Trading part-time may be a good way to increase your income. There are enough hours in the day for trading on this potentially rewarding market, even if you work a full-time job. In this article we have brought out some tips that could help you do that.
Key points of successful trading in the forex market
In order to be successful, you need to specialize on currency pairs that are being traded when you have spare time and use a strategy that doesn’t require day and night surveillance. An automated trading platform may be the best thing here, especially for new traders and those that don’t have much experience yet.
Three ways to refine your skills for part-time trading are:
- Finding the right pairs
Even though in forex trading is done 24 hours a day, five days a week, it is best to trade at rush hour in order to provide liquidity. Liquidity is a traders capability to sell a position, which is much easier to do when the market is most active. For example if you work from 9-5 you have a possibility to trade early mornings or in the night after work.
Trading the USA currency is recommended to traders that have mini accounts or still have little experience. Most of the trading is done in pairs listed below. A part-time trader should avoid these pairs because they have a high liquidity.
For part-time traders that have more experience and time to get familiar with circumstances that may affect currency pairs prices, the following pairs also offer a high liquidity.
Experts recommend traders with limited time to only traid the USD/EUR pair because it is traded the most and has lots of information about it online.
2. Set up an automatic trading system
For part-time traders a good option is letting an automated system do the trading, which there are lots of in the market. Some can monitor currency headings in real time, submit market orders, sence useful spreads and trade automatically.
The ‘set and forget’ program may be the best option for a part-time trader to begin with because it makes automatic decisions itself. Many automated systems also offer an easy ‘plug and play’ option. It is one of the main benefits of automated systems- emotionless and disclipined trading. More experienced traders may prefer a more manual trading way by picking an automated trading system that has more programming options.
3. Make disciplined decisions
Being disciplined and not hot-headed is important for a trader who wants to use automated systems to make decisions. A part-time trader should not try to predict bigger price differences and profits. On fast-paced markets it requires some discipline. Successful traders take the profit when they can because the route can change quickly due to unexpected events in the market. Beginners should start trading with small amounts of currencies. By opening a mini account that requires a smaller deposit unlike other accounts, they can control 10 000 currency units. Minimal deposits on a mini account start from 2000 dollars and can go up to 10 000 dollars.
The potential profit or loss can be significant thanks to leverage which may be up to 400:1. Leverage allows traders to buy currencies by using only part of the money. For example if you want to trade 100 000 dollars worth with 1% fund, you only need 1000 dollars. You should still always consider the risk that comes with too big of a leverage.
Discipline, composure and trading with pairs that suit you at a proper time are identifications of a successful part-time trader. Automated trading systems are the best way to trade for a beginner to start in forex trading, at least until the procedures become more familiar to them. There still never is a quarantee that you will earn a profit since currency markets are so changing. Smart, experienced and even beginner traders should follow the steps above in order to have the best possibilites for a profit.