How to Organise Your Trading Schedule

How to Organise Your Trading Schedule

How to Organise Your Trading Schedule

Making the most of your time trading

Building on our previous two articles on how much time you need to dedicate to trading, we’ll be going over how you can arrange your trading day, so that you can cover the most opportune moments.

A note on how we’ll go about this – for the purpose of being more useful we’ve chosen a full trading day – one that has eight hours. Your personal one may vary – some people trade full time, but others mix following the market during work or study. The advice we’ll give here will hopefully benefit you in organising the time you have in both of these scenarios.

When talking of a trading schedule we mean arranging your time and activities in relation to trading. These include what we outlined in the article for planning a trade. In it we covered steps such as checking on news that is related to your preferred instrument(s) and picking one or more of a group of instruments that you have some knowledge about or that are in focus that day.

Lets see how this looks like for tomorrow, 05.03.15:

8:00am GMT – UK stock market opens. Impacted instruments: FTSE, occasionally GBP.

12:00pm GMT – Bank Rate announcement from BoE. Impacted instruments: FTSE, GBP, bank stocks.

1:30pm GMT – ECB press conference. Impacted instruments: EUR, USD, DAX, CAC.

1:30pm GMT – Unemployment claims data from U.S. Impacted instruments: USD

2:30pm GMT – U.S. markets open. Impacted instruments: Dow Jones, S&P, USD

4:30pm GMT – UK market closes. Impacted instruments: FTSE

So if you were to trade from 8:00am to say 5-6pm, you’d have six planned news events to look forward to. If you were to trade only after, say 2:00pm GMT, then there would be two expected volatility periods. Obviously they don’t absolutely always offer a lot of action; sometimes events are already priced in and the markets don’t budge at all.

This example has four main instruments for trading (FTSE, GBP, EUR, USD), but if you’d like a bit more background on deciding how many you should trade, you can go to this article. Remember that instrument types and indeed individual currency pairs, commodities, stocks, etc. are like people – you need time to get to really know them (Blog T212 obviously doesn’t believe in love at first sight).

There are several things to watch out for when trading on a schedule with pre-planned instruments and events in mind. A more technical one is that switching between instruments rapidly and frequently can lead to one of the most underestimated mistakes that traders make – mixing up the numbers. It doesn’t happen often, but when it does it can be quite a pain.

If this happens to you there are two ways to go. The first thing is to see if it’s a total mistake and a huge loss seems certain – if so – exit immediately and cut your losses. If you were luckier and this wrongly entered position is on the plus side – ride it out and see where it takes you – but do not enter a new trade – the fact you made an error hasn’t changed and it’s best to sideline yourself before you make another unwanted mistake.

Another important thing, focused on those who trade simultaneously with university and work, is to create some “space” between your main activity and trading. Yes, you can trade on the go, but if your mind is still engaged with something else, especially when it’s emotionally charged, it’s best to give yourself a bit of time and clear your head.

Some might be able to multitask, or quickly move from another activity to trading, but we mustn’t forget the bigger picture – we are, more or less the first generation that has the technical infrastructure to multitask at such a high speed – even if we do have the opportunity to do so, it doesn’t always mean we should. Training yourself and building habits of performing all the steps before trading is crucial in limiting risk and making better decisions.

You can of course expand the schedule to a weekly or even longer one with highlights, but a monthly one would be the longest we’d go for. Just keep in mind the regularity of the most crucial events that affect your preferred instruments and that happen regularly. Knowing what happens next should provide a better platform to be rational and calm when things don’t seem to add up in the market.

Armed and Ready for When the Trading Action Happens (part 2)

Armed and Ready for When the Trading Action Happens (part 2)

Armed and Ready for When the Trading Action Happens (part 2)

Second part of our series on trading sessions and the best times to trade

In part one we went over the three main trading sessions, how they overlap and where more volatility can be expected. Here we’ll pick up things with the trading sessions for commodities and their specifics and continue with a detailed picture of the differences between the days of the working week.

