Not everyone has the luxury of being able to trade full-time. Does that prohibit you from being able to trade? Not at all. There are costs and benefits to trading part-time, just as there are costs and benefits to trading full-time.
We’ll get into the specifics here in this article, but I think the most important thing to keep in mind is that the strategy and mindset you would be using to trade full-time is going to be different from if you’re trading part-time.
For the purposes of this article, we’ll assume that you work a 9-5 job.
What Is Your Personality?
This is the biggest question to answer first, and be sure you answer it honestly. Do you like being very active in the market, like a Scalper or a Day Trader? Or are you much slower to enter the market, and prefer a longer timeframe?
What you answer to these questions will likely decide your course of action and, more importantly, what you should stay away from.
If you’re a person who likes to be very active in the markets, you’ll probably force too many trades if you’re trying to swing and position trade. Conversely, if your personality fits inline with more of a swing trading or position trading style, you’ll probably get chopped up in the fast movement of a shorter timeframe.
If You Like To Be Active
By the very nature of a 9-5, you’ll be missing the morning session of the market here in the United States. The morning sessions is very important for a variety of traders as the tone of the first few hours of the day typically sets the tone for the rest of the day.
What’s more, the morning session has the most amount of activity around it. That’s not to say that trading the morning is always the best time to trade. A lot of times the best opportunities come after the market has been open for a few hours.
One of the biggest advantages of Futures is that they trade 23 hours a day Monday through Friday (there’s about an hour each day where trading settles). If you’re working a 9-5, you likely won’t be able to actively trade Stocks at all, unless you’re swing trading them.
Trade A Foreign Market
For traders with full-time jobs, who like to be active, trading a foreign market could be the key. Outside of the normal U.S. market hours of 9:30am to 4:00pm EST, the Futures market is pretty slow. That’s not to say that they can’t be really active at times, but the odds are they won’t be most of the time.
For traders looking to trade after 5:00pm in the U.S. you could look into trading the Japanese markets, in particular the Mini-Nikkei 225 Futures. For more information on this, watch this video by Jigsaw’s Peter Davies for an in-depth explanation:
Keep in mind though that Peter is talking about the Mini-Nikkei 225 Futures listed on the Osaka Securities Exchange, not the ones that are listed on the CME. This will require you to make sure your broker allows access to the Osaka Securities Exchange, so that you can trade the version that Peter is talking about in the video, should you choose to go that route. AMP Futures is one of many brokers who allow their clients to trade on the OSE.
If You Like To Be Passive
For those of you in this camp, having a full-time j-o-b shouldn’t affect you at all. You’re the type that’s not going to sit in front of the computer screen while watching every tick of the market regardless of whether or not you have a full-time job. You like to do other things with your time, like have a life. That’s cool too.
You Can Swing Trade
When defining the difference between Scalping, Day Trading, Position Day Trading, Swing Trading, Position Trading, and Investing, it really comes down to one thing: timeframe. If you’re a Swing Trader, you’re likely not going to be looking at many charts below a Daily timeframe.
You’re also going to be looking for much bigger price “swings”, given the longer timeframe. You’re taking more risk in terms of time in the trade, so you should be rewarded with bigger gains. You’ll also be trading less than a Day Trader, but more than a Position Trader.
If you like to place maybe 3-5 trades every 1-3 weeks, you’re a Swing Trader. You benefit from being able to use your nights to plan your trades, and glance at your positions. Then in the morning, before work, you open up your platform, put in your trading orders (entry, exit, stop, etc.), then you’re on your merry way to work.
For some people, Swing Trading can actually be easier (and more profitable) than Day Trading. If you’d like to hear more about that, check out this article on 5 reasons Swing Trading can be easier than Day Trading.
You Can Position Trade
If you’re personality matches that of a Position Trader, you like to trade every 1-6 months. You can sit in a trade, and ride the wave. You’re a cross between a trader and an investor, almost. You’re likely to catch the real meat of the move, and you probably won’t be found looking at every tick of the market.
You Probably Shouldn’t Day Trade
Unless you can watch every tick, I would recommend that you don’t Day Trade. A lot of good Day Trading comes from being able to read Order Flow. In order to read Order Flow, you really have to be able to watch the market on a tick-by-tick basis, otherwise you’ll just be out of tune with it.
That’s not to say that it’s impossible, it’s just improbable.
Notice that I didn’t mention much about types of analysis in this article. That’s because that choice is up to you. Whatever you use that works, use that. I will say though that on shorter timeframes (like if you’re Scalping or Day Trading), Order Flow is probably going to be a more profitable form of analysis for you than trying to be a Fundamental Trader on a 5-minute chart.
I say “probably”, because I don’t want to mislead anyone.
However, I think there is one form of analysis that everyone can benefit from. Whether you’re an Order Flow Trader, Technical Trader, or Fundamental Trader, you can certainly benefit from learning to trade Options. At the very least, whether you trade them or not, you’ll learn the statistics and probabilities associated with successful trading. For more information, check out our free course on Options or our paid course to learn Options from A to Z.
Anyhow, I hope this article was useful to you in more ways that one. If it was, we’d love to hear about it in our comments section below. Thanks for reading!