It can be difficult to successfully pull off online options trading when you have another job to do. Even though electronic markets trade around the clock, and this is a decent side hustle in your spare time, this doesn’t mean that the time you’re able to dedicate to trading is the correct time to act. Your opportunity window to act is small when you consider that you must analyze the market thoroughly to make the best decisions and investments.
We want to discuss the idea that you can effectively trade options online in addition to your regular job, but it requires effective time management on your part. Keep reading to learn about the best and most practical time management tips that help you become a robust part-time trader. The tips and tricks we’re going to share are sure to maximize your trading efficiency and effectiveness!
Understanding the Unique Challenges of Part-Time Trading
What are the biggest challenges standing in your way to becoming a successful part-time trader? There are plenty, and it’s these common challenges that differentiate good options traders from those who struggle severely with the process. If you learn nothing else, know that options trading is a long game and requires patience, as well as being okay with the ups and downs that are all a part of the experience.
Limited Time
The amount of time you have to work with could dictate what trading goals are the most realistic for you. The key is to never put yourself in a position where you’re getting into hot water at work because you’re overextended in your part-time trading, but it’s equally important not to neglect your trading to the point where it’s not even worth your time.
If your regular job doesn’t give you much time for online options trading, the best approach might be short-term trades that don’t involve a high volume of pairs.
Preparation and analysis are critical to your success, so you must dedicate a certain amount of your free time toward that if you want to get your trades right. If your time is already limited, focus on short-term trades so you have the time to do the analysis and prep work necessary for a good portfolio.
Another good route for part-time traders who cannot dedicate much time to the process is to embrace longer-term technical or fundamental plays where you don’t have to keep your eye on the market every second. You can make some big moves like taking profits and stops where you’re not risking a lot, but you can keep track of what’s going on over a longer period much more manageably with your limited time.
If you have plenty of extra downtime from work, you might adapt a long-term strategy similar to the one we just discussed but invest and trade a wider range of currencies through a diverse portfolio. You have the time to focus on different avenues and do the proper research needed to produce the best yield. The general rule of thumb in trading is that the more time you can commit to it, the better your skills will become and the more success you’ll find in your trading endeavors.
Market Hours
Many brokers and exchanges have after-hours or overnight trading sessions that allow traders to engage with the market during hours that work best around their primary jobs and other work commitments. However, some online brokers don’t support trading after hours, so part-time traders come up against the challenge of working their regular jobs and having enough time to make online trades within the specified hours. Not only can this conflict with your work, but it can also cause conflict with other time commitments.
Preparation and Analysis
We cannot stress enough how important it is to prioritize research, analysis, and trade planning when using online broker apps or websites. Your trades must be founded on solid research and analysis. Otherwise, there’s no point in trading because your choices aren’t well-informed. So, not only does your trading time involve figuring out which trades you want to conduct, but you must also set aside time for proper preparation to make the experience worthwhile.
Prioritizing Your Time
How can you best prioritize your time to make the best online trades possible? Not only is it important to set up short-term and long-term goals for yourself, but it’s also important not to overdo it with online trading and still dedicate your time to family, friends, and other commitments! Learn how to effectively prioritize time for trading, and so do where you can achieve a good balance between your work, trading, and personal life.
Set Clear Goals
In online trading, setting clear, realistic goals for yourself is important. This applies to both new traders and seasoned professionals who know what they’re doing. You can get into trouble if you don’t focus on realistic goals because you can get into aimless trading decisions, or you could overextend yourself and get swamped in the number of trades you have going at once.
You may be brand new to trading. You may have intermediate experience. You know the ropes and have been trading for many years. No matter what your skill level, a good set of clear goals that would benefit any trader include the following:
- Make time for commitments outside trading (friends, loved ones, etc.)
- Expect losses due to risk and the law of probabilities
- Design your trades around market momentum
- Adjust the volume of trades around the time you can commit to online trading
- Don’t overextend yourself-focus on quality over quantity
- Keep track of your trades for future reference
- Set up a trading budget—don’t spend money you can’t afford to lose.
Defining exactly what you want to achieve with your part-time trading experience is critical. Setting realistic goals based on the money, knowledge, and time you have to dedicate to your trading sessions will keep you in a logical frame of mind and produce the best possible results.
Setting goals can help traders measure their progress over time to see where the strengths and weaknesses of their strategy lie. This can help them enjoy consistent performance and long-term sustainability in the market and a sense of purpose and direction in their trading journey.