As commodities are traded on different exchanges than stocks, like the LME and NYMEX they also have different trading hours. Gold and oil are the main attractions here, but they have some discerning features between them. Gold isn’t traded with futures, its price is more akin to that of currencies in the sense that it’s main trading volume is electronic and doesn’t necessarily involve any physical exchange of nuggets, jewellery or bars. So for gold you have markets that are open between 11pm GMT and 10:15pm GMT in the Trading 212 PRO platform.

For oil, the main energy source of the world economy, futures are the predominant way of trading. As the extraction, refinement and delivery need to be done before the actual consumption, real buyers and speculators have adopted this style of trading. There are two main types of oil contracts – Oil Brent and the more general one simply named “Oil” in our platform.

Brent Crude (or Oil Brent as it’s denoted in the platform) is comprised of oil types that come from the North Sea and is the benchmark for around two thirds of global oil trade. It can be traded between 1am GMT until 11pm GMT. The second contract is called “Oil’ and covers oil that comes mainly from the Gulf of Mexico. It’s traded between 11pm GMT and 10:15pm GMT.

You’ll also notice that the two have different expiry dates, so keep that in mind when trading. The trading hours for all instruments can be found on our main page in the “Trading Conditions” menu and in the “Trading Instruments” tab.

Switching to forex trading, especially if you trade on multiple currencies, has a specific rhythm that can be seen in the different days of the week. Mondays traditionally see the lowest volatility and price change, whereas Thursdays see the most action.

Here is a list of what currencies have their largest moves in the respective workday:

Monday: none

Tuesday: USD/CHF

Wednesday: none

Thursday: EUR/USD, USD/JPY, AUD/USD, NZD/USD, EUR/JPY, GBP/JPY and EUR/CHF

Friday: GBP/USD, USD/CAD, EUR/GBP

The explanation for this is that, although the first day of the week is usually hectic for most businesses in the real economy, financial markets act on news that has just happened, or that has accumulated in some way. With two days of inaction and a lengthy Friday afternoon and evening to digest all previous announcements, usually Monday is quite calm.

Thursdays on the other hand have a concentration of planned economic announcements and this is why they have the most movement. Unemployment, payrolls and inflation numbers are key indicators for any economy and for the U.S. they are announced on Wednesdays and Thursdays You might wonder why they have such a wide impact, even beyond the actual “reach” of U.S. companies and government?

The answer has two components – the first is that the dollar is the most popular currency in the world, both in commercial trading and as a reserve currency by central banks. The second is that the U.S. economy is the most connected. Sitting between Europe and Asia, the resource rich Canada and the dynamic economy of Mexico, it’s safe to say that they are at the crossroads of the main economic highways. For now.

Numbers from Japan, Germany, Britain, Australia and most recently China can on occasion have the same impact, but it’s less frequent and they would have to be considerably different from estimates and expectations.

In part three tomorrow, which will be online at 4:00pm GMT,  we will round off when trading action happens with a breakdown of volatility for each instrument type – currencies, stocks, indices and commodities.

How Many Instruments Should You Trade?

How Many Instruments Should You Trade

How Many Instruments Should You Trade

Should traders look for all opportunities or focus on one sure thing

This is a choice many new traders face when they open their accounts and see the vast selection of instruments. Not to mention brokers advertise the many possibilities they offer. It’s always better to have a choice, but making the right one among those available can prove crucial to your trading success. Continue reading “How Many Instruments Should You Trade?” »

5 Common Mistakes New Traders Make and How to Avoid Them

5 Common Mistakes New Traders Make and How to Avoid Them

The most frequent pitfalls of trading

Starting out on the trading path involves different challenges and obstacles. Beginners tend to jump right into the action and might, inadvertently, handicap themselves from the get-go. There are five common mistakes new traders tend to make time and again. With this heads-up you can avoid them altogether and gain a better understanding of what it takes to be a successful trader.

Continue reading “5 Common Mistakes New Traders Make and How to Avoid Them” »