Only a small number of traders are able to devote all their time to the Forex market. Traders often trade in parallel with the main job, during lunch breaks or at night. The main problem of these traders is the loss of trading opportunities due to irregular trading in a volatile market.
For example, a position that is not closed in time can cause a complete loss of capital, and a missed trading opportunity or opening a position at insufficient prices can cause insufficient profit. Both of these options can have catastrophic consequences for a part-time trader. Nevertheless, there are a number of strategies that are suitable for periodic trade.
For example, traders trading at night can perform operations on currency pairs with maximum trading volume at night. Examples of such currency pairs are AUD/JPY or NZD/JPY. When choosing a pair, it is useful to determine the correlation between currencies so that during the day the future movement of the traded currency pair can be estimated on the basis of the linked currency.
Additional analysis of currencies correlated with the traded currency pair helps the trader to conduct profitable trading (rules for placing stop-losses and pending orders are given in the article “Rules for placing trade orders”).
The main problem for part-time traders is the acute shortage of time. Such traders are able to trade 1-2 hours a day or even a week. Below are the strategies that allow you to engage in periodic trading in the Forex market
Know your markets
If you live in Moscow and work from 9 to 17, you can trade before or after work. The best strategy, in this case, is to trade currency pairs, which are maximally active at the moment of your presence in the market. The schedule of the main currency markets will help you to choose the currency pairs
|New York – from 4:00 p.m. to 2:00 p.m. ICN|
|Tokyo – from 04:00 to 13:00 MSK|
|Sydney – from 01:00 to 09:00 MSK|
|London – from 11:00 to 20:00 ICC|
From 04:00 to 13:00, MSCs are the most active on the Japanese and European markets, so the most liquid currency pairs for this period are EUR/JPY, EUR/CHF or pairs containing the Hong Kong (HKD) or Singapore (SGD) dollar.
From 02:00 to 09:00, the most active pair is AUD/JPY. Whatever currency pair a trader chooses, it is necessary to assess the current situation and perform technical or fundamental analysis of each currency pair being traded before entering the market
Wait, wait, wait, wait, wait, wait-Losses
If you are very time limited and can afford to trade only a couple of hours a day, your computer can be your “personal assistant”. Since the Forex market is volatile, the lack of constant monitoring of the market can lead to the loss of trading opportunities. The way out of this situation is to use automatic trading and stop-losses to protect your open positions from possible losses
If you open a Forex trading terminal from time to time during the working day (for 10 minutes at a time), technical trading is the most appropriate type of trading for you. Technical trading – making trade decisions based on analysis of current price charts and technical indicators.
For example, a trader can analyze the location of the current candlestick relative to the previous one. If the highs or lows of the current candlestick exceed the highs or lows of the previous candlestick, we can conclude that there is an uptrend, and vice versa. Technical indicators can be used as additional confirmation. The key to success is the right choice of technical tools for the time period used by the trader (you can read about the correct use of short-term trading strategies and placement of stop-losses in the article “Stop-loss hunting by large players”).
Despite the lack of time for constant trading on Forex, a trader can successfully carry out trading operations, if he adheres to certain rules:
- Limit the number of transactions and open medium-term transactions. After general market analysis and selection of specific currency pairs as trading instruments, you can open a small number of medium-term positions. It is very important to understand all the factors that influence the movement of the selected currency pair and to conduct a thorough analysis of the current situation. It is also necessary to constantly use stop-losses to insure against losses in case of unfavorable market reversal.
- Identify long-term trends. Instead of analyzing hourly or 4-hour charts, it is necessary to determine the trend according to the daily or weekly schedule. It will allow you to look at Forex only once a day.
- Place pending trade orders. Setting up pending orders, Take Profits and Stop Losses will help you to take advantage of trading opportunities that you can potentially miss. Most trading platforms allow you to place such trade orders without paying any additional commissions.
- Use modern technology! Set up alerts to inform you about the market situation via SMS or e-mail.
of the Forex market has gained its popularity due to the round-the-clock mode of operation. It is this feature that has made Forex available to traders who do not have enough time to constantly monitor the market. However, the Forex market is very volatile and carries quite serious risks, especially in case of incorrect trading strategies.
For successful trading it is necessary to use currency pairs with maximum volume in your trading hours, modern technologies and technical analysis. It is also necessary to determine the risk level and the appropriate time frame for your transactions (from 1 hour to several weeks) before you trade in practice.