I have a confession to make.
I’m completely addicted to trading.
I just love the charts. Regardless if I’m winning or losing. I love analyzing price action, testing strategies and finding trading opportunities.
Sounds familiar, you say?
It’s not uncommon. We forex traders are a passionate breed. However, after 5 days of trading, the retail forex markets close. Time to relax and spend time with friends and family. But weekends are also the perfect time to sharpen your forex skills! It’s when most of us actually have some time to research, learn and improve.
The three great essentials to achieve anything worthwhile are, first, hard work; second, stick-to-itiveness; third, common sense.
― Thomas A. Edison
“But the markets are closed! What is there left to do?”
Actually, there’s plenty to do in weekends if you want to sharpen your forex skills! Here are my top 5 tips to improve my forex knowledge in weekends.
Top 5 weekend activities for traders
1. Review your trading week
The first thing I do as the weekend begins is to review the past week. I take my trading journal with me, look at the trades I took and review them on a number of different points:
How was my weekly performance? Did I end up with a profit or loss? What’s my overall R-multiple for the week?
Did I follow my trading plan on every trade? If not, was there a valid reason?
How did I feel emotionally during trading and what is my overall sentiment about the past week?
Can I make improvements to my trading plan based on new insights?
2. Backtest / refine strategy
Secondly, for certain parts that I can automate, I will develop backtesting strategies and try to optimise and refine my current strategy. Based on the input of my trading review, can I improve on certain things?
I look at all aspects of my trading plan such as entry conditions, exit conditions and trade management. Am I triggering trades too soo, suffering from fear of missing out? Am I losing out on profit? What is my MAE and MFE? Everything gets a good look.
Note that this doesn’t mean I’m changing my trading plan every week! I want to make sure it is beneficial in the long run and not just due to luck. I also want to make sure that the change is in line with what I’m comfortable with personally. If I find something that could be improved upon, I will go through a rigorous backtesting and forward testing period.
Benefits of strategy testing
It validates your trading idea
The most obvious one is that it allows you to validate a trading idea and strategy against a set of test data to see if there’s any validity to it. This new idea might sound like a good idea, but unless I’ve tested it, I’m not going to trade it. Weekends provide an excellent opportunity to validate my trading ideas.
You believe in your trading plan
The second benefit is that it actually will make you a confident trader who believes in their own trading plan. Believing in your own plan will make sure that you stick with it when the price goes against you temporarily. Confident (not overconfident!) traders make solid decisions, stick to their plan because they believe in it and will have better results overall.
For backtesting, I’m using with StrategyQuant and Forex Tester 2. If you’re serious about testing your strategy, I can highly recommend both.
3. Read (trading) books
Even though my reading happens in waves, I try to read at least one book at any given time. After a week of screen time, I find it provides a welcome change from the charts. And as a lifelong learner, I find that by reading books – even if they’re not related to trading – I’m improving as a trader.
To give you an example: I recently read Thinking, Fast and Slow by Daniel Kahneman. It’s by no means about trading but instead tackles cognitive science and behavioural patterns.
After reading it, I found that a lot of cognitive behaviour could be applied to trading and I actually implemented some of the things I learned in my trading strategy.
Check out some of the best forex trading books I’ve read and recommend.
4. Currency analysis for the week ahead
This is my Sunday activity. Every Sunday, I take my currency pair watchlist and go through them, one by one, applying my trading plan and looking if there are interesting opportunities to spot.
I’m writing down short summaries for every pair that I find promising and set the necessary price alerts for the week ahead. Of course, this works better if you’re a medium-term trader like me and not if you’re scalping.
Doing this on Sunday has multiple benefits: since you completely split up the trade analysis and the trade entry, you won’t be tempted to enter trades and spend more time on proper analysis.
Additionally, it allows you to focus on the week ahead with a clearly defined set of currency pairs on your radar. The price alerts allow me to step away from the charts during the week as well. Much less distraction, much more time for other activities.
5. Go outside and see friends and family!
Research has shown that just by walking, you will increase your creativity. It was the favourite pastime of brilliant physicists such as Niels Bohr. Just by being outside, you could come up with fresh ideas that hours of staring at the charts might not have resulted in.
Or try some sports! For example, I’m going rock climbing (indoors mostly). Interestingly enough, the benefits of rock climbing and the skills required to be a good trader overlap quite a bit! Each climbing route is like a puzzle, which requires patience, planning and analysis to complete. Over time, regular rock climbing can help develop concentration, determination and problem-solving skills. Sounds like useful traits to have when trading!
And finally, plenty of research has proven that social interactions will benefit your immensely, both in a physical and mental way. Trading might be what we’re passionate about, but there’s nothing more important than friends and family. Go out and meet up, it’s weekend after all!
What are your favourite activities in weekends? Leave a comment below!
