By VIKRAM
Many people have a passion for Day Trading but don’t want to take up as a full time career or give up their day job, reason could be not confident about making a Living by Trading or they love their current Job that they don’t want to leave it.
In fact, many professional full time Day traders ,including me only trade like a part-timer, trading for one to three hours per day(means only Trading when opportunity arises)
In fact, even after becoming full time Trader, I actually spend around 2-3 hours per day only in front of the screen, and other time I am busy with other things like doing some research or writing blog posts or doing some personal work. (Before turning as a Full time Trader, I worked in a corporate world for close to 2 decades in different profiles like Sales/Marketing/Training etc)
If you are in to full time job and want to try Day Trade as a part-time, it would be little difficult unless you have flexible hours at your work, or say you work in a US or UK shift where your working hours are totally different than Stock Market trading hours….or you are living in a different country where there is geographical time difference.
I know few people who are working in UK shift and their working hour starts around 1 pm (Indian Time) and they trade for 2-3 hours in stock market before their work starts.
Here are the few strategies can help you maximize your efforts in the least amount of time and prepare you for some of the pitfalls you might face in Day Trading as a part timer.
Day Trading Stocks and Indices as a Part-Timer
While some Day traders do trade all day, the biggest profit making opportunity lies in opening and closing of the market when volatility is high, typically concentrated around the official open and close of stock trading. For Eg, in our Indian Market, These occur at 9:15 AM to 10 AM and 2-3.30 PM (IST) respectively.
When starting to Day trade part-time, focus your attention on the opening of the Day. Be at your computer by 9:15 AM, getting yourself prepared for your first trades, first 30- 45 minutes are usually the most volatile time of the day, same time it offers the most profit potential.
If you can only trade later in the day or at the close of trading hours, consider day trading from 2 PM to 3.30 PM IST. Since Day traders have to close all positions before, or at the closing bell, you will see highest volatility and highest activity in last one hour of the trading day.
Another option is placing an alert at important location and when you get alerts place your order based on your analysis, now a days most of the trading terminals offers ALERT options in their software, where it makes a sound or send you email or SMS.
Some of the important locations on your chart for Day Trading are,
PDH, PDL, Current day High,Current day Low and CPR(central pivot range).
(contd…)
Another good option is turning in to Swing Trading, where you don’t need to constantly keep any eye on market movement regularly, build a Swing Trading strategy, decide on which level you want to buy or sell an instrument and put an alert, put your order, place your SL an leave it on its own.
If you still have office timing that you can’t trade during stock market hours, you can trade the foreign-exchange (forex) market,which trades 24 hours a day during the week, making it a flexible alternative for day traders who only have one to three hours at odd times of the day or night to day trade.
Trading the forex market takes place using currency pairs, with the most popular currency pair being the euro and U.S. dollar (EUR/USD). Other popular pairs include the GBP/USD, AUD/USD and USD/JPY, USD/INR Each pair tends to be most active during certain periods of the day.
Though Forex Trading is not as popular compared to Stock Market in India, one has to know in and out of the Forex market before starting as a Forex trader.
Even Trading in commodity market can be considered which is open till 11.30 pm.
The Difference between Casual Trader and a Part-Time Trader.
Be a part Time Trader but not a Casual Trader.
One of the pitfalls of part-time Day Trading has to do with your mindset. For example, many potential Day Traders fail to make a distinction between Part-time Trading and Casual Trading.
Many professionals recommend part-time (means trading only some part of the day), and like them, you can trade every day during the best times of the day (like opening or closing of the Day)
On the other hand, being a casual Day Trader means, you trade whenever you have an urge, or when time permits. This isn’t recommended, because it typically means you haven’t done any planning before taking the trade, your trading activity has no structure, and since markets act differently at different times of the day, trading at random or casual intervals won’t make for a good strategic play and in fact you may lose your money.
Part-time traders don’t trade all the day, but they do trade regularly… on the other hand Casual traders may trade for several days and then take several days off. These periods of activity followed by inactivity leave you less sharp, slow your reaction times and make you more prone to making mistake and losses.
You can be a Part-time Day Trader, but don’t be a Casual Day Trader.
Trade on a desktop or laptop during an allotted time each day as your time permits, not on your smartphone in your cafeteria or at a smoking zone. If you’re casual about your trading, you’ll experience losses, while those who are Pros and taking trading seriously will take your money.
When doing part-time trading, do it right, treat it like a part-time job or business, or don’t do it at all.
If you are serious about Day Trading, then planning is a must and have basic knowledge about Trading and Technical Analysis.
Part-Time Pay
As you are doing a part time Trading, you need to expect only small pays and not aiming big pays, If you want to earn big amount then you have to risk big, which is not recommended when you are a part timer.
Most full-time Traders who rely on trading as their only income, end up trading part-time, because they realize that only a few specific hours of the day produces the best results for their strategies.
My most of profitable trades are first 1(one) hour of the Day.
For example, a part-time trader may find that they can make Rs 5000 per day on an average, trading during only the best two to three hours of the day. If they forced themselves to trade all day to make more money, they would sit and watch their screen during times when good trading opportunities typically don’t arise, and same time they mess up with their full time job as well.
Trade only during the best times of the day for your strategy, and you won’t miss out on much profit compared to trading all the day.
Conclusion
You can easily Day-Trade on a part-time basis with stocks, commodity or forex (provided your office timings allows that). Learn the times of day that offer the best trading opportunities for your trading strategy, like opening or closing of the Day.
Part-time trading can work well if you trade regularly, and over the period of time you can master it, and it might really help you in future when you have decided to become a Full time Trader or say, god forbid, you lost your job and want to have a consistent income even when you have no Job.
Learning how to Day Trade successfully may seem like difficult initially, but once you’ve mastered your strategy and technique, you yourself amazed by accuracy in your Trading.
