Patience is key in forex trading
This week I have been sitting on my hands, figuratively speaking of course. And it made me think about the value of patience in forex trading. Being a professional trader requires a certain amount of patience and self-control. Or simply: patience is key in forex trading
How long does a forex trade take?
The duration of a trade really depends on the type of trader you are therefore your style of trading should be adjusted to your preferences and trading hours.
Scaping: The shortest trades are scaping trades. A scalping trader gets in and out in sometimes less than 10 seconds.
Traders with a scaping strategy needs to be present at there screen all the time and will probably not hold a position over night or over the weekend.
The next group of forex traders are daytraders. Daytraders generally get in en out of a trade within a day. And like me, I’m a partial daytrader, they might hold one or two trades over night or even over the weekend, simply because those trades haven’t taken profit yet.
Forex daytraders trade the 60 minute charts and sometimes the 240 minute charts. This means that the candlestick is formed in 60 minute or 240 minutes.
No these aren’t the dancer-type traders ;-). Swing traders hold positions over a longer period of time (days to months) and they trade 240 minute and day or month charts.
Like me, a lot of traders combine trading day and swing positions.
Trading forex: patience needed
I was in two trades on the eur/jpy for 10 days in a row and they were both on a loss and about to hit my stoploss.
These trades started off as daytrades, on the 60 minute chart and therefore I was expecting them to hit take profit (or stoploss) in about a day.
Boy was I wrong!
Patience is key in forex trading. WHY?
My forex trader patience was tested for a bit. The trades remained at a loss for 10 days in a row and if I would have been a rookie (beginner) trader, I would for sure have at least thought about exiting the trades early.
That wasn’t in my trading plan of course (it never was) and after 2 years I have found the patience to sit still and wait.
Trading plan: wait for it!
These kind of situations are why an extensive trading plan is important a long with good backtesting.
A good trading plan will keep you in your trades, prevent early exits and backtesting results will keep your spirits up. Especially when trades seems to go down the drain.
I was, while waiting, looking for a reason why my trades took so long. The price kept nearing my stoploss but never really made it there. The resistance level was strong and there was also barely any trading volume which results in a ringing or consolidated market.
Consolidation means that the price of a forex pair goes up and down. Consolidation happens often between two major support and resistances levels and price doesn’t really move beyond it. No trend and no real direction.
No trend? No forex trades?
You might think that if there isn’t a trend, there aren’t any trades to take but consolidation breeds patterns and for me, a pattern trader, that means there is enough to do!
So what happened to your trades?
Well, while writing this blog on day 11 the trades are on a small 20 pip profit. So the wait continues. Me and my tradingplan stay strong! Patience is key in forex trading 🙂
This weekend a bit of positive Brexit news was released and it sent my eur/jpy trades back in to a loss. It’s save to say that I don’t know for sure that the brexit news affected my trades but it’s one explanation. I wrote a blog earlier about brexit news and how it affects trading forex. You can find it here.