Is Part Time Trading Worth Its While?

A significant number of people trade in stocks and the forex market part time. However, while several people take this path, not everyone is successful. Some of the problems that part time traders tend to encounter include an absence of structure, a lack of clear vision, as well as little to no accountability. Besides, trading sporadically may lead to missed opportunities. So, can you make part time trading work for you?

Part Time or Casual

It is important that you distinguish between part time and casual trading at the very onset. While many traders recommended part time trading, it requires that you trade every day, during the times that are most conducive. This leaves you with time to pursue your regular job or anything else you might fancy. A casual trader, on the other hand, is one who trades whenever time permits, or at least, not regularly.

Casual trading is not the best way forward because markets act differently at different times, and trading indiscriminately does not make for an effective strategy. Without set times, there is little chance that your trading will have any suitable planning or structure. While part time traders trade almost every day, casual traders might not trade for days at a time.

 

Do You Enjoy Trading?

Gav Smythe, the founder of iCompareFX.com, opines that you should “consider jumping on the trading bandwagon only if you enjoy the process, and not just with the aim of making quick money.” He adds that, “if you are fascinated by trends in everyday life and like analyzing them, you may well be cut out for trading part time.” However, if you plan to carry on depending solely on the advice of others, you might have a rough road ahead.

 

How Well Do You Manage Money?

Effective money management skills make all the difference between successful traders and the ones who are not. For instance, traders worth their salt understand that high returns come with high risks. As a part time trader you might do away with taking higher risks because you have a regular source of income. On the other hand, part time traders with regular sources of income might end up spending unnecessarily, and to no good effect, by trying to right previous wrongs.

Image of a number five that is actually relates to a part time trading concept.

5 Tips to Succeed as a Part Time Trader

If you’ve decided to test the waters, following these pointers might hold you in good stead.

1. Time Matters

Most part time traders devote anywhere from one to three hours toward trading every day. What helps is that the highest returns possible in short spans of time, typically concentrate around the opening and closing times of trading. In the United States, these are 9:30 am EST and 4:00 pm EST, respectively. During your early days, you should ideally be prepared by around 9:15 am. Bear in mind that the first half an hour is typically the most volatile, and consequently, offers the most potential.

Image of a time in relation to the part time trading.If you cannot make time to trade in stocks when the market opens, you may consider trading in the forex market because this sphere depends on different time zones and offers a more flexible alternative.

New York is open from 8:00 am to 5:00 pm EST, Tokyo is open from 7:00 pm to 4:00 am EST, Sydney is open from 5:00 pm to 2:00 am EST, and London is open from 3:00 am to 12:00 pm EST.

 

2. Step In, Don’t Dive In

A diving man from a boat is trying to understand the part time trading in his own way.The ability to buy or sell excessively in comparison to your trading capital comes with a pitfall. As a newcomer, you might be inclined to increase your position sizes considerably after a few successful trades.

However, such a move might increase your risk by a significant extent. What typically follows is fear. It is important that you use as little leverage as you can to keep the excessive apprehensiveness in check.

 

3. Watch Your Ego

Image of a sad man that is looking down trying to capture a part time trading light.

You might be surprised to learn that a significant percentage of trades result in losses. It is crucial that you do not beat yourself down about trades that turn sour, and you definitely need to avoid making aggressive bets to rectify things right in such a scenario.

Keeping your ego under control as a trader is important because you really need to know when to put the brakes. It is not without reason that even experts choose to wait out periods that they might consider uncertain.

 

4. Consider Swing Trading

Image of a swinging golfer representing the part time trading league.

Swing trades typically last for two to six days, but they may even last for months, keeping in mind market conditions and trading strategies.

While part time traders get different strategies from which to choose, the aim of most is to determine any given stock’s sweet spot or the direction in which it is trending.

Given that swing trading does not depend on a particular entry or exit points, and traders don’t have to keep track of the market at all times, part time enthusiasts may benefit from this type of trading.

 

5. Set Target / Stop Levels and Breathe Easy

Image of a peaceful woman that is capturing a part time trading moment.

It is common for new part timers to enter trades and then continually keep track of their positions. However, this may result in over trading, which can be a particular concern if you are swing trading and looking at hitting the sweet spot.

Before you carry out a trade, research your position well and set target/stop levels accordingly. Then, it’s best that you turn off the quote feed and rest easy. This is because the possibility of you suffering a major loss with a stop loss order in place is slim.

