Forex Trading Articles - Mental Focus for Forex Trading

Being Mentally Fit and Focused When Trading FX

Oct 31 • Forex Trading Articles • 16648 Views • 8 Comments on Being Mentally Fit and Focused When Trading FX

I recently exchanged e-mails with a fledgling FX trader who was concerned with his “lack of focus”. He felt that his mind drifted from subject to subject and he often found himself “aimlessly wandering around the internet” and not focusing on the job in hand. He wondered whether he suffered from some form of attention deficit disorder and even considered that trading may have ‘unlocked’ his poor attention span, or was it always there and he’d accidentally aggravated it?

As a forex day trader he concentrated his trading exclusively on two currency pairs, the EUR/USD and USD/CHF. His strategy (method) was fairly straight forward; he traded off a one hour time frame, looked for price to have crossed R1 or S1 with extra confirmation from a momentum and oscillating indicator and he was profitable, he looked for a 1:2 R:R circa 100 pips take profit limits. His psyche seemed healthy and his MM was sound, he risked no more than 1% per trade and would have a max. risk of 2% account market exposure if his EUR/USD/CHF correlation was ‘working’.

It’s a difficult spot to be placed in when asked to be an ‘FX doctor’ given we all have idiosyncratic trading behaviour, but on the face of it I couldn’t understand his anguish unless it was affecting his results. Once you’ve developed a consistently profitable edge would it matter if you caught up with all the weekend’s Premiership goals, talked “a load of FX” on forums, or watched the BBC I-Player whilst waiting for your set up to trigger? Isn’t part of the reason we migrate to becoming self employed forex traders precisely so we can enjoy the freedom and benefits that go with the job? Would I not be fully focusing on the job if I decide to swing trade but can’t monitor my trades whilst I’m at the gym, in a circuit training session, or mountain biking down a Welsh mountain? And surely one of the massive benefits of using alerts as part of any trading/charting package and platform is that the alert can jolt you into action, literary alert you to your trade set up? And if you use Meta Trader, to develop an expert advisor that executes all your trades as part of your pre defined plan, surely you’ve reached a stage of trading Nirvana were you can switch off?

The only reason I could visualise attention being an issue is if you were a scalper, but if trading represents sitting in front of a bank of monitors for eight hours a day, taking circa fifty trades per day, then such an unnatural existence is bound to cause times when your focus and attention drifts. Would air traffic controllers be expected to complete an eight to ten hour shift without a break, how long or how many miles are long distance lorry drivers allowed to drive before they’re legally forced to take a break? After 4.5 hours of driving the driver must take a break period of at least 45 minutes and cannot complete more than eleven cumulative hours driving in a fourteen hour period. We all switch off when motorway driving, we listen to music, talk to passengers, daydream, relax a bit, yet unconsciously make sure we are alert and ready enough to take evasive action should danger arise. We manage our journey as we would a trade, but it is impossible to imagine that we could enjoy an unbroken concentration period of 4.5 hours at a time, it is surely beyond the ability of the human condition.

If you’re not breaking your rules, not violating your trading plan, which you’ve taken a great deal of care to craft, then does an attention span issue actually exist? All things considered my best reply was that he was suffering from two issues which many of us go through, the “is this it?” issue and the ‘guilt trip’.

The “is this all that’s involved in trading?” question and issue is one aspect of trading that we all face at some stage once we’re moving into the conscious competence corner of our personal trader development. Trading is not “hard work”, even the mechanics of taking a massive amount of trades only takes seconds per trade, manual it isn’t, laborious it can be, but physically taxing it never will be. When you have confidence in your trading edge and you’ve developed your set of rules to follow, in order to ensure that your trade management and profit/loss taking is in correct order to maximise gains and minimise risks, what more do you have to do? Your set up occurs, you pull the trigger, you manage the trade, what could be simpler and how much concentration does it really take?

