There are a lot of traders who look at part-time forex trading. When you do this you may wonder if you are going to be able to make money on the market. It is possible to make money with part-time forex trading if you know what you are doing. There are a number of things that you need to look at when you trade part-time. By looking at these things you will be able to ensure you can make money.
Know The Markets for Forex Trading
One of the points you have to consider when you trade forex part-time is the market sessions. There are many different market sessions that you can trade in and you have to know which ones suit your trading. This is important because certain currency pairs trade better at certain times.
There are 4 different market sessions that you have to know about. Once you know about the different sessions you have to consider when you are trading. If you are trading after your day job you have to see which market session this falls into. The session dictates which currency pairs you should consider looking at trading.
What Price Movements You Need
If you are trading part-time you will have limited time to check price action. This means that you have to know the type of prices action you are looking for. This will be dictated by the strategy you are going to use. Part-time traders can use short and long-term trading strategies if they want. Most part-time traders will look at the short-term strategies.
When you use a long-term strategy you need to know how long the trade will be hold for. This can help you determine what price action you need and whether the market is right for this. Most long-term strategies can be used for part-time trading without any modification.
When you look at short-term trading you have to consider how short-term your trades are. There are a number of strategies that use trades which only last a few minutes. However, there are others that have trades which last hours. You have to consider which fits into your trading schedule and how this affects your trading.
If you are looking at strategies that use very short-term trades then you do not need a specific price action. Scalping is the most common of these strategies and can be used in trend and range markets. However, if you are looking at intraday trend trading you will need a longer amount of time. Trend trading can also only be completed when the market is trending.
Having Stop Loss Orders
Once you have a trading strategy and a time to trade you need to consider how you protect yourself. All traders need to use stop loss orders to limit the losses that they make. This is very important and should be part of your risk management plan and your trading strategy. Most traders will place their top loss at 2% of their trading account. This means that they are willing to lose 2% of the account on a single trade. If this seems too high then you can use a lower percentage.
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