In Conclusion

Several traders who depend on trading as their primary source of income trade for no more than a few hours a day because they know just when the market is conducive for them to implement their strategies.  For instance, trading from 9:30 am to 11:00 am and then getting back to it from 3:00 pm to 4:00 pm might produce rather similar monetary gains when compared to trading through the day. Consequently, once you know your way around, you might make the most of the market by being no more than a part time trader.

Jon Dela Cruz

Author Bio

Jon works as a researcher with iCompareFX, an online platform that lets its users compare the world’s leading overseas money transfer companies. When he can’t find the information needed easily, he takes the route of a mystery shopper. Outside of work, Jon loves exploring music from various genres.

 

How To Pick The Right Forex Technical Analysis Timeframe.

How do you actually choose the right Forex Technical Analysis Timeframe?

Or, better yet, is there’re such a thing as “the right forex technical analysis timeframe?”

Well, this is another very in demand topic, and Francis Hunt spills the beans on the subject:

“Yes, timeframes are good question and something that it’s in terms of  my strategy. I’ve come and found my own truths, so I’ll share that… As I trade trend, with the Trend, I don’t look to pick reversals, because often reversals have lowest success rate and don’t turn out to be reversals. In other words, going back to that Isaac Newton and Einstien type philosophies – things continue to move generally, and they are moving for a reason.

So, on the basis of a trend continues pattern, or continuation, I have a trend-time view and then have a pattern-view. Where I’m looking at the setup – the squeezing of the Volatility; it’s stopped going up for a while, it’s resting. And then I have a trigger-timeframe which will be a time frame where you actually looking for the specifics of the Market to get your unique high 3 point, and when the breakout is going to happen. So, that is very focused on timing. Which direction the river is flowing? Where is South, you know, – the downstream? Get that right, that’s your Macro timeframe.

Typically, the best times the patterns are taking – on the larger timeframes. They are more consistent, broadly you are less likely to be flicked out, particularly if you are in Forex. Variety of other underlying markets can be a little bit choppy at times. I would say, you want a trend-timeframe, which is may be a Daily chart, can even be Weekly, or Monthly to H4-(the four hours). Your pattern-timeframe, is where you’re looking specifically at the setup and identifying the aspects of it…and I’m talking about the symmetrical triangle; your three highs and three lows, the pinch, that would be one quarter of their half.

A man with magnifying glass looking for forex technical analysis timeframe.So, if you are on Daily, your trend-timeframe, I would be on my pattern-view, the four-hour. And then when I’m looking at that third high and third low and the move that takes it through the high 3, that reasserts the bull-trend. That would be my trigger and timing timeframe. I want to really pick that third high and get that stop neatly nailed.

 

And the point that I entered with the pending order, note also, that is a pending order. In other words, market must take you in. This actually eliminates a lot of bad calls, because if it breaks down and it is a reversal instead – you don’t get taken in. Most people are getting in market orders, they say: “Oh, I must be in, the markets are moving.” And they jump, they are momentum chasers…by a default. Because, you want to be excited, it’s going up, you want to be a part of it – you chase the train.

A pending order is more about price level falling, than a specific moment in time that you want to be in the market. So, that trigger timeframe would be a quarter of four-hour (H4). You would have Daily – trend. You would have four-hour – pattern, and you would have one-hour (H1) for capturing that final, third high and third low. Which represents the breakout and the stop-loss placement. Bang!…those are my three timeframes. So, I’m actually looking at three. The first one, once you’ve got that right – it’s nailed, you can set aside. Then you concentrate on the other two.

Hmm…yeah, that is intensive…so, how many markets you follow?

It’s driven by finding the specific setup, so, I tend to be interested, once there is a chart that has had a strong Trend, that is in continuation pattern and has already given me my first pull back and the second bounce. And the second pullback that is not as low. It is already given me two clear impulses and it’s tightening. Then I start to say: “Ok, this is looking interesting.” That becomes just a watch list candidate and depending on how it’s progressing, as long as, it continues to comply, we become more and more interested in it. And as we start getting to the third high and the third low we’re focusing on the trigger time-frame. “So, how many markets?” – I don’t have a number, I don’t say – 10. Anything that I can find, and I have number of scanning tools where I can find a liquid market that is giving me circumstances, is potentially interesting.

Ok, lets talk about predicting price direction and its importance in Your trading style.

An image of a logo that explains forex technical analysis timeframe.So, direction…As I’ve probably eluded to; we are continuation orientated, broadly speaking. We’re buying the Trend that is already apparent. If it shows us that is ready to reassert again to the upside, so it has to be self-confirmatory as well, by virtue of its continuation. I keep my direction very, very simple. We believe, the original direction is correct until such times that is proven to be incorrect.

