It’s a pretty common situation: a person has a little capital to invest, but not so much that they can afford to live off the interest. At the same time, they might make a habit of reading the financial news and know enough abTrading while working full-time is possible with the right routine. Learn how to balance day or position trading around a 9-to-5.out investing to make the mediocre returns and/or high fees charged by mutual funds and ETFs unattractive to them.
Very few people, of course, have both the money and expertise to make trading their whole profession. The vast majority of professional financial wizards spend their workday managing other people’s portfolios, not their own. Unless your nest is already well-feathered, most of your time is probably better spent on maintaining and developing other income streams. Of course, this isn’t even taking into account other obligations like your family, social connections, and your own health, none of which should be sacrificed just so you can spend more time looking at price charts.
If you have any dreams at all of one day becoming a full-time investor, though, any experience at all you can gain in preparation for that happy day will be worth its weight in gold. Learning the ropes does require a lot of time and dedication, and most people whose schedules are based on the nine-to-five grind will not be able to practise day trading effectively. However, there are no firm reasons why you cannot explore ways to incorporate some form of trading, whether in forex, stocks, or other instruments, into your daily routine as well as your monthly budget.
Planning Your Approach to Trading While Working Full-Time
For best results, balancing a new trading side hustle with your existing commitments should be done with a little forethought. Let’s explore the various issues involved in the following order:
- How often you wish to trade is perhaps the important starting point.
- The time of day when you can trade.
- Choosing the markets that can be accessed during those hours among those that will be most appropriate to your financial goals.
- The daily routine that a day trader or position trader might follow.
How Often to Trade While Working Full-Time
Just like the decision of how much capital you want to risk is a necessary step in starting to invest, someone who plans to trade regularly has to figure out how regularly that will be. This is often the hardest part of trading while working full-time. Both time and money are valuable resources and should be allocated carefully, after all.
In practice, scheduling your trading time generally comes down to one of two pretty simple options. Naturally, you could try to follow an intermediate strategy or some other one that’s better tailored to your personal circumstances, but most people will tend to gravitate to one or the other.
Option 1 – Day Trading While Working Full-Time
Perhaps you’re chained to a desk five days a week, maybe you spend much of your time on the road, or it could be that you manage a business on a full-time basis. Even with your rigorous schedule, though, you decide that day trading is something you can and should do.
Day trading can demand a lot of attention throughout the time the market you’re interested in is open. Instead of planning and executing all your trades in the hour before your regular job starts, you’ll have to make time throughout the day to check in on the markets, become aware of any of your positions becoming problematic, and perhaps spot a few developing opportunities.
The reason for this is that day trading is always proactive, time-sensitive, and fast-moving. A day trader typically conducts several transactions between the times a stock exchange or other market opens and closes. Their strategy is to take advantage of minor, rapid price fluctuations instead of trying to forecast long-term trends; it is rare for them not to close out all their active trades before the end of the day.
Despite the apparently chaotic nature of day trading, it is never done haphazardly or by trusting the seat of your pants. Making money as a day trader, whether part- or full-time, means gaining a thorough appreciation of each day’s market conditions and carefully planning each trade. Ideally, you’ll be able to devote a distraction-free block of time to this each day, perhaps in the morning before work starts or in the evening once you get home.
Finding Your Best Trading Window
Which is better depends largely on personal circumstances, and these can be quite diverse. A farmer who routinely gets up before dawn will presumably not want to be even more of an early bird, but can probably spare an hour or two for research once the sun goes down. Similarly, some professions have a more-or-less guaranteed stretch of inactivity at roughly the same time every day. Restaurant chefs are one example: they tend to be up to their necks in it during lunch and dinner services but aren’t all that pressed for time during the rest of the day. Assuming they have access to a computer and a quiet place to work, they may as well do some day trading during these breaks.
Generally speaking, day trading during slow patches at work is difficult to pull off consistently, especially for people in public-facing roles where the phone can ring at any moment. While anyone can learn the principles involved, applying them successfully requires concentration and a clear state of mind – a tired, stressed or distracted trader is unlikely to make good decisions. It’s therefore highly desirable, if you plan to try your hand at part-time day trading, to set aside a specific period at the same time every day. This can be as short as thirty minutes, though it’s better to dedicate two or three hours to nothing but trading, learning more about it, and refining your strategy. Most people really are creatures of habit, so this kind of consistency is hugely beneficial in itself.
