How to Trade Part-Time While Working Full-Time
I’m going to say it upfront - please do not quit your job to day trade right away. Keep your job and grow your small account slowly by trading following these 3 important steps:
In this blog, I'm going to talk about how I traded part time, while working a full time job. Not only am I going to talk about the specific trading strategies I personally used, but most importantly, how to manage your time, prepare yourself financially, mentally and properly allocate enough effort to build your small account from trading part time.
When's the best time to trade stocks as a part time trader with a 9 to 5 job?
Let’s talk about time. At the end of the day, we all have the same 24 hours. If you want to squeeze in an extra 2 hours to trade before going to work, or 30 min before the market closes, it all comes down to very meticulous time management.
What I did as a trader living on the Pacific West coast time zone was wake up at 5am, which is 8am market time. I didn’t really trade during pre market hours because I didn't know how. Then I'd spend around 5am to 6:15am creating my watchlist. I didn't have any fancy scanners back then. So I used Finviz, Stock Market Watch, and Stockcharts.com for my free research resources and Thinkorswim premarket gap up scanner to find the daily gappers.
Then I'd trade from 6:30am to about 8am focusing on some long strategies specifically at the open. What’s so great about trading the open at the first 30 minutes is that you almost always get immediate price movement on the premarket gappers. Whether you are a long or short biased trader, the opening 30 minutes to an hour is where you get to make the quick trades and be done for the day and you can head out to work. Note I said quick not easy.
During the day while at work, I did check on the overall market once a while, but generally speaking, I did not trade while at work. Even if I do, it's just closing the rest of the position that I had already entered from the morning. Usually that's if I was trading mid cap and large cap stocks.
Whether you want to manage your positions full size on your desktop or on your phone while at work, that’s entirely your own decision of course. Of course, besides trading the first hour of the open, I also tried to find time in the last hour before the market closes, which would be what we call power hour from 3pm to 4pm eastern time. And for me, that would be around 12pm to 1pm lunch time for me at work. And yes, that means I had to say goodbye to socializing with coworkers at lunch and the amazing lunchtime yoga or gym sessions. But that's just the kind of sacrifice you might have to make.
During power hour, I actually don’t actively day trade. Most of the time I spend the hour looking for stocks that are closing strong on the day and holding daily key levels. And I would sometimes look to take a swing position overnight. I rarely day trade during the power hour.
The work doesn't stop there when the market closes. If you haven’t noticed by now, this trading part time, while working a full time job concept, actually requires full time effort.
At the end of the day after getting home around 7:30pm to 8:00pm. I would still spend about 2 hours before going to bed researching the key gainers on the day.
The truth is, 90% of the work in day trading happens outside of regular market hours, and definitely before you even enter a position. It's the preparation you put into your trades either premarket, afterhours, or before bed, that's going to give you better chances of making it in this game.
Yes, doing all of that still does not guarantee you 100% success rate in making that profit. but the odds are definitely better than waking up 30 minutes before the open and stumbling straight to my computer and getting ready to follow chat room alerts.
Because I'm being real here, trading is not a hobby. It's a business, you are essentially starting a part time business that requires full time effort, while you’re working your 9-5 job, well in my case it was more like a 9-7 job, and sometimes even 6 days a week too.
So if I could do it, while maintaining only 10% of my sanity, 50% of my normal sleep schedule, and 30% of my personal relationships. You definitely can too!
Use range orders/ bracket orders/ OCO orders when trading.
Now the second thing that’s extremely beneficial when you are trading while working a ful ltime job is utilizing range orders or bracket conditional orders on your broker platforms.
So let’s say you want to enter this stock CPAH at $2. Because you see that it’s reclaiming a key daily level and broke the downtrend intraday. But you want to make sure while you are away, you get to sell if the stock goes in your direction, and cut the loss small if it doesn't.
So the solution is, you can use range orders, or bracket orders that allow you to attach both stop losses and take profit orders once you enter a position. once your buy order gets triggered. You can attach a stop loss market order at let’s say $1.84, and a sell limit order at $2.5.
That means you intend on risking 16 cents to make 50 cents. That's a good risk reward. And one of the two attached orders will trigger, and once one triggers the other will cancel. So in this example, your take profit sell limit order at $2.5 will get hit. You made your 50 cents, and your stop loss market order at 1.84 would be canceled automatically.
That’s something I used on mid cap and large cap stocks, not penny stocks. When I was slowly building up my small account, I preferred to trade these higher priced stocks and higher market cap stocks because there’s almost always volume in them when there is a catalyst. And they are a lot less volatile than these low float penny stocks.
Most brokers out there have these order types available for you. TD thinkorswim, Interactive brokers and Trader zero all offer those order types.
Keep your job! Make sure to have financial stability.
Now the third important factor to understand when you’re trading part time and working your full time job is to and keep your job. Contrary to what the lifestyle marketing around this whole day trading industry tells you, quitting your job altogether to day trade is really not as glamorous or as easy as it seems.
Because let’s be real here, you can spend 8 hours a day trading in front of the computer, but you are not guaranteed a paycheck, you can even lose money too. But that 9-5 job you go to everyday is not going to cost you money right? Just costing you time. Having that stable income that you can count on will provide you the mental comfort to take trading slow and allow yourself more time to learn about yourself as a trader.
Keeping your job or multiple jobs will allow you to not be so attached to the money that you’re trading. It’s unfortunate but losing money is part of the business in trading. It's evitable. The key is to control your losses and keep them small.
The only way you can cut your losses small, is if you are not attached to the money, because you have your full time job, or jobs, to pay your rent, your food, and provide for your kids or family.
I read this amazing quote from this trader/ business man on twitter, and I'm never going to forget it. Learning to trade means living a few years of your life most people won't, so that you can live the rest of your life like most people can't.
Like I mentioned earlier, It all comes down to sacrifices. Do you want this bad enough? Maybe it means partying a little less on weekends. Eating out only once or twice a week, sleeping only six hours a day and keeping only one boyfriend. Or just, none at all.
Of course, if everything I just talked about sounds like too much effort and too much time, there's still hope. My answer to that, chat room alerts baby. Takes only 2 minutes to make millions. Works well 100%, 1% of the time.
