A day in the life of a Forex trader

0

One of the most commonly asked questions that beginner Forex traders ask is “how does it work?”, to which the answers are usually very convoluted, vague or just non-existent. Very few FX traders or Forex brokers themselves have a clear answer as they don’t necessarily have a real schedule that they can refer to.

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q1 2020 hedge fund letters, conferences and more

However, thanks to the power of the internet, as well as research on what strategies work and when there is some kind of answer that we can come up with. And that answer is the daily schedule of a Forex trader that uses trading as their main source of income.

Pros And Cons Of Tail Risk Funds

tail risk fundsEditor’s note: This article is part of a series ValueWalk is doing on tail risk hedge funds. The series is based on over a month of research and discussions with over a dozen experts in the field. All the content will be first available to our premium subscribers and some will be released at a Read More


Naturally, no names will be mentioned here as most of this information is a combination of various successful traders and similarities in patterns. So, without further ado, let’s begin the day.

Morning - data scouring and analysis

The first thing that FX traders do in the morning is to check the developments of the market. FX has a very unique feature compared to others that it does not stop trading orders on workdays. Only on the weekends do traders see some rest.

So, once traders wake up, they simply check whether there were some major political decisions made that could impact the exchange rate, or whether their stop loss or take profit orders have been fulfilled. (stop loss and take profit are just instructions for the trading software to close trades at certain points of the exchange rate).

Information gathering is usually done either from industry experts that publish their analysis on trustworthy sources like Bloomberg, the Financial Times, or various other platforms. Or, in the case of experienced traders, data gathering happens personally (checking the charts, comparing yesterday’s performance and etc).

The most common morning analysis routine comes from clients of large Forex brokerages. The brokers usually have this particular service of rounding up the market performance during set periods of time and making it easy-to-understand for the reader.

However, according to this BDSwiss broker review, it’s absolutely essential for the company to have a license with a trustworthy regulatory authority. This ensures that the people that work in the brokerage know what they are doing and have the skills necessary to provide this service. If there is no license, then trader trust is most likely misplaced in the market analysis provided by that certain company.

Noon - documentation and rest

Once all of the information has been gathered, most traders prefer to document it in their own way so that they can come back to it during the day, or in extreme cases in the following days and weeks of the trading process.

Once the documentation phase is complete, most traders just take a break, clear their minds, and focus on something else. This is done in order to prevent rash decisions. We are wired to immediately act on incoming information, which makes us prone to mistakes. Therefore, traders just take a breather, allow the emotional impact of the information to pass and only then return to the process.

This helps with objectively looking at the data provided in the document.

Afternoon - placing trades

According to industry experts from 55Brokers, afternoon hours are the most commonly used timeframes for placing trades. It’s when all of the important information of that day has been distributed and everyone had done their research.

This is the time when the market is somewhat more predictable than in the morning. This can easily be seen through the volumes of trades during afternoon hours.

Once the trade is placed, a large majority of FX traders simply leave their stations. According to many of them, this helps with taking one’s mind off the trade and just accept what research had already been done, as well as free time to spend somewhere else.

It is true that, when traders just stare at the chart moving in real-time, it is much more likely for them to change their minds and adjust their trades, often leading to terrible results.

Evening - revisiting placed trades

The market tends to change every second. There could always be an exclusive news piece about government decisions or market changes, which could alter the exchange rates. Therefore, most traders, once they’ve taken a break and cleared their minds, revisit news websites or newspapers to give one final look at that day’s issue.

If nothing has changed, then they move over to the charts themselves, to see if it has moved somewhat away from what they had predicted or determined previously. If there are any changes to be made, they make them before overnight fees kick in (a small fee that brokers charge for keeping a trade open during the night) or just leave the trades as they are.

Midnight - closing

Most FX traders are night owls and don’t really have a strict schedule for when they should go to bed or wake up. So their schedules are usually reliant on what’s going on in the market. If everything is quiet and stable, they can calmly close their trades and finish the day. If not, they may stay up very late adjusting and doing additional research.

But in the majority of cases, traders do their final roundups around midnight. Close the trades that they think have reached their limits, and only keep a couple open overnight in case there is potential for larger gains from it tomorrow. This is done because of the overnight fees mentioned above. If too many trades are left open, it could get a bit expensive.

Rinse and repeat - or not

One of the main attractions of the FX market or financial markets, in general, is that days are never the same. There is always some minor change, something new that happens that forces traders to adjust their strategies and their schedules.

This makes trading much less monotonous and interesting, which is why people usually stick to it.

The schedule mentioned above is more applicable to people that trade for a living. Those that treat trading as more of a side hustle or extra income, tend to have a lot less hectic day of research and analysis.