Short-Term vs. Long-Term Goals
Know the difference between realistic short-term goals and realistic long-term goals. For instance, a short-term goal might be attaining a consistent gain daily, while a long-term goal could be strong annual portfolio growth. Once you’ve identified which goals are short-term or long-term, you can better cater a personalized strategy around each one of these goals to see them through!
Short-Term Strategies
- Day Trading: Traders don’t carry any positions over time using the day trading strategy. All instruments bought and sold throughout the day are closed out by the end of the traditional business day. Day traders can access price data and review the previous day’s information to analyze highs and lows with each position to spot potential trends.
- Scalping: This short-term strategy involved traders entering and exiting positions within minutes or even seconds. The technique has been proven to yield traders a substantial profit, considering how quickly these trades can occur. It’s a popular approach when dealing with commodities and forex markets. A lot of attention is paid to technical analysis and price action.
- Swing Trading: This strategy involves traders holding onto a position for several days or weeks to see if a potential profit is coming up. During that time, traders experience the highs and lows the asset’s prices experience through swings in the market. Most traders use this short-term strategy on stocks, and there’s quite a bit of technical and fundamental analysis that goes into swing trading.
- Trend Trading: Using this approach, traders watch the price charts to focus on trends that appear in minutes, hours, or days on the asset they purchased. If they sense an upward trend, they typically buy while they sell a downward-trending asset. The expectation is that the asset’s price will continue on its expected course and not reverse for the time the trader has that position open.
Not only are short-term trading opportunities best for those working with limited time, but traders can use tools like moving averages, a relative strength index, and a stochastic oscillator to pinpoint positions that will work best for their short-term trading strategy!
Identify Peak Trading Times
The general rule of thumb with online trading is that the best trading hours occur after the market opens (9:30 AM to 12:00 PM EST) and the last hour before the market closes at 4:00 PM EST (3:00-4:00 PM). We bring this up because these are the prime times for using a short-term trading strategy. During these periods, the market is much more liquid and volatile. If you’re a day trader or trading part-time in your off hours, there’s the best time to strike as the market volume and prices go wild!
While the most significant moves in the shortest time typically occur within that two-and-a-half hour window following the market opening, some of the biggest trades of the day occur within the first 15 minutes of the opening bell, where you can find some prime positions based on initial trends. The last hour before close is characterized by big moves and sharp reversals as the volatility and volume increase again.
If you’re new to online trading, a good move is to place trades and obtain positions during the calmest part of the trading day, which is the period between 12:00 PM and 3:00 PM. While many advanced and more experienced traders are waiting around to get further news and to see what the market will do next, this can be the best time for a beginner to make their move, while the action is slower, and the returns are far more predictable.
Allocate Time for Key Activities
In online options trading, it’s important to do the necessary research and analysis to make the best choices during your trading session. You must allocate a portion of your time to crucial moments in the day, such as pre-market preparation and post-market review—it’s the only way to learn about the factors that affect market movement and track your progress.
Pre-Market Preparation
Because the market offers some of the best short-term trading opportunities in the first couple of hours after the market opens, it’s key to do some initial prep so you can hit the ground running. If you don’t have a job where you must be working or on your way to work by 9:30 AM EST, we recommend pre-season preparation into your part-time trading routine.
Note: You can read more about the finer details of a morning routine for part-time traders in the “Morning Routine” section.
Post-Market Review
Just as pre-market preparation can get you properly adjusted for the trading day that awaits you, there are several beneficial routines during the post-market hours that any good trader should work into their schedule. If you aren’t working your regular job after 4:00 PM EST, we’d recommend working a daily trading debrief into your schedule following the market close. A good post-market analysis and review will partially help you prepare for the next trading day!
Note: Learn more about what comes with an evening routine for part-time traders following the market closing in the “Evening Routine” section.
Efficient Trading Strategies for Limited Time
If you don’t have enough time on your hands to make full-time trading a reality in your life, you can use the following strategies to trade on a part-time basis and work it around your regular work and obligations. The key ideas here are zeroing in on high-probability setups, embracing swing trading, and harnessing the power of in-app alerts or automation to your advantage.
Focus on High-Probability Setups
In part-time trading, your best bet is to focus on trades with high-probability setups. These trades hinge on the direction of the overall market trends, essentially whether the market is bullish or bearish. Optimum conditions are higher market volatility and higher liquidity. More volatility means larger swings in position prices, which could increase your profit potential. Higher liquidity means your traders can easily enter and exit quickly, ideal for part-time trading!
The idea behind focusing on high-probability setups is to trade only the most promising opportunities. This strategy works well for part-time traders as long as they do the necessary research and prep work for each session.
