Can You Trade Forex And Have A Day Job?

For many, working a full-time job is a non-negotiable part of life. Sustaining an existence, no matter how meager or lavish, often requires the dedication of most of our waking hours. Expenses such as rent, a mortgage, utilities, food and transportation are obligations that must be satisfied. While there are exceptions, meeting these challenges typically requires securing full-time employment, Monday through Friday.

Regardless of one's chosen profession, working hours typically represent a major portion of our lives. For those who secure employment in the financial markets, the scenario is certainly no different. However, the extent of time spent at work does vary depending upon location, culture and industry.

According to the Organisation for Economic Co-operation and Development (OECD), workers from various international locales put in very different hours:

Global Rank Country Average Working Hours Per Week
1 Mexico 42.85
6 Russia 38.17
8 Poland 36.98
15 Ireland 35.02
16 United States 34.40
24 United Kingdom 32.25
36 Germany 26.37

As a point of reference, there are only 168 hours in a 7-day week. Assuming eight hours a day for sleep and 40 hours a week dedicated to a full-time job, there remains 72 hours of "free" time. Of course, "free" is a largely subjective term, but even while working a full-time schedule, three complete days a week are uncommitted.

Therein lies one of the biggest advantages to trading currencies on the forex: flexibility. No matter where one lives, or what one does for a living, it is possible to trade the forex. The only prerequisites to trade on a full or part-time basis is desire, an internet connection, computing power and a broker. If you have these assets, then you can become a forex trader.

Forex Marketplace's Hours Of Operation

The foreign exchange market (forex) is an over-the-counter market (OTC) specialising in the exchange of foreign currencies. It is the world's largest market in terms of currency value traded, averaging in the neighborhood of US$5 trillion daily.

The forex is not a centralised marketplace; it is a conglomeration of individual regional markets, located around the world. The markets are integrated with one another electronically, thus trading is able to remain open 24 hours a day, 5 days a week. Sunday at 9 PM UTC cues market open, until it closes on Friday 8 PM UTC.

The forex trading day is broken up into four primary sessions: America, Asia, Europe and the Pacific. Each trading session provides a varying degree of market participation, based on the institutions, traders and investors actively involved in the market at that time.

Listed below are the world's prominent forex trading hubs and their trading day's most active hours (UTC):

City Open (UTC) Close (UTC)
New York 12 PM 9 PM
Tokyo 11 PM 8 AM
Sydney 9 PM 6 AM
London 7 AM 4 PM

With market participants actively engaging the forex from nearly every locale and time zone on the planet, trading opportunities can be found around the clock. Even if a substantial portion of your day is tied up with work responsibilities, it is still possible to trade the forex. A few ways that people accomplish this task is by automating a trading system, engaging in social trading or working with a full-service broker.

Favourable Market Conditions: Liquidity And Opportunity

Forex access is technically available on a 24/5 basis, but there are specific times and products that are conducive to profitable trading. Typically, traders prefer to enter and exit the market during periods of robust participation and market liquidity. Increased liquidity provides the pricing volatility and market efficiency necessary for the creation of optimal trading opportunities. When it comes to intraday and day trading, volatility and liquidity are premium market attributes.

Liquidity is an important factor in regards to minimising both slippage and the bid/ask spread. Without adequate volume or participation, having an order filled at a desirable price becomes a formidable task. Thinly traded markets often have considerable spreads, which also contribute to higher costs associated with market entry and exit.

In forex, periods of time where the regional trading sessions overlap one another produce heightened liquidity on a consistent basis. Listed below are the daily time frames where the regional sessions coincide (UTC):

  • New York and London 12 PM to 4 PM
  • Sydney and Tokyo 11 PM to 6 AM
  • London and Tokyo 7 AM to 8 AM

In addition to the time of day, the product being traded is a crucial part of market liquidity. The most frequently traded currency pairs on the forex are known as the "majors." Listed below are the major pairings, although periodic updates representing current trading volumes are possible:

While working a day job greatly reduces the ability for one to actively trade the premium time slots, knowing what and when to trade is a great place to begin. Developing a practical approach to the market, including concessions to one's schedule, is a big part of creating a sustainable trading plan.

What Is Day Trading?

Over the years, the media has both glamorised and demonised the financial markets and day traders. The coverage has led to many misconceptions regarding the profession. To be clear, a good day trade operation is not a get-rich-quick scheme nor nefarious―it is a way that driven, hard-working individuals can make money in the capital markets.

One of the great things about the forex market is that it is open on a 24/5 basis. The extended trading hours are ideal for those who work full-time, as there are opportunities outside of a standard work day. However, there are a few things needed to make money in this highly competitive trading venue.

Trading Strategy

In order to achieve long-run profitability trading forex, it's important to have a comprehensive trading strategy. Implementing sound strategy is even more important when engaging the market while working a day job.

A good forex strategy addresses three vital aspects of trade:

  • Analytics: A strong analytical base is needed to identify trade opportunities in the live market. This is done via fundamental analysis, technical analysis, or a combination of both.
  • Risk management: In forex, risk management is an essential aspect of competent trade. It formally quantifies the amount of capital being put in harm's way by defining applied leverage and stop loss location.
  • Position management: Open position management parameters direct how profits and losses are taken on each trade. Position management involves the trade's duration, profit expectations and acceptable loss.

Trading Skills

If you're going to make money in the forex, honing a few basic trading skills can certainly help. The following attributes are ideal for traders who are also gainfully employed:

  • Multitasking: It's imperative to be able to do two (or more!) things at once when working and trading. Checking in on an open position, or making trade-related decisions while at work may be necessary. Fortunately, smartphones and other mobile devices make trading on-the-go simple.
  • Positive Attitude: Maintaining a positive perspective is imperative. Taking a bad trade and loss can be difficult while dealing with the stress of a 40-hour work week. Being able to stay positive in the face of adversity is an invaluable trading skill.

Trading Account

Securing the services of a competent, reputable forex broker is essential to trading currencies. The broker facilitates all trader transactions through furnishing individuals with margin, market access and customer service. Without a trading account with a broker, it's impossible for retail traders to participate in the forex.

For those with a full-time job, brokers offer a suite of services designed to minimise the time needed to trade. Three of the most common are copy trading, broker-directed trading and automation. With these services, anyone can trade forex regardless of how many hours a week they spend at work.

Putting It All Together

Active trading can be an all-consuming endeavour. However, given the current technology and resources available to aspiring forex participants, one is able to engage the market on his or her own terms. The following options make forex trading possible for people with a jam-packed work schedule:

  • Broker-Assisted Trading: Many individuals who cannot fully dedicate themselves to forex trading utilise the services of a full-service broker. A full-service broker can provide expertise as well as execute trades on the client's behalf.
  • Automated Trading: Automated trade execution has become a popular way to trade forex without having to physically place orders upon the market. Software trading platforms are programmed with a strategy and execute it within the marketplace.
  • Trading Methodology: The disciplines of swing trading, intermediate and long-term investing require very little time in regards to the management of an open position. Due to the longer durations involved, decisions may be made at one's leisure.

It's important to realise that there are options for individuals who want to trade, but have limited time resources. Through the use of a full-service broker, automated trading or the selection of a more hands-off style, a full-time employee may engage and succeed in the forex.

FXCM Research Team

FXCM Research Team consists of a number of FXCM's Market and Product Specialists.

Articles published by FXCM Research Team generally have numerous contributors and aim to provide general Educational and Informative content on Market News and Products.

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