Avoid Constant Price-Checking
The opposite approach, namely checking share prices on your phone between meetings and during bathroom breaks, is certainly tempting, given the ease of use that online trading platforms offer. However, becoming a consistently profitable trader sometimes requires the discipline to avoid this habit: snatching snippets of information throughout the day, without the opportunity to think about and place them into context, can end up doing your trades more harm than good.
It is, of course, true that following a more methodical, scheduled approach will cause you to overlook a few opportunities. If you only spend one hour per day watching the markets, most events and movements will escape your notice. This attitude misses the main point, though: being a successful day trader does not depend on buying and selling as often as possible, but rather on carefully evaluating the plays you do make.
Option 2 – Position Trading for People Working Full-Time
Day trading entails quite a lot of effort at the best of times, never mind if you’re also juggling another career. You have to wonder: do day traders actually make money, and indeed enough to justify their sacrifice?
For the most part, the statistics are not encouraging. While some traders do make high and consistent profits, the majority of individual investors cannot make this claim. It’s worth remembering that some of day traders’ favourite financial instruments, like CFDs (Contracts For Difference) and forex are essentially zero-sum games: one party has to lose for the other to win. If you want to be on the latter side of the equation, you need to be either lucky or both skilled and well-informed, and nobody is lucky all of the time. This uncertainty is exactly why many opt for a steadier approach to trading while working full-time.
If you want to avoid the drain on your time and energy required to thrive in the hectic day-trading environment, position trading or “set-and-forget” investing may be more your speed. (The two terms are not, strictly speaking, exact synonyms, but they are similar enough for most purposes.) Instead of opening and closing each trade within 24 hours, often managing several at once, positions are held for several days while keeping an eye on the market.
How Position Trades Are Managed
It could be that a trader following this approach does indeed choose to take profit (or cut losses) on some trade within less than one day. Other positions may be kept open for several weeks if it’s believed that the reasoning behind them will pan out. Instead of focusing on very short-term technical indicators, position traders emphasise end-of-day data. Building a strategy around systems like Japanese candlesticks, which show a security’s opening, closing, highest and lowest values, is common. If you’re already used to interpreting daily candlestick charts, you’re well on your way.
Why Position Trading Suits a Busy Schedule
On a practical and personal level, the big advantage of choosing position over day trading is that it’s just a lot less onerous. When you’re concerned about what a stock or forex pair might do over the coming week rather than the next few hours or even minutes, you can take your time with doing research and formulating trade ideas. By not chasing after short-term trading opportunities – that are, in fact, insignificant to a position trader due to them being smaller than price movements that occur over the course of days – a more sedate attitude allows you to discover prospects that are more certain and offer a better risk/reward ratio. It’s often the more realistic way to sustain trading while working full-time over years, not months.
Taking a slightly longer-term view of the market reduces noise and information overload. Using candlesticks, for instance, a trader is only concerned with the headline metrics of a single day, not any seemingly random price fluctuations that occurred between the market opening and closing. Since more enduring trends, even those lasting only a week or so, are more predictable, making investment decisions is slightly simpler than with day trading. Position traders are also less dependent on purely technical analysis and can incorporate market news into their strategies.
Wider Diversification with Less Effort
Position traders can also cast a wider net rather than confining themselves to only one or two markets. Due to the intense scrutiny day trading requires, high-frequency investing in multiple kinds of securities inevitably means spreading your attention very thinly. When all you need to check each day is one additional candle, it becomes feasible to monitor commodities, stocks across several industries, forex pairs, and more. Making fewer, less frequent trades also simplifies risk and money management, as well as reducing transaction costs.
So, position trading has several benefits, but day trading – even while otherwise employed – has its proponents, too. Every day, a great deal of economic news, corporate announcements, statistics, and analysis is released. To a day trader, each and every one of these bits of information can potentially represent a big trading opportunity; position traders pass most of them by entirely. In general, though, ephemeral dips and surges in the market are dwarfed by longer-term movements, and gauging the general mood and momentum of the market over a broader timeframe is a more reliable way of making money.
