Professional Forex day traders spend their hours watching the foreign exchange market, and the lifestyle is not for everyone. The commitment needs to be high and the lows can be low – but the returns can potentially be phenomenal. Take a look at a day in the life of a Forex day trader.
Choosing working hours
The foreign exchange market differs from the Australian share market in that it’s open 24 hours a day, 5.5 days a week. While that makes it practically impossible to keep an eye on things at all times, Australian day traders will pick the right trading times that work for them i.e. during the morning, afternoon or evening.. Some of the largest market fluctuations occur during the New York, London, European and Japanese sessions. In the local AEST time zone, the New York market opens at 10:00pm and closes at 6:00am, the London market comes online at 5:00pm and closes at 1:00am, the European (German) market opens at 4:00pm and closed at 12:00am and Tokyo is open 9:00am to 4:00pm locally, depending on daylight saving. Because it’s impossible to monitor all market changes and economic reports around the clock, many day traders will focus on a specific currency pair or region: for example trading while the US market is open or concentrating on Asian markets. Of particular interest will be the timing of any relevant key economic releases or central bank meetings.
Making initial assessments
A Forex trader’s ‘day’ begins with an assessment of what has altered since they last logged in, including getting familiar with any new economic reports and decisions that might affect the short-term movement of currency pairs. Depending on these changes the trader may ‘trade the news’, look at key technical levels on the charts, and if they have any open positions, adjust any stop losses and take profits appropriately in order to better control risk.
Keeping a trade journal
Many of the most successful day traders keep records of market conditions in a trading journal or spreadsheet. These help the trader to identify their patterns in behaviour as well as any trends that could be taken advantage of. As well as checking the markets throughout their working day, traders will brush up on trading strategies and keep a detailed record every time they enter or exit a trade.
Finishing up with a review
At the end of the trader’s working day they will generally leave no trades open overnight. Once all trades are closed, a final assessment helps the trader to review their performance over the day and identify any important meeting times for the next day. This is also a good chance to look over currency pairs that they may not have looked at that day, in case there are opportunities to be taken the next day.
Maintaining a lifestyle
It can be tempting for a day trader to keep trading into the late night or from the early morning, but it’s also worth establishing a special focus in order to maintain a healthy routine. Depending on their chosen markets of focus, traders will fill their remaining hours with sleep, leisure and catching up with loved ones.
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