Only a small number of traders are able to devote all their time to the Forex market. Often traders trade in parallel with the main work, during the lunch break 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, an open position on time can cause a complete loss of capital, and a missed trading opportunity or opening a position at not good enough prices can lead to insufficient profit. Both of these options can be disastrous for a part-time trader. However, there are a number of strategies suitable for periodic trading.
For example, traders who trade at night can carry out operations on currency pairs with a 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 the currencies so that during the day on the associated currency it is possible to evaluate the future movement of the traded currency pair.
An additional analysis of currencies correlated with a traded currency pair helps the trader to make profitable trading.
The main problem for part-time traders is an acute lack of time. Such traders are able to trade 1-2 hours a day or even a week. The following are strategies 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 trading in currency pairs, the trading activity for which is maximum at the time of your presence in the market. The schedule of the main currency markets will help you in choosing currency pairs.
From 04:00 to 13:00 Moscow time, the highest activity is observed in the Japanese and European markets, therefore the most liquid currency pairs for this time period are EUR / JPY, EUR / CHF or pairs containing Hong Kong (HKD) or Singaporean (SGD) dollar.
Starting from 02:00 to 09:00 Moscow time, the most active trading pair is AUD / JPY. Whatever currency pair a trader chooses, before entering the market, it is necessary to assess the current situation and conduct a technical or fundamental analysis of each traded currency pair.
If you are very limited in time and can afford to devote only a couple of hours a day to trading, your computer can become your “personal assistant”. Since the Forex market is volatile, the inability to continuously monitor it can lead to the loss of trading opportunities. The way out of this situation is the use of automatic trading and stop-losses to protect your open positions from possible losses.
If you open a terminal for Forex trading periodically during the working day (10 minutes at a time), the most suitable type of trading for you is technical trading. Technical trading – making trading decisions based on an analysis of current price charts and technical indicators.
For example, a trader can analyze the location of the current candle relative to the previous one. If the highs or lows of the current candle exceed the highs or lows of the previous one, we can conclude that there is an uptrend, and vice versa. As an additional confirmation, you can use the readings of technical indicators. The key to success is the right choice of technical tools for the time period used by the trader.
Despite the lack of time for constant Forex trading, 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 conducting a general market analysis and selecting specific currency pairs as trading instruments, you can open a small number of medium-term positions. It is extremely important to understand all the factors affecting the movement of the selected currency pair and conduct a thorough analysis of the current situation. It is also necessary to constantly use stop-losses for insurance against losses in the event of an unfavorable market reversal.
- Identify long-term trends. Instead of analyzing hourly or 4-hourly charts, you need to determine the trend on a daily or weekly chart. This will allow you to look at Forex only 1 time per day.
- Place pending trading orders. Setting pending orders, take profit and stop loss will help you use trading opportunities that you can potentially miss. Most trading platforms allow you to place such trading orders without paying additional fees.
- Use modern technology! Set alerts informing you of the market situation via SMS or email.
The Forex market has gained its popularity due to its round-the-clock operation. It is this feature that made Forex available to traders who do not have enough time to constantly monitor the market. Nevertheless, the Forex market is very volatile and carries quite serious risks, especially if the wrong trading strategies are used.