Choosing what time of day to trade
Choosing between day trading and position trading pretty much comes down to how many trading sessions you can squeeze into your work schedule. The latter can be done effectively as long as you can allocate a single stretch of time to your new sideline every day, while part-time day traders should ideally be able to check in on their positions every few hours.
The time of day – early morning, late afternoon, or whatever – during which you can log on to your trading platform, skim financial news reports, and so forth, depends largely on the demands of your employment. Finding that window is one of the biggest challenges of trading while working full-time. While doing research and planning positions in the morning, while your mind is still fresh and routine distractions haven’t had a chance to rear their head yet, is popular, setting your alarm clock for two hours earlier isn’t mandatory.
Most stock exchanges close at around 4 p.m. in their local time zone, but this isn’t an insurmountable hurdle if you’re more of a night-owl trader. It only means that you’ll be restricted to trading other markets, at least until you can finally quit your day job. Futures contracts, for example, can be traded at any time, though volumes are naturally higher during major financial centres’ office hours. Forex transactions also don’t go through any single exchange but are conducted on a 24-hour basis Monday through Friday; the action typically starts in Sydney, which is soon joined by Tokyo and China. Trading activity increases as London and Europe wake up and only starts to slow once the sun sets on New York. Understanding these overlapping sessions is essential knowledge for trading while working full-time.
A Practical Example: Trading Around a Full-Time Job
Let’s say, by way of example, that you live in London and are expected to be at your desk between 8 a.m. and 5 p.m., where you’re kept busy most of the time. Though this is the period during which British and European markets are most active, you nevertheless decide to try your hand at day trading. By arriving an hour before work starts, you not only avoid some of the crush on the Tube but catch the tail end of the Tokyo Stock Exchange’s day, which ends at 15:25 in Japan or 7:25 in England. From 7:30 until your boss saunters in, you can trade Asian currencies like the Yen or Renminbi while these are at their most liquid.
During your lunch hour, you could look in on the London Stock Exchange and other European markets, but social and work obligations will most likely make any serious trading impractical. Never fear, though: assuming you get home at 6 in the evening, U.S. stock markets are right in the middle of their most actively traded period. The only major markets you’re really excluded from are Australia, because it’s on the other side of the world, and Europe, because you’re in the office just when other traders operating there are.
You Don’t Need a Night Shift to Trade Globally
The point here is that, regardless of whether day trading or position trading appeals more to you, you don’t need to start working night shifts to start trading on a part-time basis. You don’t even need to make after-hours trades, something that can be risky especially for a novice investor. As long as trades are based mostly on technical analysis (and perhaps get comfortable with using Google Translate), there’s nothing stopping someone based in Ohio from trading the stock market in Shanghai.
It is, however, recommended to only access markets when they are fairly active. When trading volumes are high, the market’s price discovery mechanism operates most efficiently, meaning that spreads are tighter (reducing transaction costs) and random volatility is reduced. This logic applies especially to day traders, who will also benefit from the more rapid short-term price moves typically seen in a very liquid market.
Choosing which markets to trade
Even if you can only trade at what seems like an odd hour, you still have a number of choices when it comes to what exactly you will trade in. In some ways, it doesn’t really matter. Day traders, in particular, are often highly reliant on technical analysis: as long as the numbers are making the right kinds of patterns, they don’t care much whether the underlying asset relates to Kazakhstani wheat futures or steel production in Jakarta. Picking a manageable niche makes trading while working full-time far more sustainable.
There’s also no rule that says you can’t branch out into other markets later on, or shift your focus away from some types of securities. Even so, it’s worth developing a certain level of expertise in a particular market. This doesn’t happen overnight; as someone who trades while also working a normal job, every investment of your time should be assessed as carefully as you do financial trades. The best advice is probably to learn a little about all kinds of tradable instruments, then pick whatever appeals to you and stick with that at least until you’re sure that some other market actually suits you best.
Speaking very generally, we can divide financial markets into two basic categories. Day and position traders need to apply different strategies to each in order to be successful:
- Forex, indices, commodities, and derivatives based on these.
- Stock markets, including share CFDs and other stock-related instruments.
