Knowing how to make the best use of your weekends as a Forex trader is very important. The weekend to a Forex trader is like a cold bath in very hot weather. Those moments of relaxation, recollection, and freedom from emotional tensions.
During the weekends as a Forex trader, it is necessary to loosen up a bit, slow down the grind, and re-strategize. Especially when you consider the fact that there is not as much buying and selling to do compared to weekdays.
As you read on, we are going to discuss some of the ways to effectively utilize your weekends as a Forex trader. Ways to cool off the stress of the previous week, tweak trading plans and boil up for the week ahead. So, pay close attention and ensure you do not miss a point.
Things to Do On Weekends As A Forex Trader
Below are some of the interesting things you can do on weekends as a Forex trader. A chunk of them were gotten from experience, while the remaining bulk is from the research of our Forex team. Either way, these activities were compiled in good faith. We hope that after reading, you become a better weekday trader through proper utilization of your weekends.
1. Take Some Time Off the Charts and Relax
There is no need to talk much about the demanding practice of Forex traders to constantly watch over Forex charts.
This is because if we do not take much time to analyze price changes on Forex charts, we could lose a lot of money, especially for Scalping Forex traders who enter timeframe positions of seconds or minutes.
Having said this, why then is it important to relax on weekends as a Forex trader?
It is important because we are humans. We are not robots and neither are we automated trading software. We cannot work as effectively without adequate sleep or rest.
Studies have shown that a day or two off from work can help reorganize the brain to make better and more rational decisions.
These studies also revealed that a proper weekend rest helps to improve the emotional management of currency traders.
This is because you are provided with enough time to connect with family, friends, and nature. You also have the time to explore other hobbies and worry less about losing money. Also, while reinforcing the knowledge you’ve gathered from the past week.
This is perhaps the most important way to make the best use of your weekends as a Forex trader. It is good to regularly study price patterns on charts, but let there be a proper balance.
Your intense study shouldn’t be at the cost of losing your mind. Or at the cost of making decisions out of greed, fear, or other impulsive triggers.
2. Review Your Past Trades Using Your Trading Journal
A Trading Journal according to Dailyfx is a log used in documenting trades. With a good trading journal, any Forex trader can easily analyze previous trades.
There is no better time to carry out this analysis than over the weekends. After all, the weekend is probably the only time you can afford not to gush over price charts, or worry about the state of your account balance.
Reviewing documented trades is a good way to make the best use of your weekends as a Forex trader.
This is because it acts as a way to measure your trading performance by highlighting both your strengths and weaknesses. It tells you why you made certain decisions and the consequences behind them. So find a free trading journal software and analyze your trades if you don’t have any.
For more emphasis, here are some important components a good trading journal should have for easy weekend analysis.
- A good journal should contain your reason for opening a position.
- It should contain an already planned exit strategy before you open that position.
- Documentation on why you closed a position should also be there. Did you manually leave the position because of a failed stop-loss prompt? Or was it automatically triggered by your stop-loss or take-profit order? These are the things you get to know.
- A screenshot of the weekday trade entries and exits should be there as well. This of course is to enhance visualization and memory for the next time you analyse a trade.
- Lastly, your journal should include your every trade outcome. Both wins and losses should be included.
For more information on this, you can browse why trading journals are important.
3. Pinpoint and Rectify the Mistakes In Your Trading Strategy
This is another important way to make the best use of your weekends as a Forex trader. As you map out time to relax, you should also check the strategy you use for each trade.
Bear this in mind though, a trading plan is not a trading strategy. A trading strategy is simply tells you when to buy a currency pair and when to sell that pair.
A trading plan, on the other hand, covers things like
- your trading time frame,
- the currencies you want to deal with,
- the “strategy” you want to use (of course), and so on.
Now let us discuss how to make your strategy better.
To make your Forex trading strategy better, you need to understand why you lost or won. Did I miss a point in my prior analysis? Did I set my take-profit too high, or my stop-loss too low? And then you move to the why(s). Why did I open or close this position? Was it out of greed or fear? Could I have won if I had closed the trade a bit earlier, or left it a little bit longer?
These are minor details waiting to be discovered, and there is no better time than during the weekends.
Once you’ve pointed out the little problems with your strategy, rectify them. By doing this, you become better than you were the previous week.
For example, a strategy has been accurate in predicting the appreciation of a pair for certain conditions. But then, you notice that this pair has depreciated 70% of the time before reaching your take-profit limit. The smart thing to do here is to reduce your take-profit order within that range.
So, you see, relaxation is not all you should do. You should also take the time to improve your trading strategy on weekends as a Forex trader.
4. Backtest Your Trading Strategy
Backtesting simply means going back in time to see how a strategy would have worked in the past.
Here you take a strategy that you have drafted out and test it on previous market reactions. There is plenty of time to do this on weekends as a Forex trader. Especially when you consider the fact that you can fast-forward chart movements to any speed level of your choice.
You can also enhance your analysis by slowing it down to get a clearer view of rapid price changes.
Backtesting is a way to check the effectiveness of your optimized strategy. So, you not only get to correct your mistakes in your trading strategy. You also get to see how it plays out on a live chart, at any speed of your choice.
