Wednesday, June 04, 2014

10 Keys to Success For Part-Time Stock Trading

Before I became a full-time trader, I traded part time around a demanding job, family obligations and social life.  Here are the most important tips that I used to successfully trade part-time around a job.  These tips worked so well that I now trade full-time.

1.  Keep it simple
 
Technical swing trading is not complicated.  It is all about risk and trade management, price action, support and resistance levels, and volume.  Indicators and setups just reflect what we see, and often we make trading more complicated than it needs to be.  Stick to one or two indicators and a handful of setups that you know inside and out.  That's all you need.  Everything else is a waste of time.

2.  Create a routine

Create a simple process that speeds things up and keeps it simple.  Do the same thing day after day.  I got to the point where I would spend no more than an hour going over charts, watchlists and my focus list for the next day.

3.  Take smart shortcuts

Figure out smart ways to cut time.  Create scans in charting software that can spit out stocks with your favorite setup, rather than manually flipping through thousands of stocks, create tight watchlists which you can analyze in less than 20 minutes.  Follow or subscribe to someone you respect and trust that mirrors your trading style. 

My Trade Report is patterned after exactly what I used to take with me to work when I traded part-time.  It includes market analysis, my focus and watchlist that I use to trade, my current and past trades, alerts, and trader education.  Feel free to check it out and see if it can help you with this free trial

4.  Find a mentor
 
Every trader makes the same mistakes.  I have mentored dozens of students and see the same mistakes over and over again.  Trust me, even the great ones once made the mistakes you are making. 
 
A mentor can help you identify and cut down on those mistakes, and hone in on what works and what does not.  If you are interested in me as your mentor, contact me at Singhjd1@aol.com

5.  Become an Expert
 
There is a mistaken assumption that part-time traders are not experts at what they do.  Just because you are trading part-time, does not mean you are slacking at the job of trading.  Put in the time to get good at what you do.  Study, analyze and reflect.  I'd rather be an expert part-time trader than a full-time hack.

6.  Focus on the process
 
Making money in trading is all about understanding probabilities, reflected in our risk and trade management.  Even when you have a setup that has an 80 percent win rate, you will go through draw downs where you are on the 20 percent side of the math.  Focus on the process and whether or not you executed the trade correctly.  For a short period of time, the results are irrelevant.  In time you will get back on the right side of the probability.

7.  Use technology

Make use of technology that makes things easier and faster.  There is plenty of free or cheap charting software.  The small investment is well worth the hours it will save you.  Use your phone or tablet to make trades while at work.  Set up alerts for buy and sell signals.  It has never been easier to trade.

8.  Have a plan

Going into the trading day, you must have a plan.  If you have a focus list of 5-10 stocks, only watch those and stick with your entry points.  Know exactly where you will exit, both for gain and loss.  You should not have to think when looking to trade.  Thinking is done before the trading day.

9.  Do not micro-manage positions

One of the biggest stumbling blocks for swing traders is over-trading and not letting your stops and targets work for you.  Use the fact that you have another job or responsibilities work for you.  Don't watch every tick.  You came in with a plan and now you must stick with it.  Enter, set your stop, target and forget about the trade.

10.  Review your trades

At the end of the month or quarter, review all of your trades.  Identify what worked and what did not.  Analyze whether luck was not on your side or if was a mistake you made.  You will learn more from trade reviews than any book you can find.

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1 comment:

Mike said...

Indeed, You have posted well written post on "10 Keys to Success For Part-Time Stock Trading". The small investment is well worth the hours it will save you. Thanks!
spread trading