With an eventful economic week ahead, it can be tempting to try to catch pips from every single top-tier catalyst. But can this do more harm than good?
Contrary to what some might think, staying on the sidelines doesn’t necessarily mean that you’re a lazy trader.
In fact, there are cases when sitting tight and refraining from taking any setups is a trading decision in itself.
This goes out to catalyst-hunters who trade news events. Just because your tried-and-tested economic calendars have marked a particular report as a potential market-mover doesn’t mean that you absolutely have to trade it.
In order to trade an economic event, you must first have enough research and observation about it.
- Have you considered different scenarios?
- How will you manage your trade in case any of these potential scenarios played out?
- Has a similar event taken place in the past and if so, how did price react?
If you can’t answer these questions yet or if you’re uncomfortable subjecting your positions to insanely volatile conditions, then you might be better off watching by the sidelines.
But instead of tuning out and watching Netflix during the event, you can note its impact on the markets, on the trade setup that you were thinking of taking, and how you could’ve made profits. This is all part of deliberate practice!
While taking advantage of market opportunities is a huge part of becoming a consistently profitable trader, it doesn’t mean that you should have to take trades for the sake of being in a trade.
Sometimes it’s better for your account and trading confidence to just sit on the sidelines and cherry-pick the best setups.
Don’t worry, the markets will offer plenty more opportunities for you to grow your account!