You don’t have to be a full-time broker or a floor trader to be successful in the foreign exchange market. With the right trading platform, a few tools and an effective strategy, you can dip in and out of the market, execute trades, protect your positions and deliver long-term profits.
Select a broker
Firstly, you will need to choose a platform for your trading activities. When selecting a broker, you should consider factors such as transaction costs, deposit and withdrawal methods, trading platform features and customer service. Reading the OctaFX Review will help you to make an informed decision.
Know your markets
The different time zones of the four major forex centres – London, New York, Tokyo and Sydney mean the currency exchange market is open 24-hours a day, five days a week. If you are based in the UK, it may be best to match most of your trading hours with the London market, which opens at 8am GMT and closes at 4pm.
Hone your craft
Part-time does not mean you can take forex trading lightly. You should try to consume as many educational videos, webinars and guides as possible so that you understand the basics, such as reading charts. You should also adopt a certain style of trading that matches your working hours.
Part-time traders miss out on small fluctuations and micro moves so it may be best to concentrate on long-term trends, especially if you can only trade via a mobile app or software two or three times a day. Another potential strategy is to take fewer positions with currency pairs and hold on to them for longer.
Automate stop-loss orders
Making use of stop-loss orders on your trading platform is a crucial aspect of part-time trading as you will not always be active and ready to exit markets at the right time. A stop-loss order will minimise your losses by selling a security when it falls below a stop price.
Set up trading orders
You also want to set limit orders and entry orders so that you also enter the market at the right time to maximise profits. Your trading platform should allow you to automate moves as you see fit without having to pay additional fees.
Act on price action
Price action is the movement of a security’s price over time. Using charts, you will be able to identify “breakouts”, which are defined as breaks from an established resistance level or technical pattern. This usually happens after a period of consolidation and presents an opportunity for a trader to buy or sell a currency pair.
Act on strong trends
Using the DNC indicator chart to identify strong trends is another good starting strategy for part-time traders as you won’t have to over-analyse your moves. When you have identified a viable currency pair, for example, GBP/USD, you can use the upper DNC line to determine a strategic price point. The lower DNC line can act as the stop-loss point.
Be disciplined, be realistic
Finally, it can take time to make a success out of your part-time forex trades. You need to have realistic expectations and a disciplined approach. You may miss out on big moves now and then but that’s okay. Keep it simple to start with, build your skillset and maximise your time trading to give yourself the best chance of achieving your goals.