Picking Your Market Niche
Obviously, the first category is a pretty broad umbrella. While indices, commodities, and forex do have a lot in common, part-time day traders tend to specialise in only one of them. So, just choose your favourite or whichever you understand best, and focus your attention on that. Trying to do more than that only means diluting the effort you put in during the few hours per week you have available. In fact, you should probably narrow the scope of your trading further, perhaps concentrating only on agricultural commodity futures or European indices – though this may seem restrictive, you will still find many trading opportunities every day. While general trading experience is always valuable, specific knowledge of current conditions and past tendencies is what will enable you to make money in day trading.
How Many Markets You Can Realistically Follow
Of course, you can use your personal judgment as to how thinly you can spread your attention across different markets. The frequency with which you make trades also plays a role. Position traders, who typically hold securities for several days, have an advantage here: if your starting point for evaluating trades is the Japanese candlestick method, you only have to check a single new candlestick every day to keep track of each security you follow. Because of this reduced intellectual overhead, it may be feasible for you to invest in forex, commodities, bonds, and stocks all at the same time (or, practically speaking, options, CFDs and other derivatives based on those). It’s best not to be too ambitious in how many markets you scour for opportunities, though: if you look too widely, you may end up missing what’s right under your nose.
A good way to ensure that you’re not overextending your attention is to keep an investment journal and record your thoughts on the markets you’re interested in – not just the reasoning and setups behind the trades you make. You will find that, even if you’re only looking at daily price charts and not every blip and squiggle in the price, adequately monitoring more than a dozen or so is very difficult. Remember that prominent hedge fund managers often have only about ten large, actively traded positions going at any one time. If they, even with Bloomberg terminals and full-time research staffs, can’t oversee more than that adequately, part-time traders shouldn’t even try. Staying within your capacity is one of the golden rules of trading while working full-time.
Stock Market Requires More Active Monitoring
The stock market and share derivatives are distinct from, say, forex in the sense that markets aren’t active 24 hours a day. In addition, any given market may at any given time be trending either upwards or downwards, or bouncing around within some range. Sifting through the hundreds of securities available to you in search of shares that are likely to do well under these different conditions is, to say the least, a non-trivial task for a part-time trader.
In practice, part-time day traders who prefer the stock market have a daily watch list of shares they look at closely when these trigger automatic price alerts. Position traders, also referred to as stock pickers, are more prone to monitoring the wider market for opportunities. In the latter case, this may be done after the market in question has closed and the day’s hullabaloo has died down, so they won’t be trading so much as setting orders to execute when stock transactions can be executed.
Market orders will go through as soon as they can be matched to a buyer or seller at whatever price happens to be current at the time, increasing such a trader’s risk. Limit orders, on the other hand, are only filled when a designated level is reached; if not, you simply don’t enter the market as the final puzzle piece of your trade setup has probably not fallen into place.
This may happen while you’re asleep or immersed in regular work activities, so you will still have to make some time during the day to check on your trades and perhaps modify your stop-loss and take-profit levels based on new market updates.
Tools for Finding Stock Trade Ideas
Many in this position, therefore, use scanners or screeners – software that performs real-time technical analysis – to seek out trading opportunities. These may take the form of stocks that are about to break through a fifty-day or two-hundred-day high, or those that are trading above a medium-term moving average, or simply companies that are about to release earnings reports. (The number of options you can select and figuring out which industries each is most appropriate for is itself daunting.) Alternatively, you can pick a few companies you think have potential and keep researching developments affecting them. You may also use news coverage as your starting point, dig a little deeper into the stocks likely to be moved by them, and decide whether it’s worthwhile taking positions on these.
The specifics of choosing a market that suits your skills and your schedule, finding time to trade it effectively, analysing securities, maintaining a trading diary, and so forth, could each occupy an article much longer than this one. This is one decision it’s best to approach calmly and systematically, though: if you jump right in, you may soon discover that you’re swimming in entirely the wrong pool.
The daily routine of part-time day trading
Trading while working full-time means fitting a structured routine into whatever hours you have free.
Before you decide on commodity futures over forex, or whatever market you end up settling on, it’s probably a good idea to assess how becoming a part-time trader may impact your daily life. While trading is a viable means to increasing your income, this isn’t necessarily worth sacrificing activities that already give you joy.
