There are very few people that can trade forex full-time. Trading irregularly during a small section of the day results in lost opportunities to buy or sell, according to traders who have to make their deals at work, lunch, or even at night. This is because the market is so fluid. The consequences of these lost chances might be disastrous for the part-time trader.
Despite the possibility of passing up chances, there are tactics that may be implemented on a part-time basis. For instance, traders who work nights can be restricted to the currencies they can trade depending on 24-hour volume. The technique that these night traders should use is to trade just the currency pairings that are most active at night.
Trading the Australian dollar (AUD)/Japanese yen (JPY) pair or the New Zealand dollar (NZD)/JPY or AUD pair would serve as an example. When selecting a pair, it is crucial to consider the connection between the currencies since having time during the day to research the market and execute transactions might result in a successful approach.
As a part-time trader, time limits are the biggest challenge. Here are some tactics for trading part-time when your schedule is erratic.
Understand the Forex Markets
You might trade before or after work if you work a nine to five job in the U.S. Picking the most active currency pairings throughout such time periods is the best trading approach (those with the most price action). The choice of significant pairings will be aided by knowing the opening hours of the major currency exchanges. EST hours for New York are 8:00 a.m. to 5:00 p.m.
From 7:00 p.m. until 4:00 a.m. EST, Tokyo is open.
From 5:00 p.m. until 2:00 a.m. EST, Sydney is open.
London is open from three in the morning till noon (EST).
Part-time traders can select popular currency pairings because the markets in Japan and Europe (open from 2:00 a.m. to 11:00 a.m.) are active. These include pairs involving the Hong Kong dollar (HKD), Singapore dollar, or the EUR/JPY pair for major currencies (SGD).
Part-time traders who are accessible between the hours of 5 p.m. and midnight may also find success with the AUD/JPY pair. While it’s important to know which currency pairings work best for your schedule, a trader should do further research on these pairs and the fundamentals of each currency before making any bets.
Orders to Prevent Losses in Forex Trading
Allowing your computer to be your “trading companion” may be the greatest approach for part-time traders. Given how erratic and difficult to monitor the forex market is, having the opportunity to use a trading software where you can let the information technology work for you might be advantageous. Another popular tactic is to use stop-loss orders, which protect your money in the event that the market suddenly moves against your position.
Forex Price Action
A method is also available for part-time traders who come and go from their jobs (10 minutes at a time). Implementing a price action trading technique may be possible during these brief but frequent trading sessions. Trading using price movement involves examining the technicals or charts of the currency pair to guide decisions. Traders can examine down bars and up bars (bars with higher highs or lower lows than the preceding bar) (a bar with a lower high or lower low than the previous).
While down bars indicate a downtrend and up bars an uptrend, other price action indicators may be within or outside bars. Trading off of a chart timeframe that best fits your schedule is the key to success with this method.
Additional Forex Trading Techniques
As a part-time forex trader, you could find these tactics useful as well:
Fewer trades or positions – all held for several days
It is crucial that you are aware of the factors that influence your currency pairings and that you have taken the time to thoroughly comprehend your market. Therefore, choosing a small number of positions and holding them for a longer length of time is a wise approach for part-timers after monitoring the market and focusing on a few specific currency pairings. Another smart technique is to use stop-loss orders in all of your trades to reduce losses in the event that the market turns against you.
Take note of long-term patterns
Instead of looking at hourly or even four-hour charts, there is benefit in looking at longer-term patterns (daily/weekly). As a result, you will be able to trade while simply using your computer once every day.
Create trade orders
You may make sure you don’t miss opportunities to enter or leave positions by setting limit, stop-loss, or other entry/exit orders. The majority of trading systems support these orders without charging extra.
While you are not actively trading, set up automated alerts to your email or mobile device to keep you aware of changes in currency prices.