Is it possible to earn well by trading forex once a week?
There are many approaches to trading forex, and one-trade-per-week approach is definitely one of the better ones. It doesn't require you to constantly watch for the market developments, while it can earn you just as much money as short-term trading. Today, we are going to talk about what it takes to be a sound once-per-week forex trader.
Trading forex is an excellent way to earn some extra money, but you can only do so if you know what you are doing, and if you have a proper strategy. There are many approaches to forex trading, and many aspects to look into.
For example, some people are trying to make money as much as possible, which requires them to always be in the market. However, this is hard work and something that you cannot achieve. Not to mention that you are very likely to often experience losses that can be quite costly if you make a wrong move.
A different approach
Another way to do this, which requires a lot less of time on your end, is one trade per week approach, which may sound like you do nothing most of the time, but the truth is that you can make just as much money as short-term traders. Provided that you get a perfect set-up, of course, or as close to perfect as possible. These do happen, and patience will lead you to them.
If you approach your trades this way, you will be out there, looking for great opportunities, instead of simply jumping on any potential opportunity that comes around. And, while you will certainly see less action, you are also far less likely to experience loss.
There is no guarantee that you won't lose some money every now and then, and we won't promise you that. However, this kind of discipline will teach you to be patient and to wait for the right conditions, which is ultimately the best way to avoid risks and earn on your investment.
Things to focus on
When it comes to once-per-week forex trading, there are a few things that you should focus on.
1) Quality over quantity
We have already mentioned this briefly, but if you are interested in this kind of approach, you should start looking for good quality opportunities when it comes to trading. The market is moving up and down all the time, which you likely already know. Jumping every time when the indicators show that the opportune movement is possible is no guarantee that it will happen, or that it will bring as much money as you may expect.
2) Don't come in without a plan
The second thing to focus on is preparing a plan — a proper trading strategy before you jump into the thick of things. By doing so before you actually start trading and risking your money, you will put the odds of success in your favor, while reducing the chance of losing money.
Trading is interesting that way, as both losses and winnings can make you emotional and cause you to make a bad decision, either because you lost some money and you are in a hurry to make up for it, or because you won some money and you start believing that you can do no wrong.
The best course of action is to create a sound trading strategy and stick to it. Remember, when it comes to trading, following your feelings is a sure way to lose funds. Instead, focus on the cold logic, since that is the right way to go about these things.
3) Be disciplined and patient
It is hard to hold back when the market starts moving in a way that allows people to make money, and it takes a lot of discipline not to join when you see others earn. However, being patient is necessary if you are to catch good opportunities. Such happen often, but not often enough to make every movement a good opportunity to join.
Basically, the most important part is to choose your battles, and doing so is one of the most important steps in being a good once-per-week trader. You can make just as much money as short-term traders, only by approaching things differently. While short-term traders may benefit more often, they will also experience losses more often than you, and that is a certainty. No one is good enough to get it right every time, so there is nothing to envy them for. If anything, short-term traders are more exhausted and more likely to make a mistake, as things often get quite emotional when you are keeping watch for any opportunity all the time.
Waiting for a perfect set-up
If you keep an eye on the market for any length of time, you will quickly start to notice that, from time to time, there is a set-up that appears to be nearly perfect. Whenever they do appear, they usually unwind in a way that allows traders to yield several hundred points profit, which is much better than being on-duty all day for a few points now and then.
If you catch only one of these per week, that will be more than enough to make a living from forex trading, and sometimes, you may even find several of them per week, during the more exciting times. It all comes down to how many currencies you decide to track, what time frame you are using, and similar details. By noticing and understanding these aspects, you can create a great strategy that will suit your charting techniques.
To explain this on an example, let's say that you are using several technical indicators that allow you to look for positions and the 4-hour charts, or even daily charts, although those will only help you catch really big moves.
Even if you decide to wait until every single indicator strongly signals a long or short position for you to take, you will still find several of them.
This way, you will be able to trade more conveniently, and you won't have to wait in front of a computer screen for every blimp on the radar. This allows you to focus on your day job without worrying, and even enjoy some extra spare time once you are done checking in on the market.
Possible pitfalls and how to avoid them
As you may know, it is one thing to discuss hypothetical scenarios, but another thing to do what needs to be done in practice. This is especially true when it comes to short-term trading, as we talked about earlier, as seemingly good opportunities tend to come often, and you need to prevent yourself from entering a position every time that happens.
That means having strong discipline and being careful enough to only trade when the time is right. Sometimes, that will mean keeping yourself from entering the trade for over a week. However, this will prevent you from losing money. Simply put, you need to be extremely cautious and disciplined enough not to forget that.
Another thing is learning how to recognize good opportunities, as you need to learn how to recognize the signs of a good opportunity coming your way. You also need to be confident in your trading ability and stick to the plan, even if the situation seems to be taking a bad turn. You must train yourself not to panic, and to read the signs properly. Otherwise, you will exit a position at the wrong time, and miss a good opportunity at best, and lose money, at worst.
Author: Ali Raza - A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and writes extensively about the financial markets and fin-tech industries.