Inflation is driving up prices, and your monthly paycheck is not stretching as far as it used to.
Rather than cut down on your barista coffee consumption, why not think of ways to supplement your income? There are several side hustles that you can pick up without having to sacrifice too much sleep.
Forex trading, for instance, can rake in a healthy side income if you know the techniques to make it work.
Here are five tips on how you can hang on to your day job and do some forex trading on the side:
Keep it simple and focused
Behind every successful trader is another trading strategy they swear by. The trading world is never short on ideas on which strategy will yield the greatest profits.
You will need to pick one that works best for you. That means deciding on a plan that fits your work schedule and trading experience.
This may impact the currency pair you choose to trade. You will want to be available when the pair's liquidity is strong.
You also should consider a strategy that is simple and streamlined. Something complicated may mean you have to steal hours from your day job or sleep to tend to your trades.
Exercise self-discipline and rein in your emotions. Part-time traders, in particular, should take profits when they can rather than anticipate bigger hauls that may never materialize. This is critical for fast-moving currencies.
Identify currency pairs that suit your hours
Forex trading runs 24 hours a day, five days a week. Traders know peak volumes are the best time to transact since there is strong liquidity.
You will want to identify currency pairs that hit peak volumes during hours you are free from your regular job.
Part-time traders usually are advised to trade US currency against foreign currencies, such as the Japanese Yen or Euro. These currency pairs see brisk or high trading volumes, offering strong liquidity and more room for traders to sell a position, making it ideal for part-time traders.
Things can quickly become overwhelming when you are trading with hyperactive currencies. Plan your trading strategy around your lifestyle, so you do not need to stay glued to your screen. Schedule a couple of times a day to check your trades or adjust orders. You can choose to enter and exit the market when you are away or unavailable.
Automation lets you plug-and-trade
If your full-time job keeps you busy, you can cut some of the work by using an automated trading platform.
There are several such tools available in the market today that provide a range of functions. Some monitor currency prices in real-time, while others automatically place trading orders according to set parameters and stop orders.
Automated trading platforms also can help improve your discipline since they are guided by preset limits.
They also allow you to follow traders with proven strategies and track records. For instance, Forex4you's copy-trading service - Share4you - lets you copy the activities of traders experienced in forex. This is especially useful for part-time traders who may not have the time to closely monitor the market.
Keep in mind that when a trade is automatically ordered, it does not mean it will be filled at the price you expected. This is due to the volatility of the market.
Establish stop-loss orders to mitigate risks
Your day job keeps you busy, and you do not always have time to study the market and hone your trading skills.
This can lead to mistakes and losses. To mitigate such risks, establish stop-loss orders so you can exit positions at a specific exchange rate.
This is a significant risk management step. It helps forex traders cap their risk per trade and prevent astronomical losses.
Experienced forex traders know it is just as important, if not more important, to avoid significant losses than make huge profits.
Keeping a full-time job helps take some stress away when you have had a particularly bad day on the trading floor. However, this should not mean you can go wild with your investment. Always trade with only money you can afford to lose.
Weekends are for trade improvements
Take some time out over the weekend to review your trading activities and identify ways you can improve.
Look for patterns and read up about market news that can impact currencies you trade.
Keep a trading journal so you can analyse how well, or badly, your trading strategy is doing. You then can make changes and refinements to improve your returns.
Identify what you need to know to make decisions on your trades. This may mean understanding some fundamentals about the economy and how certain shifts can affect your trade.
Forex Trading involves significant risk to your invested capital. Please read and ensure you fully understand our Risk Disclosure.