If you’ve been slugging it out in the forex market for quite some time, I’m sure you’ve wondered what it takes for one to start racking up more winning trades than losing trades. But I think the bigger, and even more intriguing question for a lot of our readers out there is, “what does it take to be successful as a currency trader part-time?”
If you’ve been a fan of the best forex page on Facebook for a while, you might remember that we ran a poll asking who was a part-time trader and who was a full-time trader. And guess what? The part-time traders represented! So we decided to run another forex poll asking if those part-time traders were still up and about. And they were!
Knowing that a lot of you part-timers are still out there, we full-time traders should give a helping hand when we can, right? We know what it’s like to be in your shoes, so here’s a few tips to get you through the challenges of part-time trading!
1. Stick to a trading method or style that suits your schedule.
The biggest issue for part-timers is, well, time. If you only have an hour a day to commit to trading, and it’s during a low volatility trading session, strategies like day trading momentum or trending moves probably don’t make sense, right? In that situation, you may want to look into creating short-term ranging market strats or longer-term swing/position plays. So, before settling on a forex trading style, figure out your schedule and then tailor your methods to it.
2. Maximize your trading time.
Again, time is of the essence for part-time forex traders, especially if you’re still in the early stages of developing your skills. So, you have to make the most of your trading time available. Think about it this way: If your goal is to enter the world’s strongest man contest and be able to lift 1000 lbs. off the ground, and you have only 10 minutes a day to work towards that, are you going to spend that 10 minutes a day lifting 5 lbs. dumbbells a couple of times? You could, but I guarantee you’re not doing the work necessary to tear down your muscles so they can rebuild stronger.
In trading, our “reps” to build our trading muscles and skills come not only from planning and executing trades, but also from other core trading tasks like doing market/chart reviews, backtesting systems, trade journaling, etc. On days when the market is slow, don’t just sit there waiting for a trade, take that down time as an opportunity for intense skill building by engaging in these core trading tasks and exercises.
The only way to develop real skills is with deliberate practice, so the more you can get in with your limited time, the faster you’ll be able to reach your trading goals.
3. Do your homework.
This is a no-brainer, common sense tip, but it’s even more crucial for part-timers to follow. Since time in front of your forex trading station is limited, you most likely won’t be available during market shifting events or surprises. So, it’s even more important for part-timers that you know what’s driving the markets, which potentially market shifting events are coming up on the forex calendar, and to plan out different scenarios or market reactions because you won’t be flexible enough to move with the markets like full-time traders are.
Essentially, this is a case where the part-timer has to be even better prepared than his or her full-time counterpart.
4. Make your trading journal your best friend.
The less time we spend doing something means that more time will be spent forgetting how to do it well. This holds true for any skill, whether it is playing a sport, public speaking, professional dance, etc.
Diligently keeping up a detailed trading journal and referring to it often can offset the extra time away from the markets by keeping a record of what does or does not work for you.
For example, instead of relying on your memory to recall market nuances (e.g., Cable tends to strongly break previous day highs or lows during quarterly UK GDP) or that your EA doesn’t work well during US initial claims days), you’ll have your forex trading journal to reference those events and help keep you from making a bad trading decision.
Also, entering and reviewing your journal entries acts as more “trading reps,” in that it turns that one trade into two or three experiences, bringing you that much closer to trading mastery.
5. Remember that there’s always an opportunity to grab some pips around the corner!
Part-time traders are almost guaranteed to miss good forex trading opportunities. For a lot of us, missing big opportunities can be as damaging to our psyche as taking a trading loss, potentially causing us to follow up with bad trading decisions. Don’t let it happen to you!
Unless the world goes to one currency or there is a major catashtrophe that causes financial markets to completely fail (in which case we’ll have bigger things to worry about), there will always be a chance to catch good trading opportunities. When you internalize that fact, you will have taken another step closer to becoming a mature trader.
Generally speaking, these tips really apply to every trader out there, both part-time and full-time, but as mentioned earlier, part-timers gotta keep their game extra tight. The lack of time and flexibility requires them to be even more prepared, disciplined, and mentally tough than full-timers.
Is it impossible for part-timers to be successful? No, but it will definitely be a challenge. And if trading and high performance is your passion, then we know it’s a challenge that you can eventually overcome.