Wondering How to Succeed as a Part-Time Forex Trader? We have an answer right here. There are many strategies that can help part-time traders.
Xtrade - Few traders are able to trade Forex full-time. In fact, most traders trade at night, at work, and during their lunch breaks. What this means, of course, is that these traders will often miss opportunities to buy and sell. This can result in a serious loss for the part-time trader, who may be sleeping when the market moves against his trade.
How to Succeed as a Part-Time Forex Trader?
Fortunately, there are many strategies that can help part-time traders. These strategies will help you even if you are only available to trade for an hour or two a day.Let’s look at them.
Choose a Time Block and Trade the Most Active Forex Pair
Many part-time traders trade before and after work (in the morning and the late afternoon). The best strategy for such traders is to trade the most active Forex pairs during these times. Take a few minutes to memorize the following time frames. (For the purpose of this article, we’ll use Eastern Standard Time)
- New York: 8:00 am to 5:00 pm EST
- Tokyo: 7:00 pm to 4:00 am EST
- Sydney: 5:00 pm to 2:00 am EST
- London 3:00 am to 12:00 noon EST
If you choose to trade Forex at night (that is, night in the East Coast of the United States), a good choice would be the EUR/JPY and the EUR/CHF or pairs that include, for example, the Hong Kong Dollar (HKD) or the Singapore Dollar (SGD). If you’re an evening trader, the AUD/JPY is a good choice. But remember: it’s not enough to trade what’s most active during your chosen time frame; you’ll also need, before placing any trades, to read the technical and fundamental analysis regarding your currency pair. This information is available in charts provided by your broker. The charts—candlestick, line, and bar—are remarkably easy to read and understand.
Use Stop-Loss and Take-Profit Orders
We can’t emphasize this enough: use stop-loss orders. Your computer (or phone) is your trading partner—one that stays awake while you’re sleeping. The Forex market is fluid, and the last thing you want is to miss a trading opportunity while you’re engaged in something else. So, the best strategy for the part-time trader is to use Stop-Loss and Take-profit orders: the former will stanch losses if the market moves against you, the latter will close your position when profits reach a specified level.
Many traders neglect to use Stop-Loss and Take-Profit orders, choosing instead to succumb to anger (when the market moves against their position) and greed (when the profits start rolling in.) Don’t emulate these traders. Be disciplined.
Use Price Action Trading
A helpful strategy for traders who like to trade in spurts (10 minutes here, 20 minutes there) is price action trading, sometimes referred to as “trading from charts.” The three major charts in Forex trading are a candlestick, line, and bar (there are others, but most traders use one of these). As mentioned above, these charts are easy to read and understand. Choose the one you like and learn to identify downtrends and uptrends at a glance. Then place your trades accordingly.
Use Swing Trading
Many part-time traders are swing traders—traders who, unlike day traders, hold their positions for days or weeks. Swing trading is less stressful than day trading and is a great option for traders who want to dabble in the Forex markets. Why? Because it doesn’t require a serious commitment of time and effort. Swing traders set up their Stop-Loss/Take-Profit orders and then step away from their computers. Unlike day traders, they do not have to monitor their trades closely.
Use Your Mobile Phone
One of the most useful tools in Forex trading is your mobile phone. A good broker will send you SMS messages every day, notifying you of opportunities, risk, and margin. If you are broker’s mobile platform is inferior to its desktop version, find a new broker. Part-time traders cannot spend all day in front of their computers; they need state-of-the-art mobile trading services.
The Takeaway
Part-time traders will find opportunities for profit in the Forex market, for it is open at all hours and in constant flux. That, of course, means that it is also a risky market. You will minimize this risk by trading active pairs, using price action and swing trading strategies, and filling out Stop-Loss/Take-Profit orders every time you trade.
About Xtrade
Xtrade is an award-winning brokerage that offers CFD trading on stocks, indices, commodities, and currencies. Its cutting-edge technology, available on both desktop and mobile devices, includes five digital trading platforms. These are accessible to traders across Europe, Asia, and Australia in over 40 languages. The company also offer a sophisticated trading education centre, real-time financial news, and innovative trading tools. Xtrade’s Global Ambassador is Cristiano Ronaldo of Real Madrid, who features on the company’s digital hub. Moreover, Xtrade is CySEC regulated and complies with the EU’s Markets in Financial Instruments Directive. It also has the licence from the Australian Securities and Investment Commission, and South Africa’s Financial Services Board.
For more information, please contact Kyley Picov at Kyleyp@xtrade.com
Think we missed something? Let us know in the comments section below.