How much time should I spend on a trading platform?
Have you ever thought about whether the time you spend on a trading platform pays off? New traders are driven by the vision of astronomical profits and they probably view sitting at a chart as an investment; they don’t see anything bad about it as part of their learning about the market.
But there comes a time when we have to ask ourselves: is it worth it?
It is a truth universally acknowledged that 90% of retail traders lose money on the markets. If that is really the case, I can say with confidence that for those 90%, the time they spend on platforms does not pay off. But what about the other 10%? How much time a day do they spend at a computer? And are their results good enough to match the time they’ve sacrificed?
I’m not one to sit at a chart for eight hours a day. Been there, done that, and besides developing a constant need for eye drops, the only thing that came out of it was trading turmoil and many inconsistent results.
Intraday trading in the H1, M30, M15 and sometimes also the M5 time frames brings about many dangers. If you’ve used technical analysis indicators, you’ve probably noticed that different time frames often display different trading signals.
A lot of intraday noise produces “confusing” signals and the amount of time needed to watch for example M15 charts led me to the realization that I didn’t want to spend my free time this way anymore.
After a while, I came to the conclusion that there are two different ways to effectively approach trading.
The first one is called scalping (trading on M1 to M5 charts). This allows you to create short-term imbalances between the supply and demand for trading small moves using the appropriate tools.
These trades are usually open only for a couple of seconds, minutes at most, before they reach the Take-Profit or Stop-Loss. In one or two hours, you can execute several similar trades, and spend the rest of the day doing other things.
I think that watching 1-minute charts for eight hours a day can be very exhausting and that it can get you a one-way ticket to a psychiatric hospital.
Position or swing trading
The second approach is called position or swing trading – swing trades that last a couple of days, sometimes even weeks, about which the trader makes decisions on H4, daily, or weekly charts.
This type of trading should not take up more than an hour a day and it allows you to minimize the time spent looking at a chart. Trading opportunities don’t come as often in this case, but compared to scalping, the moves you are trading are usually bigger. It is also appropriate to watch several markets at once and look for as many opportunities as possible.
I believe that combining these two approaches is the most time-efficient way to trade. If your strategy is successful, the ratio of profits gained to time spent on a platform is at a state about which intraday traders who trade for example only on an M15 chart can only dream about.
Do you think I am shortsighted and that what I’ve said is wrong? I’ll appreciate it if you share your experience along with how satisfied you are with your profit and the time you spend on trading platforms and contribute to the discussion.
About the Author
Team Purple Trading
Purple Trading is a true and 100% fair ECN / STP forex broker providing direct access to the real market. High speed orders execution, no trade-offs, no limits for any type of trading, the most advanced trading technologies. Explore more about Purple Trading at www.purple-trading.com .
For more information on the risks of trading, click here .
P.M. Purple Trading is a trade name owned and operated by L.F. Investment Limited., 11, Louki Akrita, CY-4044 Limassol, Cyprus, a licensed Cyprus Investment Firm regulated by the CySEC lic. no. 271/15.