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Very few people know how to trade forex full-time. But part-time forex traders have successfully supplemented their income in this profitable market. The 24-hour nature of forex trading allows you to earn money day and night. As one market closes, another one opens, and in some parts of the world, it goes on around the clock. 

As a new trader, you must be anxious about entering the forex market, but don't worry. We have outlined the best strategies for part-time traders you can pursue along with your full-time job.

Forex and Its History

The word "forex" is a combination of foreign currency and exchange. People buy one currency and then change it into another in the forex market for various purposes, such as commerce, travel, and trading.

Before the internet, forex trading was a challenging task for individual investors. Most traders were high-end businesses, multinational companies, and hedge funds, as they had more money.

A retail market for individual traders has developed with the aid of the internet, offering convenient access to the forex markets via banks or brokers, creating a secondary market.

What is the Forex Market?

The foreign exchange market is where currency trades between businesses. A currency is unique to its country. It allows us to buy and sell goods locally and abroad.

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As businesses expand worldwide, people require another country's currency to continue their trade. For example, if you're traveling to France but originally live in the UK, you will have to change British Pounds into Euros to be able to buy anything in France.

If you are living in the USA and want to buy a branded bag from Italy, you or the one who will import that bag will have to pay the Italian seller for the bag in euros. The importer from the USA will change the equivalent value of US dollars for euros.

Implication of Strategies

Now that you have started forex trading, you should add these simple habits into your routine:

• Dedicate a certain amount of fixed time

• Keep track of your forex trading

• Don't overthink; make quick yet rational decisions

• Be realistic about your goals

• Use your time wisely

• Learn from the loss you experience

The adrenaline rush and excitement forex trading bring in should be the drive for your trades and strategies. Always remember that if a method worked out for a successful trader doesn't mean it will work out for you.

The fluctuations of the forex market make it uncertain. Changes happen within minutes, and it won't always guarantee you profit. Here are some widely used forex market trading strategies that are effective for part-time traders:

Scalping

Scalping is a forex trading technique involving short-term buying and selling currency pairs. It's a technical analysis that relies on small, rapid price movements to create profits. Scalpers use special software to execute the trades, which can be done automatically or manually.

Scalping can be an effective way to make money as a part-time trader because it allows you to trade multiple times per day. However, it does take a lot of practice and discipline to master this strategy. Scalping can also be difficult because you must deal with slippage and tight spreads when trading on a Forex broker's platform.

Currency Pairs

A currency pair is the price quote corresponding to the two currencies' expected exchange rates. A currency pair is the foundation of every trade.

The time you decide on forex trading will help you choose which currency pairs to trade with. If you find the morning time best suited for you, then the London, Sydney, and Tokyo forex markets are your targets as they open up simultaneously.

Stop Loss Orders

As you know, forex trading brings a lot of uncertainties with it. Sometimes, you might buy a currency at a reasonable rate, but when it's time to sell it, you face a loss. However, it is part of the forex market and doesn't indicate your failure.

What you can do is set up a value for stop loss. Many traders use this strategy; they predict a value for their loss and prepare themselves for the future.

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Forex trading takes place through automation, that is, by machines. When you set up a stop loss value, your trading account will halt the trade, thus saving you money.

Key Takeaways

As a part-time trader, you know the prerequisites of how to trade forex. But there are some things you should keep in mind before proceeding to make a trade in the forex market:

• Choose your time wisely

• Make rational decisions

• Be realistic about your goals

• Use strategies that require less time but give more profit

• Use currency pairs that value best at the time of your trade

• Set up a stop loss value so your trading stops when it surpasses the specified amount of loss