Swing Trading vs. Day Trading
While many might consider day trading the perfect solution for part-time traders who work another job, there’s another path that’s more ideal and much more suited to people who can’t monitor the market constantly. It’s called swing trading, which involves holding onto a position for several days or weeks to gauge profitability. On the other hand, day traders don’t hold any positions overnight.
Swing Trading | Day Trading |
|---|---|
– Traders hold a position overnight, for an extended period of time like several days or weeks. | – Day traders don’t hold positions overnight. |
Day trading requires a lot more attention than swing trading. We ultimately recommend that those with full-time jobs who are trying to work a part-time trading routine into their lives use the swing trading technique because you can sit on positions, ride the highs and lows, and determine value based on long-term trends. All of this can be done by watching the market from a distance instead of watching it like a hawk.
Use of Alerts and Automation
Good online trading involves great timing, so you can take advantage of opportunities when they present themselves. Many trading platforms offer helpful tools to keep track of what’s happening with specific securities and positions to ensure you never miss out. Alerts and automation are two key features of online broker apps or websites that let traders stay on top of the action and make quick decisions when the market pricing gets volatile.
Setting Alerts
Many broker apps allow traders to set alerts for key price levels or market conditions. This can be especially helpful for part-time traders who are juggling trading with a job, family, or other obligations. They don’t have to keep a close eye on the market at all times—they can simply set up an alert that essentially gives them a heads-up that it’s time to act on a specific security or position.
Automated Orders
Part-time traders can also use automated ordering systems to automatically apply stop-loss or take-profit commands to their current positions in the event that they cannot access their desktop computer, smartphone, or tablet to check the market. Automated orders make it possible to do the business that needs to be done without continually checking the market!
Daily and Weekly Routines
Maintaining your regular job and obligations can be difficult while trying to incorporate a part-time trading routine into the mix. We cannot speak on how you need to manage your personal or work life, but we do have a few ideas on how to structure your daily or weekly trading routine so that you can integrate online trading into your current life arrangement.
Morning Routine
Every trader’s morning routine before the market officially opens at 9:30 AM EST will look different, but we’d be remiss if we didn’t hit all the primary actions you could be taking in these early morning hours. We’ll highlight several important things you can review in preparation for your upcoming trading session. Choose what you want to implement, but we’d suggest working as many of these actions into your routine for the best possible results.
- Gauge support or resistance for the upcoming day by viewing index futures. These are the highs and lows of futures from the previous day or overnight sessions. Index futures are printed by the NASDAQ 100, S&P 500, and Russell 2000 Index.
- Adjust the aggressiveness of your strategy for the day based on your pre-market analysis.
- Check the pre-market to see where index futures or underlying futures are trading.
- View open positions to find out where your competitors’ money is sitting.
- Filter through and analyze news on open positions to gauge where you should make your first moves. Keenly monitor the key levels of these open positions.
- Read up on news in the world markets for indicators of how they could shake up the day’s action in the US markets. Stay informed as much as you can!
- If you have open positions you kept overnight, you can take the pre-market time to exit them if the momentum isn’t on your side. This helps establish the relationship between the last closing prints and the expected opening prints.
- Use deep order limits to your advantage during the pre-market hours. They are much easier to fill during this time. Place order limits on securities you’d like to own, but don’t use the current prices.
Market News
Allocate a few minutes to catch up on the latest market news and events. In many cases, global markets can be a significant indicator of how the US market will perform, so it’s best to find out what’s happening in the news. You can check websites like Google News or AP News to gather your financial data, download a news ticker to your computer with running news updates, or keep in the loop through financial podcasts that talk about the markets with more nuance and insights.
Social media is another good place to check out markets—you can hear what professional traders or industry professionals discuss. You can position yourself in a way informed by seasoned traders’ insights.
Review Watchlist
Develop a well-organized watchlist of securities (potential trading or investment opportunities) and keep it updated during your morning routine. In the early hours of the day, you can view your watch list for the best potential trades, track your portfolio’s overall performance, and keep an eye on the hottest and most popular stocks. This is why it’s important to keep an eye on the news and find out where the market leaders are investing—get familiar with the hottest stocks and add them to your watchlist so you never miss a beat!
Set Alerts
Another helpful tool for keeping updated on market news is setting up alerts from your preferred news sources or websites on your desktop computer, mobile device, or wherever you’re trading from. It’s excellent for getting timely information to inform the day’s strategy.
Multiple services can set up alerts and alarms for specific stocks or positions you’re interested in spring on. These alerts can be sent via email, text, push notifications, or call alerts. You can get advanced notice on opportunities for improving your portfolio, complete with prime entry and exit points! For best results with these timely notifications, set up any necessary alerts before the market opens—work it into your morning routine before the market opens.
