Forex trading can be considered as your alternative source of income. Thousands of people are making millions of dollars just by trading the market as part-time traders. But don’t think the part-time traders have less knowledge about trading. The depth of knowledge of a professional and a part-time trader is the same. The key difference lies in the profit factors. The professionals are favoring the high-frequency trading method to secure more money and part-time traders are using a conservative or long term trading strategy to earn profit with very low risk.
So, how can we become a part-time trader? Is it possible to create a steady income source by trading the market as a part-time trader? To find the answer, read the article carefully.
Start educating yourself properly
Educating yourself should be your prime concern. Those who have strong analytical skills can easily trade as a part-time trader. Start with the technical factors. After getting a fair knowledge about the technical analysis, you should start focusing on the fundamental issues. Though fundamental factors might make the traders a little bit confused about the complicated news, it is really easy. You don’t have to enroll yourself in a professional financial course to learn about the news factors. Start with the low impact news. After that, analyze the impact of the medium and high impact news. Once you feel confident, it’s time for you to create your trading strategy.
Creating the trading strategy
Rookie traders should create a trading strategy based on their personality. Since you will be trading the market as a part-time trader, you must choose a low-frequency trading model. For the trade development process learn about the demo trading platform here. After getting a demo account, you should try different kinds of trading approaches. The trading strategy must require very little time to analyze market data. Since you will be dealing with the market as a part-time trader, you should also learn about the different types of orders. For instance, with the help of pending orders, you can easily save a huge amount of time since you won’t have to wait long in front of the screen to place the trade.
Securing your profit
Securing profit as a part-time trader is a very easy task. Just place the trade and never make any modifications. But the trades must be executed with 1:2+ risk to reward ratio or else it will be tough to make money at trading. Those who are trading with 1:1 risk to reward ratio are losing most of the trades since they don’t have a good recovery factor. To boost the profit factor as a part-time trader, you should be careful about the trade execution process. Taking too much risk to recover the loss will cost your trading capital. Trading with high risk to reward ratio can secure you a safe path to success.
The major economic events
Though you will be trading the market as a part-time trader, you should be careful about major economic events. If you intend to trade the market with high risk, you should be careful about the outcome. No one can predict the outcome of any trade. In the major news release, the market becomes extremely risky. Being a part-timer, you should not be trading such major events. So, always know about the schedule of the major news so that you don’t have to lose too much money in any trade. Follow the safe path and focus on the long term market movements. If you lose a few trades in a row, try to find the mistakes in your trading strategy. Never lose faith in your trading method.