Introduction
Part time day trading refers to the buying or selling currencies or financial stocks within the same day, often around a job and other regular activities.
This concept of trading doesn’t mean you can trade any time of the month for a few hours.
To understand the concept of part time day trading one must treat it like a part time job. Imagine you are a student or a worker and decide to do a part-time job at McDonald’s for 3 hours. It doesn’t mean you can go there and expect to get wages any time or day of the month. You have to work for a certain period of time regularly to earn money.
Difference between full time and part time day trading
Full-time day trading is a professional type of trading in which a trader performs multiple tradings throughout the day. A full-time trader usually stays active during the entire trading session and works five days a week.
On the other hand, a part-time trader usually trades three times a week. Such traders don’t stay active throughout the session. The average part time trader spends 3-4 hours in a trading session.
Casual Vs Part-time trading
Casual trading is a type of irregular trading. In this method, a person only trades occasionally. He may trade for many days and, later on, forgets about trading for several days. A casual trader usually gains nothing in the trading world because he need to get the proper knowledge about trading and its work ethics.
It alsoinvolves regular trading with proper trading knowledge and work ethics, which can help you to earn significantly if you keep consistent and up to date.
How to trade part-time?
Once you understand the concept of part time day trading, it is time to know how to trade part timely. The principles and methodology of trading remain the same for part time trading. The important key takeaways for part time day trading are the following.
1. Set your trading goals
The first thing to achieve your goals is actually to set the goals. Once you know what you want to achieve as a part-time trader, you can work to achieve it. These goals are further divided into short-term and long term goals.
2. Find the trading hours for maximum profits
The most crucial step to becoming a part time trader is the understanding of the trading hours. Once you understand the peak hours and volatility of the trading session, you can find the best time to trade.
3. Trade at least thrice a week
The difference between a casual and part-time trader is the execution of trades regularly. If you stay in the trading world regularly. You will stay updated and keep experiencing new things. On the other hand, if a person doesn’t regularly trades, his skills and understanding of the market keep reducing.
4. Learn trading like a professional
The market treats you the same whether you are a part time or a full-time trader. If you want to make something from the trading world. You need to understand and learn trading like a professional.
If you are unable to use and understand the market, your chances of success as a part-time trader are closer to failure as compared to success. So, to make money from your part-time trade, you need to learn trading from alpha to omega.
When to trade?
One of the most critical questions, if you want to become a part-time trader, is “when to trade.” To find the appropriate time, you must understand the different trading sessions.
If you aim to trade in AUDJPY, you can’t trade in a New York trading session.
Moreover, the choice of timing for trading also depends on the market volatility. It is not a set rule, but usually, the hours, once the trading session opens, are best for part-time trading. A trader can find the best times for trading himself once he begins to understand the trading sessions and their working.
Why do you need part-time trading?
Goals for trading can vary from person to person. In general, people tend to choose this type of trading because of the following reasons.
- To make a side income.
- To invest money.
- Shortage of time because of other activities.
If you need to become a part-time trader, your background subject or field doesn’t matter. All you need to do is to learn to trade and start executing regularly.
How often should you trade?
The frequency of trading depends on the following factors.
- Trading goals
- Availability of time.
- The cash you are willing to pay for trading.
In general, you are advised to trade for at least 3-5 times a week if you want to become a successful part time day trader. A trader who trades less than three times a week is a casual trader. Casual trading usually results in failure. So, you need to focus more on part-time trading with a bigger frequency and regularity.
Best currency pairs for part-time trading
Different trading sessions offer different opportunities for a variety of currency pairs. Moreover, different trading sessions offer different choices of currency pairs for trades. The most commonly used currency pairs are,
- EUR/USD
- USD/JPY
- GBP/USD
The choice of currency pairs also depends on the trading goals of a trader.
Pros
Here are the advantages:
- It helps in generating a side income.
- It enhances the exposure of a trader.
- It helps you to learn and explore the trading market.
- You don’t need to spend hours trading from morning to evening.
- It provides you with freedom.
Cons
The disadvantages of part time trading are,
- A part time trader finds it difficult to compete with professional traders.
- As you trade partially, you can miss many good opportunities in a trading session.
- It takes a long time to understand the trading world practically.
Conclusion
Part time day trading can be a good choice if you are a goal-oriented and consistent person. People from every field of walk can choose this trading method. It is a good approach if you are willing to make a side income. The casual and ill-learned approach will minimize your success as a part time trader.