so they can avoid boredom as well?