How to Trade Part-Time

Mon Feb 8, 2021, 11:14 am | by Alexis Jurcak | No comments

You might be a full-time student, a parent who works full-time to support a family, or just someone who has a busy schedule. Maybe you’ve been wondering how you can get some extra income and have seen that day trading may be right up your alley. However, you may be wondering if you can even be a trader with such a hectic schedule. Lucky for you, you can!

In this blog post, we’ll explain how easy it is for you to start your trading journey while also attending to daily life. Learn about the benefits of part-time trading and how you can successfully implement this into your life. 

Benefits of Trading Part-Time

It may be common to think that in order to make a profit as a trader you need to commit yourself 100% of the time. However, that’s not necessarily true. Trading part-time can be extremely beneficial, depending on your trading goals. Some people simply don’t have time to be constantly trading. Here are some benefits to being a part-time trader. 

  • Extra Income: Whether you’re a student or someone who has a full-time job, having extra income is never a bad idea. Trading part-time can offer you that opportunity to make money while attending to your other necessary tasks. 
  • Ability to Diversify Career: Trading can also allow you to become a diversified professional. Trading involves a lot of skills such as patience and pattern recognition. These skills and many more can be brought onto your current job position or future positions. 
  • Less Stress: Overall, trading part-time can alleviate some of the stress that many full-time traders experience. Having the ability to use trading as an extra source of income allows you to be more patient and less stressed when making trade decisions. Knowing that your rent, gas money, groceries, or other bills, don’t depend on whether you make big gains or not on a specific trade can actually help you make better decisions overall. 

Trading Strategies That Best Support Part-Time Traders

Not all trading styles may be beneficial for part-time traders. Some trading styles involve constant chart monitoring and or being at your computer for most of the day. Here are a few trading strategies that can easily be implemented by part-time traders. 

  • Open Drive Strategy: The main reason why this is beneficial for part-time traders is that you’re buying and selling at the open, which is at 9:30 AM ET. Your analysis of what trades you’re going to make will happen the night before. The most important aspect of this trading strategy is to have a stop and a limit. Depending on the time frame you have available for trading you can shorten or lengthen your stop limits. Make sure that if your stops are filled it cancels the limit and if the limits filled it cancels the stop. 
  • Overnight Drifter: This strategy may work best with currencies or future contracts. If you’re busy a majority of the day this trading strategy may work best for you. Holding an overnight position has the goal of increasing profits by holding it overnight or minimize the loss of a losing daytime trade. There is caution when implementing this type of strategy due to the risk of after-hour trading. You can mitigate this risk by attaching stop-loss or limit orders. Additionally, many companies release financial reports after-market hours, this could either be beneficial for your positions or negatively impact them. 
  • Bracket the Market: When using this strategy you’re focused on intraday movement, or the ATR – actual true range – of the day. You first want to determine what the ATR is for the day and then place a bid at a fraction of that, such as half the ATR away from the opening of the prior day price. Additionally, you’ll have a sell order that’s above the market. This is nice because essentially you’re basing decisions on a range, or a likely scenario of where the market will extend. 
  • Swing Trading: With this approach, you’re holding a stock for around 5 to 20 days. The 3 main things to think about when swing trading are: 
    • 1. Picking the Right Stocks
    • 2. When to Enter
    • 3. When to Exit

Swing trading can be extremely beneficial whether you’re a full-time trader or a part-time trader. Check out our blog post on our swing trading guide.

Implement a Trading Strategy Workflow

One of the best ways to be a successful part-time trader is to stick to a trading process that is simple yet efficient. Your strategy should reflect the time you have available for trading. Try to be realistic about how much time and effort you’re willing to put into trading. Dailyfx.com outlines a few ways in which you can start to strategize a trading workflow. 

  1. Identify a Simple Strategy: Keep in mind how complicated you want to get with your trading. Ask yourself how much time you’re willing to commit. Additionally, make sure you understand your trading strategy. Don’t pick a strategy that involves a lot of chart and pattern analysis. As a part-time trader, you may not have time to master the advanced skills needed for specific strategies. 
  2. Match Strategy to Relevant Environment: Again, it’s important to remember that you have other obligations that need to be met, and that may be more important than trading. If you know you only have an hour or so before you have to run to class or clock into work, make sure your strategy is reflective of those time constraints. Maybe you’re busy working and or studying all day, so trading after-hours seems more in line with your lifestyle. 
  3. Use Entry Orders: As mentioned earlier, trading currencies may be more beneficial for those who are using trading as a part-time gig. Placing an entry order allows you to execute an order at a designated price level. Unless your price level is reached the order won’t execute. 

Lastly, it’s important to think about having specific entry and exit plans as well as a strong will for maintaining risk management. Disciplining yourself will ultimately yield more positive results as a part-time trader. Sticking to your trading plan will alleviate stress executing decisions. Once you have your trading strategy formulated, you won’t have to stress about missing something going on in the market while conducting your daily tasks/routine. 

Tips to Be a Successful Part-Time Trader 

  • Trade on the Weekends: You don’t necessarily have to commit your trading strategy to fit into your busy weekday schedule. Sometimes, it may be more beneficial for you to trade on the weekends. This again is more aimed towards currency traders where you can trade different stock indexes in other countries where their markets may be open on the weekends. Daytrading.com outlines that DFM Index, a Dubai stock exchange, is a popular index to trade on. 

Weekend trading offers you the flexibility many part-time traders need. Additionally, you’re given the whole day to focus solely on trading. This also offers the opportunity to play around with different strategies if your current one isn’t performing with your daily life as well as you had planned. 

  • Audit Your Time: Time is money, so wasted time is wasted money. Start to record little things that may take up your time without you even realizing. How often do you check your phone? Could you utilize that time to be trading? What are you doing on your lunch break? It may be beneficial to use certain break times to be trading. Again, formulate your strategy to what works best for you. Some people may need the extra time throughout the day to take a breather. 
  • Keep a Trading Journal: With a hectic schedule it may be hard to keep track of what has and is happening in the markets. Keep a journal or some type of electronic document that allows you to jot down crucial information about your trades. Take note of things that are working or things that aren’t working. Having this jotted down somewhere can help you remember better and allow you to fully reflect on decisions you made during a period you were crunched for time. 

Final Thoughts

Like with anything, make sure that what you’re doing is what’s best for you. Everyone has different responsibilities they need to attend to throughout the day, so one trading strategy that works for one trader may not necessarily work for you. Trading part-time is definitely possible if you stick to your trading plan, remain disciplined, and keep track of your time. 
With such a hectic schedule you may not have all the time in the world to test out different trading platforms.

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Disclaimer: Benzinga is a news organization and does not provide financial advice and does not issue stock recommendations or offers to buy stock or sell any security. Benzinga Pro is for informational purposes and should not be viewed as recommendations. Benzinga Pro will never tell you whether to buy or sell a stock. It will only inform your trading decisions. You can find our full disclaimer located here.