As with any difficult undertaking, success requires discipline and a personal commitment to the task at hand. Juggling a full time job while enduring the highs and lows of part-time trading can initially appear overwhelming, but it’s undoubtedly achievable. Here is some hard-won advice from those who’ve mastered the art, but please keep in mind that each person needs to find their own rhythm therefore recognizing your work habits is an essential first step.
If your time is restricted by a traditional 9-5 job, then day-trading is likely not a commitment you can make. While there are opportunities for day-trading in currencies, which have active markets at later hours, Forex traders are still limited by the time differences between markets. For this reason, swing trading is typically the preferred style as it allows part-time traders to conduct the bulk of their research and market analysis on the weekends. After outlining a plan for executing that week’s transactions, it is still important for swing-traders to update their plans based on the market’s early-morning or late-night results.
Without observing the market throughout the day, swing-traders have to be creative with their time management. For this reason, it may be beneficial for part-time traders to explore renegotiating their work schedule – if this is an option – as more flexible hours will enable them to manage their time according to the market’s ebb and flow.
Obviously, time management is key. This means that optimizing your spare time to gain a few minutes wherever possible, will benefit you in the long-run even if it hardly seems worthwhile at the time.
Going hand in hand with time management, organization is a necessary life practice that has benefitted part-time traders the world over. Organizing not only your time, but your effort as well, will prevent you from wasting your energy on useless pursuits.
New traders experience a steep learning curve that endangers their resolve early on, leading many to experiment with different trading methods in quick succession. While tempting, this is hardly a good use of your precious resources. Trading should be based on logic – not emotions. The impulse to give up on one method before accruing the data and experience necessary to learn from it is a disservice to yourself. Particularly as a part-time trader, you don’t have the luxury of wasting time without learning from it first.
Yes, with time you’ll find that some trading practices are not sustainable. But this is a learning experience that requires a recommended commitment of at least 12 months to ensure that the method is indeed faulty. At first that may seem like an ill-conceived strategy that will lose you a year of trading, however, the value of consistency and practice cannot be overstated. Over those 12 months you will accumulate enough data from your trades and observed trends which – with proper analysis – you can benefit from for years to come.
The same cannot be said of data amassed over shorter periods using inconsistent methods. If you’re not here to gamble (and you shouldn’t be), then be ready to learn from your mistakes while exercising the hard-won skills of patience and determination.
Trading requires Determination
If you aren’t clear on what your goals are and you’re not realistic about them, your self-doubt will get the better of you before you see real progress. Determining reasonable short-term goals like when to quit demo-trading and “losing less” will prevent you from developing habits that ultimately dissuade you from your passion.
Demo trading, while a useful introduction to trading, can be a debilitating safety net if overused. Your goal is not to be a part-time demo trader, right? Then leaving the virtual behind and becoming ready to experience real wins and losses is an essential step in the process.
Otherwise, the decisions you make while demo-trading will begin to reflect the realities of that system – one not rooted in the financial realities of the stock market. Eventually you will take riskier decisions that are reinforced by previous mistakes rather than a logical plan and these habits will carry over to the real-world of trading, once you leave the fake one behind. By this time the consequences will be real and your habits much harder to kick.
Over-trading is a common symptom of undisciplined trading because it represents a lack of planning. If you understand the metrics of a good trade, then it’s a matter of waiting for the right price to appear rather than chasing it. Similarly, determination to succeed requires determination to learn – especially from our mistakes. Honestly reviewing your performance using the metrics of your own planning rather than your perceived monetary gains will reveal more about the market and yourself as a trader. Recognizing the system you’ve created and following its rules will help you improve it, whereas giving into impulses that lead to a momentary win will ultimately disappoint you in the future.
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