In case you are confused about which software to use for backtesting, you can try out the Meta Trader 4 software. It is available for both PCs and mobile phones. Best of all, the MT4 is known for being 99% accurate.
Here is another good way to properly utilize your weekends as a Forex trader.
5. Increase Your Knowledge Through Self-Education
Yes. The weekend is a time to attend that webinar you have been wanting to attend. It is a time to have a few beers with Forex friends and maybe discover new strategies.
It is also a time to read a bit of that Forex book that has been taking forever to finish. And hey, you have enough time to listen to that mentor of yours as well.
There is this colleague of ours who used to brag about how she started reading this insightful book.
She did it for the whole of last month and would try to juggle reading this book and her normal weekday trading. Guess what, she stopped completely as soon as she noticed a drop in her trading performance. What’s even more funny is that it has been 50 days now, and she hasn’t even gone halfway through the book.
Now, we are not saying that is not good to read books or attend webinars during the week. Our point is that the timing of this learning endeavor is wrong.
During the weekends, your mind is more relaxed and focused as there is very little activity in the market. So, you understand better and learn a lot faster. If there is any other day you don’t trade, it is fine as well. You can use this time to gather as much new information as you can or even build on previous ones.
The main idea is to give your mind the undivided attention it needs for productive trading and also productive learning.
6. Check Economic Calendars for Upcoming News Events
This is another way to utilize your weekends as a Forex trader. Some may tell you that checking news events is only for Fundamental traders, but that’s untrue.
The Forex market mostly fluctuates as a result of economic and political changes. And this affects all Forex traders, whether you are a Fundamental or a Technical trader.
Moreover, planning your trades around economic calendars can help you avoid losses when the market gets very volatile. It can also help you plan how you can make quick profits during those periods of volatility.
For example, at the release of the Non-farm Payroll news, the market normally experiences increased volatility. So, if you don’t take the time to check for this, you could feel the impacts negatively. This also applies to news releases like the Empire State Manufacturing Index, the CPI, or even the BOE data.
In case you are wondering where you could keep up to date with new economic events, check out the Forex factory website. They provide clear and detailed information on upcoming events.
7. Perform Your Analysis
This involves everything you do to help predict the prices of currency pairs. And it is better done on weekends as a Forex trader than on weekdays. This is because you not only have enough time, but you also have the privilege of making objective analysis.
There is not much trading pressure on weekends, so you have a clearer mind to analyze without emotional drawbacks.
There are mainly two classifications of Forex trading analysis. Fundamental and Technical Analysis.
Performing Fundamental analysis is pretty much using the information spoken of above to anticipate price fluctuations. It involves watching out for economic and political events and how they affect the Forex market. Perhaps one of the greatest Fundamental Forex traders is the popular George Soros.
Performing Technical analysis, on the other hand, is simply checking and comparing previous price patterns to discover the rate at which repetition occurs. It is based on the idea that traders will react almost the same way in certain conditions.
Note this though, it is advisable to learn how to combine these two methods of carrying out trading analysis. As they both provide a balanced approach to speculation.
8. Set Your Weekly Goals
This is simple, and it is equally as important as setting trading plans or specific strategies. Come to think of it, what are you planning for if you do not have a goal? Why should you take your plan seriously or stick to it if there isn’t a clear destination?
A trading goal helps you stay focused for the week ahead. It also gives you a sense of purpose for your struggles and investments. Especially when that investment seems to be a bit risky.
However, make sure your goals are realistic. It shouldn’t put too much pressure on your shoulders. Rather, it should help to motivate and inspire you.
It is very unlikely to make a million dollars in a few days with just a few hundred dollars. It becomes even more unlikely when you invest more money to achieve that million-dollar goal. This is because you are now trying to avenge the market, so you won’t be thinking straight
Your trading goals don’t have to be big or dreamy, it just has to be feasible. You can start small and level up as you crush them little by little. Setting feasible goals is a good way to know what to do on weekends as a Forex trader.
9. Go Over Your Trading Plan
As mentioned before, a trading plan is not the same as a trading strategy. A trading plan covers both your strategy and things like:
- The currency pairs you want to trade
- Your preferred Leverage and Margin
- Whether you want to day trade or swing trade
- Your preferred Risk-reward ratio
- The type of news you want to trade, and so on.
So instead of using your weekends to just relax, you should also use them to cross-check your trading plans. Check what works for you and cut off those plans that don’t work.
Conclusion
This is just a sneak peek of the ways you can utilize your weekends as a Forex trader. There are other various ways to do this. The major idea is to ensure productivity while you relax and refresh your brain.
In addition to this, your weekends should not only concern Forex trading. You can do completely unrelated things like connecting with family, going on a date with your spouse, and engaging in hobbies you love. This is why we explained “taking the time off the charts” at the very top of this list. It is a way to create a healthy work-life balance, especially for full-time Forex traders.
References
Importance of rest in Forex trading— technapp.com
How to manage emotions— ig.com
Trading journal definition— Dailyfx
Best free trading journals— slashdot.com
Why trading journals are important— tradingpedia.com
Difference between a trading plan and a trading strategy— rockwelltrading.com
Forexfactory website— forexfactory.com
Who George Soros is— Wikipedia