Trading at all hours? Get some sleep!
Trading at all hours? Get some sleep!

Trading at all hours? Get some sleep!

One of the challenges I faced when I first ventured into the forex markets was that much of the real action took place while I was asleep, or at least extraordinarily groggy and sluggish. I'm on the West Coast of the US, and when New York and London trading is in full swing, I'm usually not in a state to make good trading decisions.

At first, I tried to shift my sleep schedule around, either staying up extremely late to join some of the early trading activity or getting up far earlier than I would otherwise have considered sane or healthy to trade the tail end of the London-New York overlap.

The results of these sleep deprivation experiment (because that's really what they turned out to be) were a mounting series of losses, a growing coffee dependency, and a marked increase in my daily crankiness levels. As a rule of thumb, if you're trading while half-asleep, odds are you're not trading well.

Sleep deprivation being the mother of invention, I was driven to find a new forex strategy that would allow me to get a decent night's sleep.

The keys to this new strategy were

 

(a) Expanding the timeframe, I traded in from a few hours to increments of a day or multiple days

(b) Designing market predictions that would trigger trades at hours when I was normally awake - specifically, in the 4:00 pm to 5:00 pm window, Pacific Time.

(c) Investigating automated trading systems such as FX Engines that would enter and exit trades for me, no matter my state of consciousness. I now use FX Engines constantly in combination with strategies (a) and (b).

(d) Limiting the amount of time, I spend directly involved with the forex markets: staring at charts, monitoring trades, panicking about my trading strategy, and so on. This helps ensure I don't end up tracking my trades obsessively into the wee hours. (Though, as I noted in this post, I'm still not limiting my involvement in as disciplined a manner as I should. My trading discipline is still very much a work in progress!)

So, if you're facing a choice between sleep and forex, fear not -- you can design a profitable strategy that allows you to have both.

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