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The following guest post is courtesy of Yael Warman, Content Manager at Leverate.
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The world of FX moves fast and is open for trading 5 days a week, 24 hours a day. As such, it would seem that trading is best left to the professionals or those people who are available to buy and sell currency pairs throughout the trading hours; and those with little time would be better off finding a different way to invest their money.
However, the very fact that the markets are open for such a large amount of the week actually enables part-time traders to be as successful as those trading full-time. This article will explain three ways in which a person can utilise their spare time, however little of it they may have, to become a successful trader.
1) Use an Automated Trading System
In a previous article, we discussed the advantages of an automated trading system. In theory, such a system allows you to become a full-time trader whilst not being present in person for any transactions that will be carried out on your behalf. However, as we noted, an automated system does require fine-tuning, especially at the beginning in order for the system to react to all the signals for which you require a reaction. The more expensive systems will have a number of commonly used indicators, and will allow you to program your own into the system.
Whilst a time commitment is required at the beginning to get organized and fine-tune the system, this is a method that notwithstanding the cost involved is ideally suited to someone who cannot offer a full-time commitment. Even if you decide not to invest in an automated system, make sure your trading strategy has you setting appropriate Stop-Loss and Take-Profit levels so that you can minimise your risk during a time when you are not present.
2) Research Your Chosen Currency Pairs
In many of our articles, we have stressed the absolute necessity of research before deciding the assets in which you wish to invest. In forex, there is a built-in advantage to this research, as you are able to choose currency pairs for which the market is open at a convenient time for you. The times that the major markets are open are listed on the internet, and are easily accessible. If you only have an hour or so at the start and end of your day, you would ensure that the currency pairs that you choose to research are open during these times.
3) Adapt Your Trading Style
Whilst you may have spent many hours fine-tuning your trading technique, you need to be adaptable if your trading will work whilst you are part-time. For some people, this may involve taking a longer view on your investments, thereby changing from a day or weekly investor to a monthly or longer trader. For others, they may find it more beneficial to ensure that all profits are banked whenever possible, so that they don’t run the risk of losing money when the markets turn against them.
It is well worth taking the time to consider what your exact trading style will be when you have limited time to spend in the markets. You are strongly advised to choose the currency pairs that fit best with your availability, and to ensure that your style works for your limited hours.