Forex trading can be a highly stressful profession, particularly if you are trading your own money, but there are ways in which you can adopt a more automated trading approach and dramatically reduce stress levels.
Opening Range Breakout Trading Strategy
The first method I’m going to suggest is to use a basic, but profitable system which eliminates the need for you to make trading decisions yourself. A classic example would be some kind of breakout system. For example, some traders like to plot the opening 15 minutes of a trading session and place orders to go long or short at say 5 points outside the high and low points of this range, with the strategy being to catch any moves when the price inevitably moves outside of this opening range.
Another similar breakout strategy would be to sit and watch a currency pair until it enters a quiet trading period where it trades within a very narrow range and then again place orders to buy just above the high point, and sell just below the low point to catch any moves.
If you can use a solid and reliable breakout strategy then this is relatively stress-free because all you do is identify a trading range and place orders just outside of this range with appropriate stops and limits in place if required.
Short-Term Trading Strategy
Another way to eliminate stress from your trading is to stop scalping and placing very short-term trades which require quick decisions, and can result in quick profits or equally quick losses, but adopt a more long-term approach instead.
Not only is this less stressful but it is also widely accepted that this is often a more profitable way of trading. Indeed I chatted to an employee from one of the spread betting firms a while ago and he told me that most of their most profitable traders were all medium and long-term traders.
Technical analysis conforms extremely well to longer time horizons with currencies and indeed most financial instruments, so why not adopt a longer term approach? This way you don’t have to sit at your computer screen for 8 hours a day jumping in and out of trades, but can instead build up a long-term position when all your trading criteria are met.
This way you could even make a full-time living as a Forex trader whilst also holding down a full-time job, because you could just as easily study the charts for an hour or so every evening and trade daily or weekly charts.
Automated Forex Trading Bots
The final method I want to discuss briefly is a more expensive method and sadly out of reach of most people. It involves building and programming a bot to trade for you. Obviously this is extremely complex as it involves mathematical equations and algorithms but I thought it was worth mentioning anyway.
The main points I wanted to get across today is that Forex trading doesn’t have to be stressful. There are certain methods of trading you can adopt, as I’ve mentioned in this post, that can take the actual trading decisions away from you to some extent, and can produce consistent profits over sustained periods of time without stressing you out all the time.
My recommendation is to have a mentor who provide support and make a stress free Forex trading environment.