Set & Forget Forex Trading
As the name implies, Set & Forget forex trading means that you set up the trade and then forget about it. By using this strategy, you’ll follow your trading plan exactly by removing all emotions from the situation and it will allow you to trade without actually being in front of your computer for a long period of time. It is also a great way to overcome analysis paralysis, an over-analysis of the trading situation. It has been shown that spending less time in front of your screen can actually lead to better trading results. It reduces emotional stress which can lead to over-leveraging your funds or over-trading. However, Set & Forget forex trading is a strategy that should be used with caution and only under certain circumstances. Let’s try to understand its benefits in this article.
The Negative Impact of Over-Analyzing
Most new traders spend as much time as they can, analyzing the markets. However, it has been shown that more is not necessarily better when it comes to this area of trading. In fact, it has been shown that spending too much time analyzing the market data can actually make you lose money faster. This is because the trading market is so vast. There are too many variables for anyone to keep track of and too many variables that can cause a price to move. Spending hours pouring over market data in an attempt to control the variables is futile and the longer you spend in front of the data, the more emotional stress this will cause you. We all know that stress and anxiety leads to poor decision-making and more money loss when it comes to trading. Analyzing the market over and over again and tweaking and then retweaking strategies to control variables that cannot be controlled, is more likely to lead to a cycle of losing.
How Set & Forget Can be Useful
Of course, every trading career must start with market analysis, strategy development, and strategy tweaking. The key is to know when your strategy is good. Pro traders know when to take a step back. They know when they have created and mastered a good strategy. They implement their trade and if their edge is there, they make money. If their edge is not there, they stop trading for a while and try again another time. Re-analyzing, changing trade parameters, or changing stop losses or target profits more commonly lead to more losses.
Successful trading has more to do with how we control ourselves and our trading than it has to do with analysis. Of course, analysis is a fundamental part of developing a trading strategy, but over-analysis can actually be your downfall. Trading is one area where more is usually not better. The Set & Forget forex trading strategy helps to remind us of this fact. It reminds us to take a step back and trade more objectively, leaving our emotions at the door. If you use this strategy correctly, in certain situations, you can find it beneficial.