Not all traders are able to trade Forex full time. Traders who have who are living to make their trades work, no matter if it is lunch or nighttime notice that with such a fluid market, trading sporadically all through a little portion of the day leads to missed opportunities to buy or sell. These missed opportunities can lead to a disaster for a part-time trader. Here are some strategies for a part-time trader to make the best of their trading plans.
- Know your Forex markets
If you are living in the US, you can trade before or after work. The best practice is to pick the most active currency pairs. Knowing what times the major currency markets work will help in implementing this strategy.
- New York opens at 8:00 a.m. to 5:00 p.m. EST
- Tokyo opens at 7:00 p.m. to 4:00 a.m. EST
- Sydney opens at 5:00 p.m. to 2:00 a.m. EST
- London opens at 3:00 a.m. to 12:00 noon EST
- Stop-Loss orders in Forex trading
The best practice for a part-time trader is letting your computer be your trading partner. This practice to employ a trading program where you allow the information technology work for you is the most beneficial, as the Forex market is so fluid in nature and hard to monitor as well. Another common practice is to execute stop-loss order. In other words, if the market suddenly goes against your position, your moolah is protected by all means. Click here to know more.
- Price action in Forex
There also exists a strategy for the part-time trader who checks in and out of work. These brief but repetitive trading periods may cause them to implement a price action trading strategy. Price action trading refers to the analysis of the technical or charts of the currency pair to inform trades. Traders can analyze up bars: a bar that has a higher high or a higher low than the previous bar and check out the down bars: a bar with a lower high or a lower low than the previous bar.
Up bars showcases an uptrend while down bars signal a downtrend. And other price indicators may be inside or outside bars. The trick is to trade off a chart timeframe that best suits your schedule.
- Take fewer positions and hold for days
It is important that you understand the drivers of your currency pairs and have invested some time to really know your market. Hence, after analyzing and understanding the marketing and narrowing down to a particular chosen currency pairs, choosing a few positions and holding them for a longer period of time is a practical strategy for part-timers. An alternative to this is to put in stop-loss orders with all your trades to reduce any losses if the market goes against you all of a sudden.
- Have a look at long term trends
It is beneficial in looking at longer-term trends on a daily or weekly basis instead of looking at hourly or even four-hour charts. This lets you trade while looking at your computer only once a day.