The Importance of Timing for FX Traders

Timing our trades is one of the most important aspects, but not all retail traders seem to understand why it’s important. They’ve struggled so much to generate profits that their only goal is to see trades ending up in the positive territory. However, if your goal is to become a professional trader, then timing your trades is one of the most important requirements. In case you’re still skeptical that this is crucial, here are three of the main advantages generated by proper timing.

#1 Improving risk parameters

When the timing is good, the stop loss can be narrow and the take profit much wider. That means the risk-reward ratio increases and with it, the probability of you making money in the long run. Of course, you want to be right in terms of the market direction, but you must be right at the optimal point. Although it won’t happen often to see the market surging to your target in a straight line, you can find good support/resistance levels, because that’s where important market moves will start to unfold.

#2 Managing positions with lower stress

Aside from the fact that you’ll manage risk like a pro, your emotional condition during the management phase of the trade will be easier to manage. When the market swings up or down, moving your balance from positive to negative and vice versa, you generally start to question your ideas and start thinking if it would be better to get out. Many times, you’ll find out that the trade direction was good, but the timing was inaccurate. Trade frequency is critical in this case because you won’t manage to find several well-timed opportunities every day. You’ll miss many, but once you find one, you must pull the trigger.

#3 Designing an affordable trading schedule

The market is always unpredictable and as we’ve recently seen, there are downside risks for the FX market this summer. However, a well-timed trade won’t bother you too much, since your entry location will be optimal and any unexpected market swing will create little damage to your trading account. That way, you’ll manage to build a forex trading schedule, even when volatility surges. This is not something many traders can do and if you can, that will mean you’re already way ahead of the majority. Hopefully, you are now more aware of the importance of trade timing, and from this point forward, it will be one of the top priorities.

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