By Your Trading Mentor
NEW TRADER SYNDROME
As a forex trading mentor I often find newer traders struggle with the fact that they don’t know how much they are going to make each day and that some days there may be no opportunities at all. I call this New Trader Syndrome. People start trading forex often because they are tired and stressed and over worked in their current job, often feeling undervalued and under paid. They decide they are going to turn their life around and become a forex trader, only working for ten minutes a day and making thousands of pounds in that ten minutes, then the rest of the day will be spent at the beach or on their luxury yacht. They are then very disappointed when, after 3 months of learning to trade the financial markets, this isn’t the reality.
Apart from the time scale of this fantasy being a bit far fetched (give it at least 10 years before you feel disappointed, not three months) the other issue is that new traders are often so used to getting a set salary for having to work a set amount of days and this can be broken down into a certain amount of hours which need to worked with specific KPI’s for annual bonuses. Trading isn’t quite like this. Some days there are no opportunities at all and if you try and force them you can end up losing money. That’s right, you can work all day and actually LOSE money!! I understand why this sounds horrific, because it is horrific. But it’s also the reality of trading which is a high risk, high reward venture.
HIGH RISK IS NOT FOR EVERYONE
As you may have read in some of my previous blog posts I’m studying towards my DipFA which means hopefully in 2024 I’ll be able to work as a financial advisor in the UK as well as being a forex trading mentor. But one thing which I feel is coming up a lot in my studying is risk appetite and attitude towards risk as well as the different styles of investing relating to risk and the order in which you should be prioritising these. To cut a long story short, high risk, high reward investment styles like forex trading should only really be done when all other areas are covered AND you have excess surplus income PLUS a high risk tolerance. Which means you would be sensible to keep the day job going for a while after starting your forex trading journey.
SO HOW OFTEN DO I ACTUALLY GET TRADING OPPORTUNITIES IN FOREX?
Having said all of this to answer your original question of ‘how often do you get good forex trading opportunities’ the answer really depends on what markets you are trading and the strategies which you trade. I teach four strategies as part of the basic package in Trading Angel’s Mentorship Programme and while this might sound like a lot it covers a few basis which opens up your opportunities to look for trades. The majority of my bottom line is made up of momentum trades which I see frequently (I’d say a few times a week) whereas I only see a few good breakout trades a month. So having the option to look for different sets ups and types of trade helps to increase your chance of finding a good trade. Also the amount of time you put into your trading will make a big difference to how many opportunities you find. If you sit at your trading desk for ten hours every day and stay focused then you are undoubtably going to see more opportunities to trade then if you stubbornly stick to your ten minute a day yacht and beach plan. Believe it or not trading forex is similar to many other jobs in the sense that you often get out of it what you put in. I’m fully aware that if I was willing to wake up at 5AM every morning I would get more trades in because I would catch that 6AM candle close on the 4H chart. I often get to my trading desk at 8AM and realise I missed opportunities while I was sleeping. But I’m just not in the 5AM club and I’ve come to accept that. I’m more of 7AM kinda girl who needs at least two coffees and a shower before I can think straight.
GOOD NEWS IF YOU FOLLOW THE NEWS
But the bottom line which no one wants to hear when they first start trading forex is that – unfortunately you can put in all of the work and some days there really are just no good opportunities and the best thing you can do is to accept this rather then to start forcing trades which aren’t there thinking you have to make a certain amount of money each day. Sometimes in the lead up to big economical news releases you might notice that the markets are moving a bit slow and sideways (otherwise known as in a range) you will often find that they can then breakout into nice trends following the news releases.
So if you really want to increase your chances of seeing good trading opportunities and making the most of them when they arise, my best advise would be to study your economical calendar and the news releases which make the biggest impact on the markets (interest rates decisions, CPI and NFP are some of my favourites) and rather then getting stressed at how little the market is moving before the data is released, you can be prepared to react to any big breakouts once it has happened. Although I would avoid trading immediately after any news releases as there is often market whipsawing.
And most importantly and for the final time, it’s always better to stay out of a market then to force trades which aren’t there
Love from your Trading Mentor x