Many Forex investors do not have the time to trade full-time. Instead, they focus their efforts on part-time trading in the evenings or during breaks in their workdays. That’s the beauty of the 24-hour Forex trading cycle – traders can earn profits in as little as one or two hours each day.
However, the strategies used for part-time traders differs greatly from those used by full-time traders.
Firstly, as part-time participants cannot continuously analyse charts, they more likely to miss out on opportunities to buy and sell during market hours. This challenge can be worked around by using automated trading as well as a number of other strategies.
Secondly, since most part-time traders tend to trade at night or during the early morning, they must deal specifically with currency pairs that have the greatest volumes at these times. Day-traders, on the other hand, can trade different pairs throughout the day as global markets open and close. Fortunately, with proper strategy, part-time investors can start earning income consistently. Here are some tips part-time traders can utilise:
Determine which markets you will target
As the Forex market is open 24 hours, focus your attention on the markets that are open when you want to trade. For example, a Sydney-based trader that works during normal business hours has two options:
- As the Sydney market opens, the U.S. market closes. As such, the investor could trade during the early morning hours before Sydney’s market opens when volumes for USD pairs are at a peak. Or,
- The trader could also open positions in the evenings as the European markets open.
Automate trades to minimise risk
Part-time traders can minimise risk by using automated market orders. This helps to limit their exposure to risk and enable them to enter and exit trades without access to a trading platform. Some common examples include stop-loss and take-profit orders, which both automatically close trades. Many Forex platforms also enable traders to set orders based on specific criteria, i.e. an order that opens a positon if the price moves to a certain point.
Ensure you stay informed
Unexpected news, political turmoil, and monetary policy decisions can shock the markets and set off quick market reactions. Part-time traders must take steps to ensure they don’t miss these important events as they occur. There are two steps part-time traders can take:
- Firstly, the trader should create a calendar that shows when major news releases are scheduled like FOMC data or central bank press conferences.
- Secondly, the trader should utilise smartphone apps and alert systems that provide real-time notifications for important market news.
Focus on longer timeframes
Many part-time traders choose to open longer-term positions. This allows the trader to look for macro-trends instead of intraday trends. Plus, these types of trades can lead to larger per-trade profits, which is helpful for an investor who doesn’t have the time to open many positions during the week.
Many Forex investors start as part-time traders, but it’s important that they know the strategies to use that will help them succeed.