I am frequently asked questions about part-time trading, and received a number of e-mails this weekend. The recent market action has something to do with it. I must admit that I too have been tempted to take a few days off and monitor the markets more closely. I'm glad I did not, as it would have likely lead to overtrading.
Here are a few past posts on part-time trading:
First of all, I would like to let you know that I enjoy your "Market Speculator" blog and find it very educational. After reading many of your posts, I noticed that you prefer not to micromanage your trades and sometimes only check the market a few times a session because of your day job. How do you enter and exit your trades? Do you use buy stops to enter positions or do you enter a position by buying when you get an opportunity to check the market?
I check the market a few times per day, in the morning, lunch and at the close. If I have time while at work, I might sneak in a few more looks. Each time I check in, I take a look at all of the stocks on my watchlist to see if they are at my buypoints. If the stock and market looks good, I enter.
This method works really well for breakout-pullback plays, but not quite as well if I am trying to time pure breakout entries. Therefore, I use buy stops for breakout plays. For example, if a stock is basing near a strong resistance level, I'll put a buy stop above that level. The drawback with the buy stop is I can't monitor the volume.
The key to trading part-time is to do loads of research at night, build a strong watchlist, and stick to that watchlist during the day.
Also, when you exit, do you enter a profit target order or just exit when you get around to checking the market and if the price is good you close the position?
I have a profit target based on technical factors for every trade I enter. I try to stick to the target, but may exit early if the stock isn't acting as it should.
Depending on the setup and how the sector is acting, I'll either use a trailing stop, take partial profits as each target is met, or exit in full. Trailing stops work best for trend trades lasting longer than one week.
Any tips you can suggest for swing trading the market and holding a day time job?
Have a disciplined post and pre-market routine. Carefully study market and sector action every day. Pay attention to market sentiment (high/lows, percent above 50 day moving average, etc). Study at least 300 charts per day. This is easy if you have Telechart. Create a daily watchlist based on your preferred setups. Preperation is the key to success as a part-time trader.
Here are some of my past posts on part-time trading, preperation and routines:
Early Rising Part 1
Early Rising Part 2
Watchlist and Entry Points
I welcome any questions my readers might have. Whether it's about my trading methods, sports, entertainment, something I've talked about, or anything else that you may have on your mind, feel free to leave a comment or email me at SinghJD1@aol.com