Since everyone’s timetable will be different, we’ll have to restrict ourselves to a single example: imagine that you arrive home at six in the evening, spend an hour greeting the dog and any family members, and devote the two hours between seven and nine to trading.
Your first order of business will be to review the past 24 hours’ news headlines: were any recent economic or financial announcements (interest rates, employment data, major company results, etc.) surprising or in line with expectations? Have there been any political moves you should be aware of, perhaps an important government official dismissed or instability in a country that supplies an important niche commodity? It’s impractical, not to mention depressing, to read the news in detail. Instead, you will scan headlines for anything significant that may have an influence on your chosen market, and perhaps set up custom news alerts. It can be a good idea to set a strict time limit for this activity in order to avoid getting sucked down any irrelevant rabbit holes.
From News Check to Chart Review
Next on your rather crowded to-do list, you’ll turn to an arguably more accurate source of information than many newspapers: daily index and price charts. The best procedure is to work from longer timeframes to shorter, starting with daily and four-hour charts to get a sense of general market conditions, then zooming in to views comprising a few minutes or so where you can spot short-term trading signals.
Apart from reviewing the market as a whole, you’ll only spend time on the securities you’ve specifically designated as worth monitoring. If you’re in the stock market, this will mean at least glancing at several, while forex day traders may scrutinise two or three. This is the most time-consuming part of your trading day: making sense of what is happening and waiting for suitable trade setups to show themselves.
Placing and Managing Trades
At this point, once you’ve identified and confirmed such an opportunity, you’re ready to actually start placing a few trades. As a day trader, you’re more likely to place market orders, snapping up securities at the price they’re currently being offered for rather than waiting for them to reach some predicted level. Remember to jot down a few notes about what, when, why, and how much, so that you can update your trading journal later. Once you’ve taken a position, you can move on to a different security, returning to your open trades every few minutes. Most often, the idea will be to close all of these by the end of your two-hour trading period. (If this happens to be in the morning and you’re able to check on your positions later in the day, you may hang on to them a little longer.)
Once you’ve done so, it’s a good idea to download your session history from your online trading platform and review it. Which trades performed well, and which did not go as expected? Sometimes, inscrutable market forces can ruin the best-laid plans, but you should see certain patterns emerging over time. You may also want to evaluate your decision-making process. Do you remember saying to yourself: “I know this goes against my strategy but I’m going to do it anyway, because ‘this time, it will be different’”? There’s no reason to make the same mental mistakes time and again.
Reviewing performance regularly keeps trading while working full-time sustainable long-term.
Time Commitment and Trade-offs
During the weekend, things will usually be a bit less rushed. Though stock markets are closed and trading volumes elsewhere are lower, you’ll have more time to do research and in-depth market analysis, both on securities already on your watchlist and new prospects. Regardless of what you trade in, it’s useful to consult opinions and data other than the snippets of information you may be getting from your signal service. The weekend is also a good opportunity to study some trustworthy books and blogs to improve your understanding of how markets work, as well as look at long-term trends – though not always relevant to day trading, this can allow you to get a better feel for the context in which you operate.
A Position Trader’s Routine While Working Full-Time
For a day trader, the weekend is a chance to catch their breath, regroup, and refine strategies. Position traders, on the other hand, tend to structure their weekday activities around what they’ll do on Saturday and Sunday. Since minor, short-lived spikes and dips don’t matter to them, there’s more need and space for planning and reflection.
Position traders still need to allocate a daily trading session, though; let’s imagine you’re based in Western Europe and schedule your investing in the evenings. As the closing prices for various securities are important benchmarks, this is convenient: the German Xetra and British LSE will have tallied up the day’s losses and gains by the time you get home, while the New York exchanges (NYSE and NASDAQ) are winding down around the time most responsible adults go to bed.
This is one of the more manageable ways of trading while working full-time, since it takes less time each day.
As each exchange closes, every stock on your radar gains another, brand-new Japanese candle. (Obviously, we’re talking about equities here, but something similar applies to forex and derivatives due to the way trading volumes fluctuate throughout the day.) The fresher it is, the more valuable a very short-term trader finds it. You can also review the market near closing, though this adds complexity and isn’t necessarily what you want when you’re already “burning the candle at both ends”.
