Veteran traders have made trading their full-time job. Those who are just beginning and engaged in a secure business or job don’t want to test the waters by giving everything up. They are interested in trading, but they don’t want to engage in it full-time. You would be amazed to know that part-time share trading is also a brilliant alternative for new and busy traders. You can day trade and earn a significant amount of profits without compromising your secure income source. Many wonder how to become a part-time day trader. So, can I make money, day trading, part-time?
Part-time trader represents a freelance job where traders can trade a few hours per day besides their regular job. Usually, part-time traders trade long-term positions, saving time, working on technical analysis during the weekend or late evenings. However, Part-Time Day Traders trade during the market open or they specialize in trading in some trading time every day. Few hours per day on the trading side can be enough for trading either swing trades, long-term positions trades, or daily trades.
As you might have guessed from the name, part-time stock trading or share trading is an activity in which the person engages in the trading activities for a limited number of hours. Part-time traders trade for 1-3 hours per day. Dealing in stocks is not their full-time business. They engage in other financial activities as well. They follow strategies that allow them to make maximum profits within a limited time period.
If you are also considering part-time trading, the strategies given below can act as your guide.
How to become a part-time trader?
How to day trade part-time?
To become a part-time trader or day part-time trader you need to define your trading hours and then trade assets (forex, stocks, metals, etc.) that are most liquid at that time. You can trade using your own funds or you can manage funds from some prop company. As a beginner trader, you can get from $10,000 up to $100,000 to manage from a prop company.
Read our article about prop trading firms list.
For example, if you trade EURUSD or major forex pairs you can trade during European sessions or during US sessions,s or only during the time when EU and US sessions overlap.
For a part-time trader, the best trading strategy is to trade swing and long-term trades. In that case, you can work few hours per week where 90% of the time you will analyze the trading market.
How to Become a Successful Part-Time Forex Trader?
To become a successful part-time forex trader you need:
- Define trading hours that you can dedicate yourself to trading
- Choose preferred assets that you can specialize in trading.
- Use swing or long term positions if you are a beginner trader
- Develop and test each of your strategy based on past performance
Part-Time Day Trading Stocks and Futures
Day traders trade stocks and futures for 1-3 hours every day. This is because the market remains hot for a short period of time, and you can make the maximum possible returns during this window. Some traders certainly trade all day, but the day’s highlights happen during the opening and closing of the stock market, at 9:30 AM and 4:00 PM EST. The time period during lunch hour is rather slow.
If you are a new day trader, try to invest your time during the market’s opening. The market opens at 9:30 AM. This means that you must be ready with your strategy and the device latest by 9:15 AM. This is the time for your first trade. It is advised to spend around 1 hour in trading. However, if you don’t have a lot of time, the initial 30 minutes after opening are the most volatile. They have the most potential for making profits.
If you do have some time, try to trade till 11.00 AM EST. Since other part-time traders will leave by that time, you can still optimize the existing opportunities. The trade opportunities start declining as the lunch hour approaches. Around the lunch hour, the volatility starts to die down, and trades do take longer to complete.
If trading during the opening hours is impossible for you, your next window of opportunity could be from 3:30 PM to 4:00 PM EST. As the latter is the closing time, many day traders try to close all the trades before or at the closing bell. The market becomes volatile during this time as well.
These time suggestions apply to both stocks and the futures. Most commotion happens in the futures trading market just before and after the US stock market opens. It is evident in stock-related futures markets such as the E-mini S&P 500 (ES).
Part-Time Day Trading Forex
The opening and closing times of the stock and futures market are during general working hours. It would be difficult for a person with a daytime job to trade at either of the times. If such is the case with you, you can consider the Forex trading market as it operates 24-hours. If you can operate for 2-3 hours a day at odd times, you can still make the best of the Forex trading market.
In the Forex market, trade begins when you choose a currency pair. The former acts as the base currency, and the latter are the counter currency. The most popular currency pair is EUR/USD (Euro and the U.S. Dollar). Other popular pairs include the GBP/USD, AUD/USD, and USD/JPY. The most peculiar thing about these currency pairs is that they all have their respective ‘active’ period during a day. Thus, you can choose a pair that is perfect for your active hours.
For example, the most active time for the EUR/USD or GBP/USD is around the time when the US stock market opens and a few hours after that. So, the most active time for this currency pair would be from 8:00 AM to 11:00 AM EST. The other time period for this pair with significant movements is from 1:00 AM to 8:00 AM EST. This is because these are the business hours of Europe. This time bracket gives you the second-best trade opportunity for the EUR/USD pair. One positive here is that it isn’t extremely volatile. This makes it perfect for those just beginning and wishes to avoid the volatility that comes with the opening of the US stock market.
You can explore other currencies and find your best match.
Casual Traders VS Part-Time Traders
The answer to your question, “can I make money day trading part-time?” is ‘yes. You can make profits even when you don’t make trading your full-time job. But, this is only possible if you understand the difference between casual and part-time trading.
Part-time traders give a fixed number of hours to the trading activities during the day. They are regular at it. Casual traders are not regular, and this becomes their pitfall. They don’t have a fixed schedule and trade whenever the time permits them. They don’t move forward with a concrete strategy. Trading without planning is never fruitful. A casual trader might get lucky a few times, but there will be no real growth without a structure.
Part-time traders don’t act on impulse. Their transactions and investments are not random. They have a fixed time window for trading. Casual traders can trade at any hour for any length of time. They make trade 24/7 for a week and become dormant for the next week. As the market is always changing, casual traders fail to identify the latest trends and make mistakes. Their knowledge pool remains limited, which makes them poor at risk management.
Even if you are investing only an hour for trading, do it right. Treat it like a real job rather than a hobby.
Can you make $500 a day trading stocks part-time?
Earnings in trading are connected with risk and available funds in the portfolio. For example, $500 can be earned per day if the trader manages more than a $100 000 portfolio.
Many part-time traders assume that they can never make money like full-time traders. This is a myth. Most full-time traders switch to part-time trading because most movements in the market occur during a specific period. It makes no sense to them to stick to their screen when nothing is happening. Yes, there will be a difference between how an expert trader strategizes that impacts the profit, but investing fewer hours will not keep you from capitalizing on anything.
For example, a part-time trader, trading when most movements happen, can make $500 a day. They can earn this profit even when they are working for 2-3 hours a day. If they try to stretch the number of working hours, the profits will not differ significantly. They will be investing more time in negligible profits.
The best strategy is to find the right time window. Here quantity will not be beneficial for you.
It is not about the number of hours you spend in front of the screen. A part-time trader can easily make profits by trading in stocks, futures, or forex. It would help if you were efficient when the markets are the most volatile. The best time would be near the official U.S. stock market opening and closing hours in stocks and futures. In forex, you can even work when the European markets open.
One needs to be diligent and meticulous in making their trading strategy. Be consistent. Regularity is the key to making part-time trading a success.