During Market Hours
How you spend your time during market hours comes down to your trading skill level. We mentioned earlier that advanced traders dealing in high volume are more active between 9:30 AM and 12:00 PM EST, especially in the first 15 minutes when positions are far more volatile and liquid. If this describes you, you’ll want to do your main trading during this period to capitalize on major price shifts.
Newer traders might not be ready yet to fight the crowd following the market open and successfully take the positions they want at the right price. The market is calmest between 12:00 PM and 3:00 PM, and although you won’t get the prime opportunities that advanced traders can during these afternoon hours, it’s a good time to practice trades as the returns are much more predictable.
Time Blocking
Advanced traders will focus their time and attention on trading during the first two-and-a-half hours following the market opening and then in the last hour before it closes. They will use that slower afternoon period to check trades and market conditions to inform their decisions for that last rush at the end of the day.
As a part-time trader, your time blocking will differ from that of those who trade as their primary profession. If you’re using short-term trading strategies, some don’t even involve you keeping a super close eye on the market. In many cases, you can hold positions overnight for as long as needed to gauge momentum.
After going through your pre-market preparation ritual and making your first moves in the first hour, you might briefly look at the market sometime in the afternoon during a lunch break or downtime at work. Even if it’s only a few times during the lazy period in the afternoon when activity has died down, it’s best to check the market to see where the leaders are sitting and where the momentum is shifting with your positions. This will give you clues on whether to hold onto your position or sell it off.
Mobile Trading
If you find yourself away from your desktop computer during the day, it’s important to stay on top of what’s going on in the market through the help of online trading apps, which help you conduct your business on the go. Most modern online brokers offer a website version of their service as well as a free-to-download mobile app from Google Play and the App Store.
Evening Routine
Your “evening routine” can take place any time following the market’s close at 4:00 PM EST. Traders have until 9:30 AM EST until the market opens back up, though there are extended and night hours using a variety of online broker websites and apps, where you can enjoy the privilege of 24-hour trading.
However, in between traditional trading hours, we’d encourage anyone to employ the following ritual as a way to close out that day’s trading session:
- Take some time to reflect on what you learned from your session and how you can better yourself the following day.
- Review the effectiveness of your trades and how you executed each one during your session. Discover which aligned with your day’s strategy and which weren’t so successful.
- Check growth stocks to see which ones are leading and whether it’s due to distribution or accumulation. Based on these leaders, adjust your portfolio.
- Analyze your win/loss ratio for the day. If there were moments in your session where you let irrational thinking dictate your decisions, make a note of it.
- Consider the market leaders and their performance for that day. Based on the seasoned professionals’ decisions, you can pinpoint possible market trends.
- Find out which positions are gaining or losing as well as the reason behind it. This can help you establish possible trends for the next day.
- Analyze any unexpected shifts in the market and times when there was surprising price action.
- Consider the current market conditions and if your exposure level is proportionate with your risk tolerance.
- Take the time to adjust any stop-losses using automated orders.
- Clearly define the best stocks for tomorrow’s session and develop entry, stop-loss, and exit levels for each.
Review Trades
Spending time analyzing the day’s trades and performance can help you discover what you’re doing right and what areas you could improve in. Traders can learn how their strategy served their goals well but also places in the strategy where their sessions were stagnant or took a turn for the worse. A good indicator of your strategy serving you well lies in the win-to-loss ratio. Once you’ve pinpointed where the losses began, you can figure out where the lousy decision-making began (lack of research, emotional trading, etc.) and develop a stronger approach to improve the next session.
Keeping track of your wins and losses on your trading app serves as a detailed trading journal where you can track progress, identify areas for improvement, and develop a better strategy for meeting your goals. Tracking your progress gives you a clear picture of what works well based on your portfolio’s performance.
Plan for Tomorrow
In preparation for the next trading day, you can read up on the news to determine hot stocks, positions, or securities and add them to your personal watchlists—keep an eye on these occasionally through the evening in your free time and incorporate them into your pre-market morning routine.
Following the market close, it’s a good idea to set up any alerts or automated orders you want to be executed during your off hours. For positions you wish to sell, you can set up a “stop-loss” command and keep any positions you want to maintain for the time using the “take-profit” order. Traders can adjust their alerts to keep on top of big developments in the market or when particular price points come up on their watchlist. This will help them act quickly during the evening or the following day!
