When to Take a Break from Trading

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Are you switching from chart to chart in search for a trade, and eventually enter a losing position? Are you eager to take revenge after this losing one? Is your nose becoming too friendly with the screen?

Taking a break can help you refocus. Taking one step further, it is wise to schedule these breaks. Here are a few ideas of how and when to do it.

When you train your muscles in any kind of sport, you push your muscles further out and strengthen them. But building your muscles can’t happen with training alone. Rest is needed in order to allow them to rebuild and become stronger.

The same works for forex trading: you need time to absorb the intensity that you’ve encountered. And you need time to clean your head as well. It doesn’t matter if you already turned into a professional full time trader or not.

Taking a vacation from trading will definitely allow you to clean your head. But you don’t always need a full vacation: just some time off. And when you’re back, you’ll be more focused and achieve more in less time.

When can you rest?

When you are tired

If you’re a morning person, don’t trade at night. The same thing goes the other way around: a night owl shouldn’t trade early in the morning. Trading when you’re tired isn’t efficient, even if it is the most exciting trade session.

Don’t worry, there are enough exciting trade sessions at other times – sessions that will feel more natural to you.

When the market behavior doesn’t fit you

If you’re into extreme moves, the overlapping European and American sessions on a Friday fit you best. Stay away from the Sydney session. On the other hand, if you prefer range trading, go for other sessions, and skip the most volatile ones.

Adapting trading times to your behavior is easier than adapting your behavior. So just rest when conditions don’t work for you.

News events

Some people like to trade them, and they should stay away from times that are sparse with events, such as Mondays. Why not enjoy a long weekend?

On the other hand, some traders prefer to shy away from uncertainty, at times with many simultaneous releases, so they should skip some Thursdays, which usually have crowded calendars.

I guess you get my point by now.

Do you take breaks or stay addicted to the screen? 

I’d love to hear which times are favorable for trading, and especially at which times you just turn your back to the screen…

Further reading: 5 Most Predictable Currency Pairs

Get the 5 most predictable currency pairs

About Author

Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.

6 Comments

  1. I think it is wise to limit the losses per day as a part of the trading plan. For example, if you’ve lost 5% then you should stop…. take a break… and trade again tomorrow..

  2. I agree with Adianto, when I am losing too much or making bad decisions, that is when it is time to step back for the night or even for the week and regroup.

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  5. L. C. Chong on

    Perhaps, we can apply System Stop to our money management rules.

    Even though we know our own strategies have an edge, there is no guarantee they will continue to have an edge into the future. Just as we should always trade with a stop, so we should trade with a system stop. Using a system stop on each of method will prevent us from losing the farm.

    My personal rule on System Stop for all trading methods is I will reduce risk parameter for a particular method, where the method caused 6% drawdown in my account balance. When this happens, I will reduce risk per trade. I will resume trading with normal risk parameter using the particular method if I managed to gain back over 70% of the 6% drawdown.