Part Time Trading Tips

Part Time Trading Tips

You don’t need to quit your job to trade stocks. Many of the best traders I know also hold down a full time job, and almost all of the pro traders I know began trading while working a 9-to-5. With a handful of tools and tactics you can easily bolster your income with some part time trading. Here’s how!

Focus on Swing Trading

You can day trade part time, but it’s more challenging than swing trading. Day trading requires laser focus and some serious butt-in-seat time during market hours. If you have a job that allows that, great! If not, you’ll end up stressed and compromising your job, your trading, or both. Swing trading is more flexible. Because you are generally looking for larger price moves over a longer period of time than you do with day trades, missing a $.10 move because you were at the water cooler generally isn’t a big deal. Conveniently, many of the principles are the same, so if you aspire to day trade, much of what you learn swing trading will help you become a day trader too.

Set Alerts

All modern trading platforms, including several of the free scanning and charting services, allow you to set stock alerts. You scan for stocks, build your watchlist, and then create alerts to notify you via email or text when those stocks are close to your ideal entry spot. Just be sure that you still evaluate each stock before buying and don’t jump in just because of an alert; a lot can change between setting an alert and that alert triggering.

Use Stop-Limit Orders

Some day traders use market orders, while others swear by limit orders. When you are part time trading, stop limit orders are the way to go. With a stop limit order, you set a stop price and a limit price. Once the stop price has been hit, a limit order is created at the specified price. For example, if you want to buy XYZ stock once it’s over $9.80, but don’t want to pay more than $10, you would set your stop price for $9.80 and your limit for $10. This gives you a lot of precision and doesn’t require as much babysitting as other order types.

Trailing Stops

If stop-limit orders are the buy order type of choice for part time traders, trailing stops are the stop loss of choice. The most common type of trailing stop is percentage-based – if XYZ stock you are holding drops more than 5%, it’s sold. That way, if you are in a meeting or otherwise unable to make the trade, you are still protected. One important detail to note, is that you want to ensure your trailing stop is GTC, or “Good ’til Cancelled,” so it won’t expire until it’s either been executed or cancelled by you.

Part Time Trading Summary

Trading part time is a great way to make a little – or a lot – of extra income! As with any type of trading, educating yourself is the first step. Check out our Bulls Bootcamp for more information about how to become a part time or full time trader.