Balancing Trading with Other Responsibilities
Part-time trading can be a great addition to someone’s life, be it an avenue for making some extra money or a fun habit that lets the trader experiment with different strategies to produce desired results. However, trading shouldn’t become an all-consuming activity that draws away from the other pleasures of life or, worse, interferes with current duties and responsibilities. To learn about balancing part-time trading with work, family, and home life, you won’t want to skip the next section, where we outline these lifestyle techniques that make room for this activity in your life.
Efficient Work Habits
You can implement several productivity techniques at work to ensure you stay on task and leave enough time in your day to focus on part-time trading. However, we’d like to cover one helpful strategy for great time management at work: the Pomodoro Technique.
The Pomodoro Technique was developed in the 1980s—it involves breaking work into 25-minute intervals and taking short breaks in between. It can be explained in six easy steps:
Pomodoro Steps
- Decide on the task to be done.
- Set a timer for 25 minutes.
- Work on the task at hand.
- When the timer rings, it’s time to take a short break, between 5 and 10 minutes.
- Repeat Steps 2, 3, and 4 until you’ve completed four 25-minute work sessions followed by four 5-10 minute breaks.
- After four repetitions, take a longer break (20 to 30 minutes). Once this longer break is over, go back to Step 2 and complete four more work sessions and four more shorter breaks.
Delegating and Outsourcing
If there are areas of your job or profession where you can pay someone else to complete your tasks or obligations, we’d recommend doing so to free up even more time to focus on your part-time trading sessions. Trading could help you immensely with your finances, so it’s essential to prioritize what you have going on in your life and eliminate tasks that are non-essential to your personal self-improvement goals or financial well-being.
Family and Personal Time
Trading can be fun, and as you get more savvy with how it works, it can be pretty lucrative, but don’t forget to have a happy life, too. Spend time with the people you love the most, like friends and family. Don’t let your interest in trading trump the time you could be with your spouse, children, friends, relatives, or community. Develop a healthy work-life balance by allocating time for home and your social life while arranging your part-time trading schedule around that.
Continuous Learning and Improvement
There’s no limit to what you can learn as an online trader. Even advanced traders with years of experience still encounter new scenarios and challenges that force them to adapt creatively, which teaches them new tricks and techniques for finding success. But experience doesn’t have to be your sole teacher. Plenty of educational resources can help you develop a sound part-time trading ritual that you can work into your current schedule, provided you have the time, and you’re not spread terribly thin!
Educational Resources
You might have a busy schedule and limited time to learn about options trading before developing a part-time trading routine and incorporating it into your life. This is when you’ll want to focus on education resources that are easy to digest, ones that aren’t a huge time commitment. These could include:
- Podcasts
- How-To Videos (YouTube)
- Short Online Articles
- Online Forums or Discussions
- Reddit Posts
- Social Media
You can fit part-time trading learning into a busy schedule using these short but focused educational resources. For more advanced teaching and courses on options training, you might have to commit time to learn higher-level techniques and strategies from some professionals during your weekend.
Weekend Learning
Suppose you have a basic learning of options trading and want to take things to the next level and develop into an intermediate or advanced trader. In that case, you might dedicate some time on weekends for in-depth learning and strategy development, like online courses or seminars where you’re taught by those with vast experience in the industry. While you might be committing more time than you’re comfortable with, the learning you can get on the weekends could pay dividends because your trading abilities will be much better! It’s something to truly consider.
Join Trading Communities
If you don’t want to commit the entire weekend to taking a course or class, a good option would be to participate in online forums or trading groups. You can stay updated and share experiences with other part-time traders who can share their wisdom and experiences with you. They might not reveal all their special secrets, but they can give you a greater understanding of the basic concepts that higher-level traders employ daily when the market is open!
Become a Part-Time Trader—It’s Easier Than Ever Before!
Part-time trading online can be a big commitment, but there’s never been a better time to integrate a part-time trading routine into your life, even if you have a regular job and other obligations. Mobile trading apps, with their automated orders, robust watchlists, and customized alerts to keep you updated on breaking news and trends, make it much easier to balance your work and personal life with an exciting part-time trading regimen.
However, there are plenty of disciplines that part-time traders must develop to become successful, including:
- Implementing a morning, market hours, and evening routine
- Setting clear trading goals
- Allocating time for work and other responsibilities
- Developing short-term and long-term trading strategies
- Keep track of all trades to find areas for improvement
Becoming a successful part-time trader is entirely doable, and it’s all within your power and control to integrate seamlessly into your daily routine. It comes down to implementing the tips we’ve discussed and developing a personalized time management plan. There are some things we missed in our review. We’d encourage any of our readers to share their time management tips and experiences in the comments section below. We’d love to hear your feedback on this so we can continually improve the content we offer!
