Many individuals want to have a full-time trading career but cannot due to personal restrictions; and so, they begin part-time trading in the stock markets to make that extra income.
If you are a part-time trader who wants to earn significant returns, here are some tips:
Swing traders are traders who hold stocks for a few weeks to few months. Their holding depends on the market conditions and their trading strategies. Most trading strategies aim to identify the vantage point of the trending stock and use it for their profit. This strategy of trading is apt for the part-time trader as there is no need to time the markets or calculate the accurate entry and exit of the investment.
Have a go-to move
Every part-time trader needs to have a go-to move that will boost their profit potential. As a part-time trader, you should stick to bread and butter strategies like break out pullback, trend pullback and post earnings trades and others. Increasing your expertise with these strategies can help you earn significant income from part-time trading.
Have a watchlist
As a part-time trader, you should curate a watchlist of stocks that will command attention on the following day. Curating a list of stocks will help you narrow down the stocks that are in alignment with your bread and butter strategies.
Identify entry and exit points
After curating the watchlist, you need to assign entry and exit points to the stock under consideration as well as the targeted earnings from it. Calculate these values using your strategies, but also figure out your risk appetite, i.e. how much you are willing to lose if a stock loses its momentum and what will be your exit point in that case scenario. Once you calculate these values, you are prepared to conduct a successful trade.
Target and exit levels
Once you have initiated the trade, there will be an enticing and overwhelming urge to elevate your position. This urge could, however, result in overtrading, which is detrimental to the interests of part-time traders. Turning off the quote feed is a recommended exercise to stop exerting yourself after an exchange is made. With well-planned risk analysis and exit points, you can lessen the probability of huge loss to your portfolio.
These are some smart and safe tips that will help you conduct profitable trading in the stock markets while keeping your day job. Consistent adherence to these tips will ensure that you understand the intricacies of the market and become a successful part-time trader.