I apply, what I call, a summative theory; we continue to keep on believing – you’re moving up, as long as, you keep showing that that’s what you’ve been doing.

In other words, once again, referring it almost to that object in space that is moving…it will continue to move, until such times as some new element enters into the market, in space, that pushes it in another direction. And as you’ve noticed, with our solar system, and all of this things, we are continuing to move for a long, long time.

And only when we get hammered by one huge star, or asteroid are we going to seize to moving that way. It’s been highly predictable for many, many years and if we get Astronomical, you can say, it’ll probably be the case of our entire lifetime and many people’s lifetime before and after us.

Also read: How To Use Solid Forex Trading Tips That Improve Your Trading

For me, that makes logical sense for a Trend. Market is re-valuing, say in Equity, or Commodity, or even in Fx pair. What happens is that, we are not a fruit-fly. You don’t go from one point, an event, and suddenly all the information becomes Universally available to all the people, and that fruit-fly jumps from here to there.

The way the market responds, is you have to cope with peoples expectations and re-rating of value and it takes a while, over time, for people to see someone in new light, or re-value the company in a new light. This is, what is the birth sign of Equities. After doing it quite a lot, fairly briskly for awhile, it will pause in that process. In the same way as you climb the steps; you go up – you flatline, you go up – you flatline. I’m exploiting that.

This is like, common sense…

– To me, it’s feels like a logician’s way.

When You talk about it like that, it’s not better than very basics. Isn’t it?

Yes, but you’ll be amazed how many people, when teaching, that are always trying to sell something that is going up, and always trying to by something that is making new lows. I’ve never understood – why? It’s almost like saying: “Can I swim upstream to the top of the mountain?” And I’d say: “Well, go down, to the beach, see who gets there first?”

What’s most important part of your strategy during a regular day, you know?

What’s Your number one thing?

I think, Analysis – not the actual trading. The amount of work and drawing you do on your charts, pre-actually taking in, is what gives you the confidence. I’ve always found, I’m most confident on a trade, when I really opened the chart up. Historically, I’ve looked to see how it’s performed, how is it continued before, drawn the patterns, projected the targets  –

where they were made, thrown all my key levels of significance through the chart.

Seeing: it’s come back, visited, supported, moved back up. Really got inside the price behavior that I feel. I understand this animal, you know. You wouldn’t start committing surgery on a being that you’ve never studied before. Why would you start trading something that you have not, properly, got under the skin of?

What are some of the advantages of following a tested strategy, aside from, a better opportunity to win?

So…tested strategies, and I’m assuming you talk about something that is systemic, where you can actually run almost ‘black-box’(algorithm), and you generate notional trades. In that instance, I’d feel the biggest advantage of a tested strategy is actually, the process of defying the strategy in a first place. Because, too many people when I’m speaking, and this is once again, the value of having taught traders.

They say: “Here all my rules…” And then, when I watch how they implement them, they actually say: “Well, I did not do that one, because of that, and I didn’t do this one…” So, I said: “Where is that as part of your rules, though?” You actually, discretionally, bending the bernicial rules that you wrote down. Which, you not actually trading your system in terms of how you’ve  defined it, or you actually adding a new level of rules that you have not yet incorporated in your rules.

A sign that explains how forex technical analysis timeframe works.So, one, or two is going to happen; you really going to stop messing with what you’ve originally wrote down and trade what you’ve defined, or that what you think is important criteria – define that criteria and integrate into your system. What you actually find, is you start being forced to make decisions about what you really want. You can’t get in life what you want until you define it and could write it down.

The same way in Trading, you have to say: “I’m going to let some of those trading patterns go. I quite like them, but sometimes they really sting you. They go the wrong way and when they do that, it could be good, but it could be bad. Let’s just focus on the ones that give me the results that I always need.” And you’ve been forced to eliminate, and to define.

That process of defining the system is most valuable part for me. The testing, then, gives you the outcomes of that work and tells you if you basing your thinking on a failed fallacy, or not. If you can’t make over a long run reasonable return on testing, you will never make it in reality on that. The testing is a clear point of where your idea is “put to the sword,” if not justifiable. And then, you are living in a false paradise, so you must come up with another system, but at least it gives you closure. You can let it go.” – Francis Hunt

 

What Forex  Technical Analysis Timeframe  do you use in your trading?

Please let us know by commenting below…

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