The Authority’ on Price Action Trading. In 2016, Nial won the Million Dollar Trader Competition. This article is going to challenge some of your beliefs about trading, especially to do forex trade beliefs you hold about how often you should trade and the consequences that your trading frequency can have on your forex trading account.
Professional traders view each interaction with the market through a realistic lens that does not filter out the risk involved with every potential setup, whereas amateur traders tend to think less about the risk involved and more about how much money they can make if XYZ happens. This is an important point to take into consideration before you enter your next trade. Professional traders are always aware of the dangers of trading too frequently, they know that it is a very short stretch from entering one too many trades to full-scale addiction to the forex market and to chart watching. This typically means that most professional traders are not day trading or scalping, instead they are focused on multi-day positions and look to take a good slice of the action that takes place in the market each week or month. Trading less frequently like this also makes you more immune to the slippery slope of over-trading.
Even if you are following an effective day-trading or scalping edge, when you trade with the high frequency demanded by day-trading and scalping strategies, you drastically increase the odds that you will give in to the ever-present temptation to jump into the market when your edge is not truly present. To understand why not being in the market is actually a lucrative position you have to look at it from a different perspective. The fact that most amateur traders simply do not even consider the fact that being flat the market is valuable is directly related to the fact that they simply do not believe the market is as risky as it actually is, or they simply ignore this reality. Professional traders are fully aware of the risk involved in the market, therefore they inherently understand the value in being flat the market, and thus they trade less frequently than amateurs. How does trade frequency relate to long-term trading performance and a trader’s mindset? Once you identify exactly what your trading edge is, and the market conditions that are best to trade it in, you can begin to trade with patience and precision because you now know EXACTLY what you are looking for in the market.
Due to the fact that professional traders have mastered their forex trading strategy, they trade less frequently than amateur traders because the pros are looking for a very specific event to occur in the market, rather than throwing darts in the dark like so many amateurs do. So, it almost goes without saying that once you totally mastered your trading edge, entering trades when your pre-defined edge is not present will have a negative effective on your long-term profitability. Traders who follow their trading strategy to the T actually enjoy the patience and the down time in between trades, it becomes routine and comfortable over time. So, how often DOES a professional trader trade?
There is obviously no set answer for the number of trades that professional traders make each month, as every trader is different. However, if you are currently losing money in the markets you can safely assume that professional traders are trading less frequently than you are. If you are currently stuck in a rut of over-trading, one thing you can do if you are not already, is switch to strictly trading off the daily charts. In conclusion, if you take nothing else away from this article, just remember that professional traders are on average trading less frequently than you are simply because they fully accept and understand the risk involved with any one trade, so this tells you that you need to reduce the frequency that you trade or that you interact with the market. Nial , you have spoken the truth . I have experienced the over trading .
Not all days are trade-able . You are the Best because not all coaches warn this syndrome effect of gambling vs trading. I was recommended this web site by my cousin. Best lesson in i have ever learnt in Forex Trading. Factors a great trader needs to know and learn. Yes, one lesson to be learned is overtrading.
Once you find your edge you are more prone to trading less. I opened my first trading account 8 weeks ago and struggled to keep a positive account. A colleague of mine, who has a membership with you, just introduced me to your website and offered some of your sound advice which I have taken on. Your membership looks reasonable, and your advice is so valuable. I look forward to becoming a member. FOREX as sucker games 😀 but who cares right!
Nail, I think I am over trading. But I like it, trading day charts is for people with a big account. Trading for the sake of trading is always a bad idea. Many find it gives them a buzz but this is dangerous. It’s a probabilities game, I need to be very confident prior to entry and understand my reasoning for taking that position.
Still I will always adopt strict risk management so I could afford many bad trades before I would start to worry. That said if in doubt I simple stay out. Remember not every day is a trading day! Thanks for this and all the materials you make available.