How To Spend Time As A Swing Trader?
How I Spend Time As A Swing Trader
When I started trading Foreign Exchange (Forex), I was literally glued to my screen. With reason, the charts and price movements were so fascinating to me. I would open my broker's app every half an hour or more to try finding a trade.
I just wanted to spend as much time as I could and I was looking for the “next best trade”. That was a very bad way to do things.
I came to a point where I started to understand how I could truly spend time as a swing trader and not be stuck at my computer all day.
This Is Where New Traders Get Confused
New traders often make the association between spending time looking for the next setup and profit. In reality, profit does not depend on the number of trades taken. I was taking a lot more trades when I started in 2012.
Another confusion facing other traders is the idea that trading requires extensive analysis. Some people think of trading as investing and performing an analysis of the stock or currency. Although some professional traders/investors do that, it is not in my field of expertise.
Can't find enough time to trade?
When you know what you're looking for and you trade on a daily basis, the time spent trading can be minimal. However, other activities related to trading require a certain time weekly.
Here is a breakdown of how I spend time as a swing trader:
What you need to know from the start is that I very rarely enter trades on timeframes lower than the 1 hr chart. Most often, I trade the daily and 4hr charts.
On a daily chart, a new candle appears every 24 hours. As a result, I can look at the chart only once a day. On a 4h chart, there are 6 candles in a 24-hour period meaning that I can do whatever I want and come back to my trading desk at 4-hour intervals during the day.
Well, that is to show that I'm no longer glued to my trading desk for several hours anymore. When a candle closes, I look at the currency pairs I am following (around 12-15). If I don't see what I am looking for (the setup), I'm done. If I see the right setup, then I can place a trade.
Overall, I spend a maximum of 1 hour per day actively looking at charts with the intention to enter a new trade.
I Spend Time Journaling
Journaling is powerful. I've mentioned in the past 5 Reasons to Track Your Trades Using a Trading Journal and How To Use A Trading Journal.
Nowadays, I use a free online service to track my trades. However, I still find it very important to record a screenshot of my trades in Evernote (get the premium version for FREE with this link!). I sit down at the end of the week, take screenshots of all my trades, add a comment, and put them in Evernote.
That takes me around 1 hour weekly.
I Spend Time Practicing
Practicing is fun! Most traders leave out this part because it doesn't generate money directly. The benefits, however, are huge.
If you've listened to a few episodes of the Desire To Trade Podcast, you've definitely heard about the importance of practicing.
Even though I know I can trade, I keep practicing because I like it and because it helps me understand the market. I'm able to see things I hadn't seen before and that helps me improve my trading strategy.
The way I practice is through backtesting. Simply put, that involves going back in time and taking trades. The implications are powerful because more trades are taken than in demo trading. Demo trading means trading a virtual account based on present data.
Overall, I dedicate around 1-2 hours weekly to practice.
To Sum Up
If you've calculated well, you realized that I spend roughly 8 hours per week trading. That time goes by so fast because trading is something I'm passionate about. Of course, the time I invest in trading varies. Some weeks I practice more, other weeks I take more time off.
But that's nevertheless how to spend time as a swing trader. No more, no less.
The purpose of this article is to show that, with the right system in place, trading is possible even with a full-time job. I prone the “set and forget” mentality in which trades do not have to be monitored every half an hour.
The other important point is that, if you want to become successful, you've got to invest your time in the right things. Spending time researching for trading strategies isn't the best use of your time. Spending time practicing/backtesting is a much better use of your time.
Make sure you spend your time wisely!
Here's my question:
How much time do you invest in your trading? What could you do to spend less time trading?
Let me know!