Secrets of Part-time Trading: A Part-Time Day Trader’s Guide

A lot of people are interested in the forex market but don’t want to pursue it as a full-time career or give up their day to do it. So, if you are interested in foreign exchange (forex) trading but can’t make it a full-time pursuit, you can still create a profitable venture as a part-time forex trader.

First of all, the 24-hour nature of international financial markets means that there are possibilities for earning money throughout the day and night. So, as one region of the world closes its doors for the day, another one opens.

For example, in the UTC zone, in which the UK sits, some of the leading stock markets are as follows:

• London: 08:00 hrs – 17:00 hrs
• Tokyo: 12:00 hrs – 21:00 hrs
• New York: 13:00 hrs – 22:00 hrs
• Sydney: 22:00 hrs – 07:00 hrs

So, if you plan to become a part-time day trader, you will find the time to do it. Moreover, the technology available to assist in trading in foreign currency provides new opportunities to dip in and out of the market as you choose.

You can use fully automated trading software (known as forex robots or EAs) that analyzes currency fluctuations, reads the market, and carries out trades on your behalf.

It is quite easy to get drawn into forex trading, and, for many people, it can prove to be all-consuming. Without a doubt, the fast pace and excitement of trading in this dynamic market, nevertheless, you don’t have to trade full time to benefit from it.

Recommendations for forex traders

People are interested in forex. Open Google Search and type “part-time trading,” “part-time forex trading,” or “Can I make money day trading part-time.” You will find many links.

Hopefully, you don’t need a lot of money to become a forex trader. Interestingly, as long as you are committed, you can become a forex trader even with little available time, approaching it as a hobby as you learn the ropes.

Besides, as a part-time forex trader, you will have the flexibility to pursue other interests.

How to become a successful  part-time forex trader

It is recommended to pick a time that suits your schedule. Forex trading in a small period of time can work; nevertheless, you need to have a clear strategy in place.

An example of a strategy that can potentially yield good results in a limited time period is scalping. This involves a trader holding a currency for just seconds or minutes and repeating it a number of times. These trades may only bring small gains; however, these can be magnified with increased position size.

Nevertheless, this style of trading can hold increased risk, so be sure to weigh this up before every trade.

Don’t waste your time! When you only have a limited amount of time, there is a chance that there won’t be suitable trades available when you log in. Hopefully, you can still use this time effectively, though.

Do you know what backtesting is? It is the process of reviewing historical data to see whether a particular strategy would have worked and is the ideal way to practice without risk.

Need more practice, don’t worry! Further practice opportunities are available thanks to software that allows you to experiment with running virtual trades to see how you would have performed in a real-time scenario.

You can use a trade journal. Many people might ask: What is a trade journal? It is a written record of all your trades as well as trading activity. You complete a trade journal on a daily basis, using it to plan, reflect and refine your trading strategy. This may seem a bit basic, but in order to become a forex trader, you need to be methodical and thorough.

What you need to know if you plan to become a forex trader

You need to focus on currency pairs that are active when you want to trade.

People unfamiliar with the forex market may find it hard to understand what a currency pair is all about. It is the price quote associated with the exchange rate of the two currencies that you are going to trade. Notably, every trade is based on a currency pair.

Common currency pairs are the USD/EUR (US Dollar/Euro, USD/JPY (US Dollar/Japanese yen) as well as EUR/GBP (Euro/Pound Sterling).

A part-time trader’s daily routine

The time of day you are available to trade dictates which international markets are active at that moment and, hence, which currency pairs are best to focus on.

As a part-time forex trader, you may find that morning is the best part of the day to trade before you start your working day. For instance, stock markets in Tokyo, Sydney, and London open simultaneously at 8 a.m. UTC.

You might be surprised, but it is possible to become a forex trader alongside working a full-time job, but it takes careful planning and time management.

People can trade during morning hours while some of the world’s biggest stock markets are active, then catch up with the end of day analysis and charts to review the day. They may also decide to trade in the evenings if you find that currency pairs that appeal to them are active at that time.

When you only have limited time, every minute counts, and taking your time to deliberate over every decision just is not feasible. By doing your homework, spending time watching the charts, journaling as well as backsetting, you can have your strategy in place to act quickly.

As you are limited in time, you could set a strategy of ending your trade as soon as a profit is gained, without holding on to wait for longer-term fluctuations.

Why is it important to set realistic goals?

You should keep in mind that trading can be a highly emotional endeavor. Moreover, as a part-time forex trader, you need to be cautious about moving too fast, too soon. Be realistic about what you can achieve in the limited amount of time you have at your disposal.

If you set unrealistic goals and then inevitably fail to meet your goals, this may result in an emotional response that can lead to unwise trades that incur heavy losses.

Conversely, if you set achievable goals, you can play a strategy to reach each one, reviewing it and moving on to the next small goal after that.

There is no lack of software programs and online tools which will help you automate your trading. For an inexperienced trader, a fully automated trading program can monitor charts, decide when conditions are favorable, and actually run your trades for you.

Other tools allow you to automate parts of the forex process that you need help with, such as keeping abreast of news, finding currency as well as calculating pips.

A handy tool is a stop loss. Notably, this is an automatic stop that is activated when an order reaches a specified loss level. So, for instance, if you specify a stop loss of 20 pips when a trade drops to 20 pips lower than the entry price, your trade automatically stops.

It is noteworthy that the stop-loss process prevents traders from making heavy losses due to the need to end the trade manually. As a part-time forex trader, using automation in this way can help you manage your risk.

Online forums and online communities

One of the best, if not the best, ways to become a good part-time forex trader is to learn from those who have gone before you. There are many people who have tried and tested all the possible strategies, tools, and methods and are happy to share their findings online.

Don’t forget that online forums provide opportunities to search for and read about any aspect of forex trading. For example, if you have a particular query, you can start conversations yourself, asking for direct advice.

There are both free as well as paid options, and opinion is divided on which are better. Even though free online forums contain an abundance of information on all sorts of aspects of forex trading, not all information is correct or valuable.

Of course, contributors to paid forums are also anonymous; nevertheless, the commitment of registering and paying to participate in a private forum indicates some level of seriousness and dedication to learning and sharing trustworthy information.

There are various trading strategies you will need to understand as a part-time forex trader. Scalping, as mentioned earlier, is just one strategy out of many. As an independent trader, it is completely up to you how long you hold your trade for.

Furthermore, an alternative strategy is taking a more extended position to hold the trade for days rather than minutes. This strategy is known as swing trading, as you are monitoring medium-term swings to try to determine when best to trade. Swing trading suits a part-time forex trader perfectly, as this strategy requires just enough time each day to keep an eye on what the markets are doing.

Final thoughts

The above-mentioned strategy requires patience as, in the short term, the rates will fluctuate, and you have to hold your nerve until rates come back up. Interestingly, stop losses will also have to be more significant to allow for a greater swing than you would tolerate in a short-term trade.

Deciding to become a part-time forex trader is a viable option if you have the patience as well as commitment to research the markets and watch closely before going all-in.