Time Spent Trading

Though there are some crazy obsessive types out there, most of us don't keep a market screen open on our computers 24 hours a day, mainly because it's entirely unnecessary. Just because money is being traded 24 hours a day somewhere in the world, it doesn't mean we have to be watching it happen 24 hours a day.

Very few people spend all day buying and selling currency, or stock and shares for that matter, every few minutes or so as prices go up and down. For a start you have to pay each time you do this, so it would cost you a lot of money and reduce your profits, if there are any left after all that trading.

Having said that people do tend to trade in the forex markets over shorter periods than some stocks and shares dealers, where some may hold onto their shares for months, years and even decades without selling them.

The most common practice for profitable forex trading is to look at predicting the markets over a number of days, weeks or, at the most, months. Any shorter than this and you'll drive yourself mad trying to keep up, and any longer than a few months and you'll wonder what the point is - you may as well trade in regular shares.

Of course you don't want to predict that dollars are going to rise in value over the next two months then leave it entirely up to chance, after all they might go to war or suffer some enormous bank crash in that time and the value of the dollar may plummet. But, fear not, you don't need to live in a state of panic every time you make a trade, there are automated systems in place that you control to save your ass, most commonly known as stop losses.

Put simply, stop losses are a level you set yourself to pull out at. For instance you might say if the dollar value drops by 10% then I want to end it and pull out now before it cost me a fortune. Furthermore you can also set pull out point and certain gain levels, say request to pull out if you make 20% profits, just in case it goes back down again before the spread bet period is up. This way you can be sure your losses will not be a bank balance crippling nightmare and you can get on with your normal daily routine outside forex trading.