How having a 9-5 job can help with your trading and how to adapt to a work/trade balance…
The majority of retail traders are part time, actually there’s an argument to be had that all full time traders are in fact part time traders, they’re simply pretending to be full time whilst looking busy, as once you’re successful your chart watching time and overall engagement with the market becomes negligible, but that ‘posturing’ is a discussion for another time…
Ask any broker to reveal their metrics on part time versus full time and you’ll find that the vast majority of their clients are trading part time, many are looking for a small supplementary addition to their salary. Trading part time and learning this craft part time, will inevitably result in the time taken to become proficient and profitable to be extended, however, there are many benefits to trading part time once traders commit their strategy into their business plan.
We can list some of the simple reasons why trading part time can be beneficial, such as; keeping your itchy fingers from taking trades, less screen time, over-trading reduced, less stress etc., however, we want to delve a little deeper into the reasons why trading part time can work and how traders can organise their trading around any work schedule and whilst being fair to your employer. Moreover, we’ll discuss why, for many traders, staying that course you’ve set once successful is the right decision…
One aspect we can immediately curve fit to our trading/work life balance is our charts and time frames. There is little point in our part time trader finishing their day’s work, rushing home and beginning to do battle with the markets on their 3 minute chart in an attempt to take money out of the market. Their work time may not correspond with the times the markets are most liquid and active and if tired our part time trader is liable to make mistakes. Finally it won’t make for a happy household if our trader has a family; hitting the markets for a few hours, when the time can be spent more productively with family, is a recipe for disaster. Even more so if our trader’s session has gone badly. Therefore our trader could look for what we term EOD strategies (end of day) or longer term swing trading strategies that could be taken off 4hr, 8hr or the daily time frames.
The irony and coincidence is that our part time trader will then be taking decisions in exactly the same manner that many full time swing/trend traders do; analysing the technical analysis at key opening and closing times, whilst keeping their ears to the ground for the release of fundamental high impact news and decisions, that could affect their trading decisions. This irony and coincidence shouldn’t be overlooked as it’s a massive accidental ‘gift’ that the market delivers to us and is particularly relevant for part time traders as an unintended consequence.
Many full time traders look towards the market opening times for key decisions and market movements; a four hour and eight hour time frame/chart can fit market opening times extremely well. Starting with 8:00 am UK time, looking towards the USA, followed by Asian markets has led to the 4hr chart becoming increasingly popular amongst many swing/trend traders.
A good trading methodology should never require hours and hours of chart evaluation and screen time once our trader has proven it to be reliable and profitable. The time spent on ‘charting’ should be kept to a minimum. Extended screen time often encourages second guessing, doubt, and deviation from the proven method. Starting out part time and then remaining part time, mimicking the healthy trading habits of the full time community, is simple to replicate. And part time traders will be ensuring that they don’t harm their full time work prospects and are able to honestly fit in their trading with zero negative effect to their full time work responsibilities.
Our part time trader, having set out his business plan and decided on a strategy, can check the markets at key times. If UK based they could check at 8am, 12pm, 4pm, 8pm and midnight. If operating off a 4hr time frame/chart it’s an uncannily perfect fit and scenario. Notwithstanding that our part time trader can set alarms should the conditions to take a trade be met, for example, if he operates an indicator based strategy an alert as an SMS message can be set to a smartphone should all the conditions be aligned. Thereafter using market orders, stops, take profit orders and he’s ‘in the game’ in exactly the same manner a full time trader would be.
Lately we’ve covered the issue of trading less, in this article we’ve covered how part time traders can enjoy the same rewards and benefits as full time self employed traders. As always certain constants remain; set out the trading plan as you would a business plan, even commit it to paper and stick it up near a wall close to your monitor. And never, ever violate that trading plan. There will be days when the part time strategy fails, in a probability based business that’s inevitable, but if you stick to the plan, have reasonable medium and long term targets and keep the risk per trade down to a minimum, you’ll be giving yourself a terrific platform for success.
« News that the debt ceiling ‘can’ may be kicked down the road caused the DJIA to smash through R3… Will the best day of 2013 for the Dow, due to the possible debt deal, extend into Friday’s trading sessions? »