Reviewing Open Positions and Charts
After spending a little time going over pertinent financial and political news, you’ll make a point of seeing how all your open positions are doing. Unlike day traders, a “set-and-forget” investor does keep open positions past market close, though they do not actually forget about them in the same way a value investor might. Are the assumptions behind each trade panning out? If not, you should either cut your losses or make a conscious decision to leave it open until the market, hopefully, catches up with what your trading plan says it should do.
With this done, it’s time to cast an eye over the daily and weekly price charts of securities you either trade regularly or that have caught your notice. While you don’t need to make any major strategic decisions – a job normally reserved for the weekend – you needn’t be oblivious to developing trade setups or interesting price movements. .
Setting Up Trades for the Next Session
If you can identify breakout, resistance, or support levels, it makes sense to sketch out and place a few trades to be executed the next time your chosen market opens. This entails a particular kind of risk, though: you won’t be the only one doing so, and after-hours trading (not to mention unexpected news events occurring in the meantime) can result in price gaps you could not foresee. It’s therefore best to conduct your trades using limit and stop orders, so that trades won’t be executed unless the price reaches the number you specify.
Common practice is, in the case of buy-stop orders, to set these just above the expected market price in order to take advantage of a bullish breakout or automatically limit losses on a short position. Conversely, buy-limit orders are placed just below your predicted price. This is not set in stone, however: other tactics, including those using market orders, do exist but should be applied with care.
Time Commitment and Trade-offs
Depending on the number of securities you track and the complexity of the analysis you apply, you can probably manage to cram all of the above activities into an hour or so. Since many people opt for position trading over day trading due to a shortage of time during the workweek, this is beneficial. The tradeoff is that more of the work is shifted to the weekend.
Of course, many part-time investors who do have enviable chunks of free time during the week are drawn to position trading for other reasons; their routines will probably be different. The key point to understand, though, is that this style of investing can’t be done just by scanning weekly and daily price charts in hopes that lucrative trade setups will appear – it is also necessary to interrogate those market movements and gain some idea of what’s driving them and what the immediate future may hold.
Looking beyond immediate technical analysis and examining real-world causes requires different mindsets. For this reason, it’s best to split up these activities. Normally, this means devoting weekday nights or mornings to identifying momentary trends, spotting overbought and oversold conditions, and making estimates of the support and resistance levels that apply at the moment. Clearly, if you’re a short-term trader rather than a buy-and-hold investor, these are daily tasks.
Weekly Review and Strategy Refinement
Over the weekend, when life shifts to a lower gear, you can take a step back and put on a different kind of thinking cap. At this time, you have a chance to evaluate the general economic backdrop, guessing at buy setups that may develop in the next few days or weeks, and review your recent trading history from a diagnostic standpoint. Even though you probably only placed a handful of trades during the past week, scrutinising them in hindsight and updating your trading journal with qualitative comments is one of the surest ways of developing and refining your trading strategy.
Additionally, you can take the opportunity to do some analysis of the broader market and pick a few securities that seem to be worth keeping in mind. Most day and position traders, focusing on only one market and perhaps just a subset thereof, don’t radically alter their watchlists from one month to the next. Taking some time to do deep research and potentially unearthing unexpected opportunities is always desirable, though, and can’t really be done effectively while you’re checking your email and waiting for the next meeting to start.
In conclusion
The simple truth is: there are always a million reasons not to start a new project or sideline.
Trading while working full-time is demanding, and success is never guaranteed, but that doesn’t mean it isn’t worth attempting.
Yes, part-time trading is demanding, and success is never guaranteed. This is all the more reason not to rush into it headlong, make mistakes, and end up disillusioned with investing in general.
Yet many working professionals do make trading part of their daily schedule. It’s not just something they brag about at parties, either: those who succeed can earn a tidy sum each month. The real question is, then: what distinguishes them from those who quit in disgust and failure? While temperament, education, and basic smarts do play a role, the single common denominator successful part-time traders share is a deliberate, systematic approach to their hobby. While there is something to be said for a proactive attitude – and this is indeed part of the trading mindset – understanding exactly what is involved and how it will affect your current lifestyle is a prerequisite for getting started. In practical terms, this is even more important than learning the mechanics, art, and science of trading.
Ultimately, trading while working full-time comes down to discipline and realistic expectations, not talent alone
