When many people start dedicating time to trading they can have some different experiences. Some might have a lucky streak with a lot of winning trades, even though they don’t know exactly what they’re doing. Others might have no luck at all and lose trade after trade.
This impacts the way they perceive how much effort and time trading is worth. Some will see it as easy money that can multiply if you put in the hours or it’ll look like a complete waste of time. Those among the former start putting aside even more hours in the hopes of a prolonged and stable income, with the latter just quitting because they think it’s too complex or a scam.
Which one is right? Or do both have a degree of truth in them? For the vast majority of people who decide to give the markets more attention, the truth is somewhere in between.
The best path is determined by YOUR personal amount of time that can be dedicated to trading. That amount should revolve around your free time and your trading style.
For those with little time who’d prefer a nice and easy start – 30 minutes to one hour per day should be enough. This would also include your research, chart review, performing an Elliott Wave analysis or using an indicator. We recommend trading a small number of instruments, anywhere between one and five.
This approach to trading will make you trade on either the shortest or the longest time frames.
Some will opt for the one and five minute charts, but they pose risks of noise and more chaotic movement, which can be hard (especially for newbies). 15 and 30 minute charts also fall in the short time frame category and can be traded on once or twice a day.
The other approach is to trade the hourly, four hour and daily charts. By just checking them once or twice a day you shouldn’t miss any of the entry and exit points they present and it makes for a calmer and more calculated trading experience. Albeit less exciting on a day to day basis.
Needless to say stop loss and take profit levels should be employed in both of these occasions. Their use combats one of the main issues with combining studying or working with trading – emotions.
Lectures and exams for students, deadlines and heavy workload for workers can take a heavy toll both physically and mentally. They can affect you during the day and even in mornings and evenings. Consequently this can make you lose focus and discipline while trading and you might incur losses because you’re tired or distracted.
Establishing a predetermined schedule, one which allows you to concentrate on trading, is part of the successful strategy of part-time traders. Knowing in advance what and when you have to do, be it opening and closing positions, or just quickly checking on open positions, makes it less stressful and limits mistakes.
Regardless of the time frame you choose to trade on, or the amount of positions you want to have open time is on your side. The more of it you allocate to trading, the better you’ll become. As a result you’ll need less time for identifying new opportunities, analysing and exiting them, hopefully with a profit.