Can You Become a Successful Part-time Forex Trader?

As inflation rises and the cost of living soars, households are struggling to cope with the increasingly prohibitive price of food and energy. Real wages are also stagnating in real terms, meaning that it’s becoming increasingly hard to fund even everyday costs and expenses.

At the same time, savings accounts are no longer as lucrative as they once were. In the UK, for example, the number of accounts paying above the base rate of interest (0.5%) has fallen to its lowest number since 2008 (912), when the world was gripped by the global financial crash.

With these facts in mind, it may be worth seeking out creative investment strategies that focus on increasingly your earning potential. This solves all of these issues listed above, and in this respect, becoming a part-time forex trader could offer a viable resolution.

Forex is the Largest Market of its Type in the World

According to the most recent statistics, the forex market boasted a daily trading volume in excess of $6.6 trillion at the end of 2019. This number had increased from $5.1 trillion since 2016, highlighting rapid growth that has continued regardless of the wider market climate.

During the same period, the cumulative value of the forex market increased from $1.934 quadrillion to $2.409 quadrillion, with this dominated by the seven ‘major’ currency pairs that comprise 68% of the sector’s total volume.

These pairs, which include the USD/EUR and USD/JPY, dominate the market and create tremendous liquidity, while the presence of inflated leverage in the forex market also contributes to its size and popularity.

Interestingly, the UK has also remained an epicentre for currency and forex trading, despite the impact of Brexit and the separation of Britain from the EU.

To this end, London has continued to increase its lead versus New York and other global forex centres, hiking its market share for foreign exchange trading from 36.9% in 2019 (and prior to the vote) to 43.1% in April 2019.

How to Become a Successful Part-time Trader

The question that remains, of course, is how can you leverage this opportunity and become a successful part-time trader? Here are some tips and strategies to help you on your way.

  • #1. Use a Demo Account: All reputable brokers should offer a demo account, which can be used for between three to six months and simulates a real-time market environment. As a result, they enable you to experiment with different currency pairs and trading strategies without risking your hard-earned cash, as you look to apply your theoretical knowledge and gain practical experience of the marketplace. 
  • #2. Create the Right Mindset: One of the issues with part-time trading is that it can foster the wrong mindset. However, to achieve success in the market (regardless of your setup), you’ll have to create a professional and focused mindset that looks to minimise risk, optimise returns and scale organically over time. This may be referred to as a true investor mindset, and one that may set you apart from your competitors.
  • #3. Automate Trading and Risk Management: If you combine forex trading with a 9-5 job, you’ll need to automate trades in line with your broader investment strategy. This is in the interests of saving time and driving efficiency, but remember that you’ll also need to deploy automated risk management tools to help provide a layer of protection. You could look to use stop losses, for example, which automatically close specific positions once they’ve incurred a predetermined level of loss.

Written by Eric

37-year-old who enjoys ferret racing, binge-watching boxed sets and praying. He is exciting and entertaining, but can also be very boring and a bit grumpy.