How to Trade Successfully With a Day Job

By Nial Fuller Posted in Forex Trading Blog 

If you’ve been following my Forex trading lessons for any length of time you undoubtedly know that I pride myself on providing honest and practical trading insight. So, let me cut to the chase early in today’s lesson and just tell you this now: you can successfully trade the market while keeping your day job and without having to drastically change your daily routine.

Many aspiring traders seem to think that they won’t be able to trade successfully or take advantage of potential trades if they are not in front of their computers 8 hours a day. However, this line of thinking is fundamentally wrong and I am going to explain why for you in 6 simple steps:

1. Keep your day job while mastering the art and skill of trading

Do not view your day job as an impediment to successful Forex trading, instead, you should understand that having a day job and a daily routine can actually help you stay away from the markets, and this is a good thing. Many traders are too involved with their trading, whether it’s reading endless economic news articles or staying up all night analyzing their charts, the fact is that absorbing too much information on the markets is only likely to confuse you and (or) cause you to trade too frequently. A job gives you something to take your mind off the markets and let them do their thing without you interfering, and this will work out in your favor in the long-run.

It’s also important to have a stable income while you learn to trade, this way you will not feel the emotion and pressure of ‘needing’ to make money in the markets. I get a lot of emails from aspiring traders who tell me they ‘need’ to make money in Forex for X,Y,or Z reason, and I respond to them all the same way; until you figure out how to remove your ‘need’ to make money in the markets, you will never make the money you so badly desire. Making consistent money in the markets takes a clear and calm mind, and if you are preoccupied with making money in the markets to quit your job or pay your rent, you are unlikely to have the proper trading mindset.

2. You only need 30 minutes a day for market analysis

Contrary to what many traders believe, you don’t need to analyze your charts for hours upon hours each day. You really only need 30 minutes a day to properly analyze the markets once you know what you are looking for. After you have mastered an effective trading strategy like price action trading, you can then develop a trading plan based off of it and this will give you the ability to analyze the market very quickly each day.

Ideally, you will dedicate 15 minutes in the morning (before you go to work) and 15 minutes in the evening (after work) to analyzing the markets. You see, once you know what you are looking for in the markets, you simply check for your trade setup and either enter a trade or do nothing until the your next market analysis time. Trading off the daily charts is especially suited for start of day / end of day analysis. If you focus on the daily charts you can focus on checking the markets after the New York close each day (5pm NY time) and then again about 8 to 12 hours later, depending on your schedule.

3. Being away from the market can help develop good trading habits

Trading habits are what determine whether or not you make money in the markets. If you are over-trading and over-leveraging your account, then you have the wrong habits that are the result of the wrong trading mindset. Now, how does your day job play into developing proper trading habits?

Well, if you let the market do its thing while you are at work, you are going to avoid ‘suffocating’ your trades by watching them too long and generally analyzing the markets too much. Too much analysis of the markets usually results in over-trading, so by removing yourself from the markets when you go to work, you will remove a lot of the temptation to trade too frequently.

Yet, many traders ask me, “Nial, will I miss out on trading opportunities while I’m at work?” The answer to this is yes, you probably will. But, you need to ask yourself why are you in such a big rush? The answer to this question is that you feel that ‘need’ to make money which we discussed before and until you remove this need you will not harbor the proper trading mindset. So, by just relaxing a bit while you are away from the markets, and realizing that you don’t need to take every single trade that manifests in the market, you aren’t hurting your long-term chances at trading success, in fact you are improving them.

Once you start to see that taking a longer-term approach to the markets pays off, it will begin to reinforce the positive trading habits of patience and discipline, and then you will begin to develop the proper trading mindset more and more, until eventually you are a trader with positive trading habits and the correct trading mindset, at which point you cannot be stopped from making money consistently.

4. Don’t put all your eggs in one basket

It’s important to have a back-up plan in case you do not end up achieving the level of trading success you desire. You should never put all your eggs in one basket when comes to investing your money, everyone knows this, and trading Forex is no different. You should view your Forex trading activity as another way for you to diversify your overall investment strategy, it should not be the only way you plan on making money, at least not while you are new to the markets.

You should view trading as a way to supplement your day job income, this will work to relieve the pressure of ‘needing’ to make money in the markets, and if you take the pressure and the ‘need’ to make money away, you will also eliminate most of the emotion involved with trading, and this will then open the door for you to be able to make consistent money in the markets. Essentially, the more you feel an emotional ‘need’ to make money in Forex, the less likely you are to attain it.

5. End-of-day data is key

Analyzing end-of-day chart data essentially just means analyzing the daily charts after the New York close. It’s important to try and analyze the daily charts each day between the New York close and the European open. To learn more on Forex trading times, check out my article on the best times to trade Forex. The reason why analyzing end-of-day is important is because it is at the end of New York trading when the final day’s settlement takes place between the bulls and bears. Thus, at this time many price action setups form and we also can see a clear picture of who won the battle between bulls and bears for that day.

By simply waiting to analyze the charts until the end of New York trading and the close of the current Forex trading day at 5pm New York time, you can significantly simplify your trading while simultaneously getting the most important view of each day’s price action. Many traders spend countless hour micro-analyzing the intra-day charts when the daily chart provides us with the most accurate reflection of the overall market picture. Thus, by focusing our market analysis efforts on the daily charts we are naturally going to take higher-probability trades with a lower quantity of trades taken each month.

You can think of trading end-of-day charts as the perfect overall trading approach since it allows you to maintain your regular day-job schedule while also freeing you from the temptation to over-trade and over-analyze the market, while focusing your efforts on the most pertinent view of the market, which occurs on the daily charts.

6. How trading less can help you make money faster

Trading less is a natural outcome of focusing on end-of-day data and on the daily charts. You need to understand that trading less is a good thing, unlike many aspiring traders seem to think. By trading less than the masses of struggling traders, you will gradually improve your consistency over time and you will also reinforce the positive trading habits of discipline and patience. You can focus on a handful of major Forex pairs each day like the EURUSD, GBPUSD, AUDUSD, USDJPY and others, to see the other pairs that I focus on, check out my article on the best Forex pairs to trade.

When you focus on the daily charts and the major pairs, you can expect anywhere from 4 to 12 solid setups each month, on average. Some traders are trading 12 trades a week or even per day, this is just lunacy and is more characteristic of a drunk gambler at a casino than a skilled and calculating price action trader. Once you learn to embrace the patience and discipline that comes with focusing your efforts on trading the daily charts, you will begin to see a positive change in your trading account, you just have to find the willpower to stop looking at those 15 minute charts and start understanding that by not trading you are also not losing any money. Not trading too frequently ties in with my concept of learning to trade like a sniper and not a machine gunner.

Finally…

The common theme in this article is that you do not have to trade a lot to make money in the markets and become a successful trader. There is no direct correlation between quantity of trades entered and an increase in the value of your trading account. In fact, it is widely known that traders who trade less frequently tend to do better on average than day-traders and traders who enter larger amounts of trades each month. The point of this article is that you should not think your day job is going to inhibit your chances of Forex trading success, but you should understand that having a daily routine and time away from the markets can actually increase your long-term potential to make money in the markets.