Forex markets trade around the clock but not everyone can or does forex trade 24/7. However, trading intermittently throughout a small portion of the day is not wise as it creates a number of missed opportunities to buy or sell. This can spell disaster for the part-timer trader after a period of time.
Fortunately, there are several basic strategies for part-time traders to leverage their positions even when they are not actively trading on a continuous basis. Let’s have a look at some key strategies for trading part time effectively.
Know Your Forex Markets
Suppose you work nine to five in the U.S. and are available for forex trade before or after work. The best trading strategy is to pick the most active currency pairs (that is, those with the most price action) in those time blocks. An example would be trading the Australian dollar (AUD)/Japanese yen (JPY) pair or the New Zealand dollar (NZD)/JPY pair.
There is also a strategy for part-time traders who keep popping in and out of work. Their brief but frequent trading periods create an opportunity for implementing a robust price action trading strategy. Price action trading means analyzing the technicalities or charts of the currency pair to inform trades.
Traders can analyze up bars and down bars closely to decide on their particular strategy. Up bars signal an uptrend while down bars signal a downtrend, while other price action indicators may be inside or outside bars. The key to success with this strategy is trading off a chart time-frame that best meets an individual part-time trader’s schedule.
Part-time traders should make the most of technology and let their computer be a “trading partner”. Since the forex market is so fluid and difficult to monitor, traders can benefit by engaging a trading program where the information technology works for them. Whether they want to know from where they can get the best forex card or any other information they can simply set up automated alerts on mobile phone or email to remain updated about currency price movements even when not actively trading.
Take Fewer Positions and Hold for Days
For part time traders, it is critical to understand their market and what drives the movement of their currency pairs. After studying the market and narrowing down particular chosen currency pairs, it is a prudent strategy to select a few positions and hold them for a longer period of time. Along with this, it is worth looking at long-term trends instead of looking at hourly or even four-hour charts.
Another common strategy is to implement stop-loss orders. This means that if the market takes a sudden move against one’s position, the money is protected. This helps minimize any losses in case the market catches the part-time trader off-guard.
Conclusion: The forex market is desirable for part-time traders because it runs for 24 hours and is constantly in flux, providing ample opportunities to make profits at any point in the day. However, the forex market is also very volatile. So it is important for all traders, and especially part-time traders, to have a proper strategy in place to leverage their position in the market.