Do you believe the hype about forex trading being the perfect lifestyle? According to the cultural image of traders shared in some quarters, not only can you work when you please – you can also work just a few hours a day and reap enormous profits.
But the reality of forex trading is entirely different. Foreign exchange traders are bound to the clock in ways that many not wholly familiar with the sector might not realize. The different time zones involved render many forex traders stuck in a cycle of working anti-social hours. However, many traders have also found ways to manage these issues. This blog post will explore how and why forex traders must keep on checking the clock compared to other trading sub-sectors.
The peculiarities of forex
No matter how you dice it, one thing is clear: the forex sector is relatively unusual in that it tends to demand round-the-clock action. This is primarily because foreign exchange is traded in pairs, unlike in other sectors. As a result, it always involves two countries, and often two that are scattered around the globe.
This can create tensions, as it can mean that a morning interest rate announcement in the US and an election in Japan’s morning can both have effects on the same day – so the best time for forex trading can often happen hours apart. It’s worth researching this further on strategic, informative sites like ForexTraders.
All traders work hard
But it’s also important to remember that there is no such thing as a trader who doesn’t work hard. While it may be the case that foreign exchange traders have to work particularly hard to stay on top of things compared to a trader who trades a market that closes at the end of the day, all traders must give it their all to succeed.
Many jobs outside of finance can now be picked up and worked at the worker’s timing choices, but no trading job is like that. There’s no such thing as a flexible trading lifestyle: if something happens, you must be there no matter what your market. The only difference for forex is that you may have to do this all day and all night, given the round-the-clock nature of the market (given that the foreign exchange market often remains open during the night between Sunday evening and Friday evening).
And there’s also admin to do as well. Traders need to keep on top of their tax returns, for example, and they also need to make sure they are keeping in touch with their broker and ensuring the broker they have is the right one for them. As a result, there’s always something to do – no matter what sector.
Managing the clock
And it’s also the case that many traders have found innovative ways to manage the clock’s demands on their time. They have, for example, made the most of tools such as stop losses, which allow them to specify in advance when exactly they want their position to close if they are not trading. That way, they can exert some control over their portfolios even when they are not at their terminals.
Moreover, many traders have also worked their days in certain ways to be around for both time zones – or the reverse, by choosing currencies that meet their schedules. If it’s essential for a trader to be able to clock off at 7 pm for family reasons, for example, they may choose currencies where most of the action at least happens in the same time zone – like the British pound and the euro, say. While this won’t defend them against fluctuations that occur overnight, it reduces the risk of them missing something.
In short, it’s apparent that traders of foreign exchange pairs have got to make sure they are adapted to the needs of the clock to get ahead. However, the extent to which this is the case is another matter. For some traders, it’s enough to ensure that they trade pairs that are geographically relatively close. For others, it’s a round-the-clock effort to make sure they’re up and about to get the trading information they need. It’s up to the individual trader to work out what they need to do to ensure they don’t get beaten by time zones.