When starting out in forex it’s easy to imagine a glamorous lifestyle earning millions of dollars for doing a few hours’ work.
Of course the reality is often very different for many traders. For one thing, forex trading is immensely difficult and requires years of experience, long hours and lots of practice, and for another, watching a trading screen all day every day can get a bit monotonous.
It’s for this reason that many traders choose to only trade in their spare time and there are plenty of advantages for doing so. Because of their high liquidity and the fact they can be traded around the clock, forex markets are supremely flexible and that means they can accommodate all types of traders.
Guest post by FXTM
Less pressure
For the beginner, trading forex in their spare time means that they are able to keep hold of their day job. This means that there is no pressure of having to make a livable income from the markets. The importance of this cannot be stressed enough. Having another source of income leads to much more relaxed trading and more informed decision making. There will come a time when you may want to derive a full income from the markets but by trading part time first, you will be hopefully be well prepared when that time comes.
Smoother trends
While intraday traders will look at very short term price charts such as 15 minute, 1 minute or even pip charts, part time traders can take a more relaxed approach and this means they can spend more time considering their trades. Compared to longer term trading, intraday markets are full of professionals, many of whom employ complicated computer systems. This means the competition is extremely tough.
Traders who play the markets in their spare time can quite easily use the daily and weekly charts in order to come up with trading moves. These charts offer all the rewards and teachings of shorter timeframes yet they typically exhibit less volatility and contain fewer whipsaws. This means they are perfect for beginner traders trying to cut their teeth in the markets.
Free time
Some traders have no problem with sitting in front of a quote screen all day but for others this process can become intensely repetitive and frustrating. What’s more, being glued to a trading screen increases the propensity to overtrade as the market is there at your fingertips and most traders like to keep busy and ‘earn their keep’. For this reason, watching the screen all day can actually be dangerous and self-fulfilling.
Trading part time, however, solves this problem. It sets you up to trade only at certain periods which means you can have plenty of time to think over your trades and plan your moves.
Further reading: Trading on a Vacation? It isn’t a Vacation
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