If we’re aiming to reach a state of mind were we unconsciously and competently take our trades then surely we’ve earned the right to switch off, surely trading has become such a part of our being that it’s become an action that requires very little in the way of concentration or exertion? There’s no compulsion to feel guilt at finding such a profession and developing competency, this is a thinking and doing business, the exertion extends to maintaining a healthy trading psyche by way of an all round disciplined approach to all aspects of your profession.

If you weren’t intellectually curious as an individual how could you possibly progress as a trader? That curiosity must extend to taking in as much alternative views and information as possible but there’s only so much forex news we can all absorb without feeling weighed down by the massive volume. As someone who reads and absorbs massive amounts of economic news on a daily basis I regularly take breaks. I constantly research the FT, Reuters, Bloomberg, Dow Jones etc., the online editions of the UK newspapers’ business sections and various forums and monitor my charts and set ups. This absorption in economic news fundamentally underpins my ability to deliver comment and part of my job description is to make clients aware of what’s happening in the market. However, it would be impossible to concentrate on news releases 24-7 and if I did the comment delivered would be cold, robotic, stale and lack insight. Similarly any trader too absorbed in the mechanics of trading could miss the bigger picture in the FX landscape as it evolves.

We’ve all micro managed and over managed trades to then witness them rebound on us, we’ve all stared at, for example, our EUR/USD chart attempting to stare up or stare down price, often being too intense, too focused which can hinder your performance. Perhaps it’s worth individual traders taking on board these suggestions to maintain focus on our industry whilst waiting for set ups.


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Take Breaks
Step away from the monitor/s for 2 or 3 minutes every hour, this can improve your precision of thought and indirectly your trading. Stretch, take a few deep breaths. Time your breaks around news releases, or market opening times, if you’re trading off one hour charts why not take a break after each candle has formed, perhaps ten minutes into the new candle formation.

Become A Member Of A Currency Trading Forum
Self employed FX trading is an isolated occupation. Relatives and friends have little understanding of the industry you are in. As a member of an online forex forum you can be part of a community, this can feel similar to having the physical company of work colleagues. You may make valuable contacts, you may be grateful for the support of other members when you struggle with trading. You can pick up alternative trading strategies and stay up to date on developments in the world of currency trading through membership in a forum.

Read Fx News Updates
At the end of each day and at the start of your trading day be certain to inspect a forex calendar and news broadcasts for news or reports that are likely to affect sentiment throughout the course of the day.

Get A Life, Keep Your Previous Life
If forex trading takes over every facet of your life you are doing something wrong, burnout will inevitably ensue. Keep to scheduled times with your family, friends, trips, time for sports or activities. The time that you then engage with the market and in front of your computer screen will be more productive.

Exercise maintains the mind. Regarding exercise as part of your overall trading plan can prove to be a very effective counter measure versus the stresses we face. Many traders will testify to the light bulb moments they’ve had when on a cross trainer in the gym, or swimming lengths, or out in the fresh air on a road or mountain bike. Ironically you’re far more likely to find your trading solution when away from your trading environment as opposed to sat in front of your monitors.

Forex traders must be goal oriented, you have to set targets, this is a performance business. There are three parameters that can be extremely useful when setting goals.

  • Targets must be realistic. – If you set unrealistic targets it will undermine your confidence, you’re setting yourself up to fail.
  • Your targets must be attainable – Not only must your goal be realistic, it must also be achievable. Set short term goals. Start with small targets that are fairly easy to achieve and continue to grow your horizons as you gain confidence and your trader skills improve.
  • Your targets must have measurability – A target that cannot be measured isn’t a target. If your rather simplistic goal is to be wealthy, how can you measure your progress? You need to set a specific value amount in order to know how close you are to achieving your target. This helps measure changes to your strategies. If you measure your moves in euro amounts, you can tell what worked and what didn’t. When beginning a trading career no target should be considered too small, targets should be realistic, achievable and measurable. Your goals can grow as your trader evolution takes shape. Successful Forex traders set specific, measurable goals and move towards them with confidence.


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