Getting a handle on the forex market is a big ask for any kind of trader, but more so, perhaps, for those who trade part-time. With extra pressure due to time constraints, demystifying forex strategies, terminology and keeping up with the news pose quite the challenge for those who only devote part of their day or night to the market.
That said, there are tips and guides that can help part-time traders overcome common hindrances and develop a trading plan that’s suited to their usual day-to-day. FXTM Senior Staff Writer Nikola Grozdanovic dishes out some handy suggestions for anyone who feels like they may be struggling to fit trading into their schedule.
Sync your time with the market
Operating 24 hours a day, 5 days a week, the relentless pace of the forex market is what makes it so attractive to part-time traders. It gives people with day jobs and other commitments a chance to pencil trading into their diaries at any time of day or night.
Even so, part-timers need to remember that all currency pairs are not made equal in the eyes of the trading sessions. As one session closes and another one opens, or certain sessions overlap, so do currencies fluctuate in strength and activity. Thus it’s very important – crucial even – to synchronise the time you devote to trading with the session that’s open when deciding on a currency pair.
Here are the opening and closing times (in GMT) of forex market sessions:
Frankfurt: Opens 06:00, Closes 14:00
London: Opens 07:00, Closes 15:00
New York: Opens 12:00, Closes 20:00
Sydney: Opens 22:00, Closes 06:00
Tokyo: Opens 23:00, Closes 07:00
What this means is that part-time traders who can, for example, trade in the 17:00-00:00 GMT timeframe might look at the most active pairs during most of the New York session and the beginning of the Sydney and Tokyo sessions. All major currency pairs, i.e. those including the USD in the pairing, are quite active at this time. You can even venture off into minor pairs like AUDJPY to coincide with when Sydney opens and right before Tokyo starts to overlap.
Consider long-term positions
Since it’s difficult for part-time traders to regularly monitor market movements, and respond in time to sudden movements, short-term trading may not be their cup of tea. Not to worry! There are benefits to long-term trading – it’s just a matter of picking and sticking to a strategy that suits it. The wider perspective taken in position trading, for example, may prove to be more beneficial in the long run.
As a long-term strategy, position trading requires traders to inspect daily and monthly charts in order to uncover trends in the market. They can do this in their own time, and once they do find a trend, they can choose to keep their position open for longer periods of time – sometimes even for months or years. This strategy reduces the pressure of constantly needing to monitor trades.
Acquire the knowledge and never stop learning
It could be easy for part-time traders to convince themselves that they have no time to thoroughly educate themselves about forex, but this would be their greatest disservice to themselves. In most cases, those who are not properly informed about trading end up facing dire financial consequences.
Many brokers offer educational resources, usually for free if you decide to trade with them. FXTM, for example, has an abundance of educational resources to choose from – including regular webinars, Ebooks, articles and videos. While it’s especially tough for part-time traders to attend live seminars or workshops, this opportunity should not be passed up if it presents itself. These public events are fantastic occasions where part-time traders can meet their peers and ask direct questions to market experts.
Trade on-the-go with trading apps
Trading apps are almost designed with part-time traders specifically in mind. People who don’t have time to sit at home or in their office while trading or looking through market activities will find trading apps especially handy. And it’s not just the actual opening and closing of positions on-the-go that can be useful for those on the constant move – reading up on breaking forex news, skimming the latest piece of analysis for their instrument or looking ahead with an Economic Calendar can prove to be real time-savers for the part-time trader.
Keep calm…and trade wisely
This doctrine is important whether you’re a part-time trader or someone who has made it their career. In fact, it would be highly unlikely a professional trader could get to that position without keeping a cool head and practising discipline. But this tip is especially important for part-timers because, more often than not, it’s they who tend to let their emotions take over and make snap-second decisions – usually because their minds are elsewhere, like on their regular job.
If you’re a part-time trader, do not fall into this trap! Always remember that cooler heads prevail in the market. One way these disciplined and patient traders keep their focus is by using popular techniques, such as stop-loss. This is a good way of smoothing out the emotional edges. Stop-loss orders automatically close a position when the price reaches a certain set limit on the chart, thereby minimising and controlling losses. For part-timers, pending orders like stop-loss can help ease the mind.
If you’re a part-time trader, or considering becoming one, the above suggestions may help you overcome the extra challenges you face compared to full-timers.
Learn more about trading with a globally trusted broker by visiting www.forextime.com.