How to determine the right trading time.
Here’s a question I’m often asked, especially from persons interested in trading or have just started to trade.
My responses are usually unorthodox as you are the only one that knows the right time, as this is based on “your time.”
A trader that trades stocks can only trade when his trading exchange is open. This means he’ll need to allocate the time for trading, so for eg: I’m a trader that only trades US stocks, the right time to trade is when the NYSE is open.
As a Forex Trader, the market is open 24hrs per day, 5days per week, the right time for you is based solely on the time you can commit to trading.
I think the more important question is “How do I know when it’s right for me to trade?”
If I was to answer this question should I’m ever asked, It’ll go like this:
In order to know when it’s right for you to trade, you must ask yourself a few questions:
Why? What? How?
Why do I want to trade?
Most people want to trade for the same reason “money.” Some maybe looking towards trading as their main source of income while for others it’s just to create additional income streams. Whatever the reason is for you, it should be very clear.
What am I required to do?
If you’re looking to start a business, it would be unwise for you to jump in business without a clear understanding of the business, and to do this you will need market research data.
This is no different for trading. The popular reason for traders failing to make a profit is due to “Not knowing where to enter and where to exit a trade.” This is down to lack of specified knowledge. Lack of a proper Money Management plan is another common factor, but let’s not get into that. The point I’m trying to make is that you must know what your required to do before you start doing something. Otherwise you’ll feel like an headless chicken.
How am I going to go about trading?
This by far is the most important part of the time we need to determine when it’s right to start trading.
We know that we need to have an understanding so we need access to information. Luckily for us we’re in an era where access to information takes only the pushing effects of your fingers on a keyboard.
Everything you need in on the internet.
The downside to this is “Too much information to process.” We now need to dissect this information based on relevance to what you’re trying to achieve, this approach can be tedious and time consuming if you decide to choose this option. Basically it’s a trial and error methodology that’s being applied. Another option is to seek specialized knowledge from someone who already have the information that you’re seeking. To do this you also have 2 options.
Option 1: YouTube/ Free Trading sites
Here you’re able to receive a lot a information from persons who’ve done what your trying to do. It will not cost you money but again it may take time to find someone that resonates with you based on their presentation of the information you seek. The downside to this is that you may have important questions you’re trying to ask, however the response may take month to come to you if you do get an actual reply from the author of the video.
Option 2: Mentors & Coaches/ Educational Platforms
Similar to option 1 you’re also able to get a lot of information from persons who actually know what they’re doing too. However, this will come at a cost, as the information is a bit more personalized. You can choose to have someone coach you on a One-One level, or in a group setting, either way it’s still personalized as it will require time for that individual to curate the material and present it to you. Here you’re able to get get your answer promptly, and that’s a service of fair trade.
This too also have its downside, which is you may not know if the delivery method or if the teacher will resonate with you, until after you have paid for the service. A good trader may not be a good teacher.
My advice here, is to take your time and assess the approach you’re willing to take in relation to the goals you’re looking to achieve. Then you are able to make a conscious decision on the way forward.
No trading must be done whether Live or Demo until after you’ve done everything we’ve covered above and you have a strategy with suitable backtesting results. The biggest misconception you can do as someone looking to start trade is to demo trade without a strategy and see profits being generated. This will create a false sense of expectations for when you put your actual money in the market. It takes absolutely no skill to make money in trading, anybody can do this. However, unless you develop a trading skill and strategy to keep that profit, otherwise you will most certainly lose everything you gain along with your investments.