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Which Strategies Best Suit a Part-Time Trader?

By Sera Akinci  |  30/05/2017 12:03
Many traders neither have the time nor resources to take on full-time trading when starting out. They’ll often make their trades at work, lunch or become ‘night traders’. As you might expect, there are disadvantages of trading part-time, and one of which is the number of missed opportunities to buy or sell. Indeed, due to the volatility of the market and that part-time traders can only assign a small portion of their day to analysis and actual trading, many of the more profitable trades end up going unrealized. That’s not to say, however, that you can’t make it as a part-time trader and in this article we will look at some effective strategies for those traders with fewer hours in their day.

Before getting started, it’s worth explaining why night-trading can limit your profits; night-trading restricts the number of currencies you can trade based on volumes during the 24-hour cycle. If you practice this form of trading, it’s worth considering strategies that focus on the most active currency pairs for that given timeframe, for example, the Australian Dollar (AUD)/ Canadian Dollar (CAD) or Turkish Lira (TRY)/Australian Dollar (AUD) depending on your location. It will also be beneficial to examine the relationship between the two currencies when choosing a pair. So, whenever you do get a free moment during the day, try and use it to study the market and think about the best strategies to implement in order to maximize both your time efficiency and profitability. Here are some tips to help you better strategize your part-time trading:

1. Understand your Markets

If you work full-time but want to trade in your spare time, make sure you know the opening and closing hours as well as holiday periods. Here you can check and track the economic calendar and trading hours. This way, you can prepare for upcoming trades and which currency pairs will be available and most favorable. Regardless of the pairs you decide on, before you start trading you need to gain an understanding of the market’s characteristics by studying the appropriate charts for these pairs, alongside the fundamentals of each currency. To improve your technical skills, GKFX offers a wide range of webinars to help improve both your technical and fundamental analysis skills.
 
2. Stop-Loss Orders

You can set a stop-loss order just outside the daily price range of the currency pair you are trading. This way, if the market suddenly breaks the trend that encouraged you to initiate the trade in the first place and takes an unfavorable turn, your account is protected because your position is closed automatically by the stop-loss order.
 
The purpose stop-loss orders are to end your trade when the market goes far enough in the opposite direction that a return to profitability borders improbability. Faced with a loss, it can be difficult to accept that you made the wrong decision. Setting the stop when you enter the trade can help you therefore to draw the much-needed line in the sand designed to protect you from an even greater potential loss.

3. Price Action

‘Price action’ is the fluctuation of the price of an asset. You can evaluate a stock’s price action by monitoring patterns and indicators to help find order in what can otherwise seem like a random movement of price. Furthermore, technical analysis is the study of previous price movements, which can involve analyzing a 1-hour intraday chart to a monthly or yearly chart.

All the small movements that we see during chart analysis are the movement of prices that every trader should work towards understanding so as to get a better sense of the best strategy for your trading style and plan. On your MT4 platform, you can use Ctrl+L to see how many times the price has ticked, which indicates how much the price has fluctuated.
 
4. Alternative Strategies

There are countless strategies you can use to inform your trading, but here are some of the more popular and effective strategies:

4.1. The Bladerunner Trade

The Bladerunner is a great EMA-Moving Average Crossover strategy to find the middle of the price trend. This is applicable across all timeframes and currency pairs.

4.2. Bolly Band Bounce Trade

This type of trade is ideal in a ranging market. Meaning that the price of the instrument you have chosen is making the same highs and lows a number of times; in other words when the price hits the same support and resistance levels 3 times over.

4.3. London Hammer Trade

When the markets open in London, it creates great volatility in prices and some potential opportunities for quick profit. This strategy seeks to take advantage of these opportunities.

Aside from these strategies, you should also consider looking at long-term trends, setting up alerts to your mobile phone to keep you updated with breaking news and the global markets whilst you are not actively trading. 

5. Nitty Gritty

Successful part-time traders are generally very disciplined, having developed the necessary analytical and technical skills to become profitable in their trades. Furthermore, they have chosen the right products/currency pairs at the right time of the day. If you are a beginner, you can also use an automated trading program until you feel more comfortable and familiar with the best trading procedures.

Moreover, you can also use other tools such as Trading Central, which provide real-time investment research based on technical analysis from a range of investment banks and asset managers. Another tool, Autochartist, will provide you a wide range of user-friendly technical analysis. This tool also provides automatic intra-day alerts in real time. The reports are shown in a simple format indicating key price levels along with the formation of influential chart patterns. You can easily add Autochartist and Trading Central into your charts in your MT4 accounts.

As with any form of investing or speculating, there is no assurance that you will either lose or make a profit. All these tips are merely suggestions for part-time traders.

By Sera Berfu AKINCI

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The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.

If such information is acted upon by you then this should be solely at your discretion and GKFX will not be held accountable in any way.

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