If you’ve ever researched ways to earn more money, trading would inevitably have been one of the top suggestions on the list. A potentially lucrative option, this type of work can offer a whole new career for anyone who chooses to pursue it with determination.
However, many investors don’t want to rely on the volatile world of trading, instead preferring to keep it as a hobby. In fact, when looking at trading and spread betting for new beginners, this is a far more realistic option, allowing you to learn the market without any pressure.
It is entirely possible to learn this job role without committing fully to a career in the markets. Keeping spread betting and trading as a hobby can work very well, providing you do your homework in advance. Here’s what you need to know.
Part-Time Trading Isn’t A Casual Thing
If you are only trading as a hobby, you need to make sure your mindset isn’t the thing that lets you down. Even if you aren’t relying on your trading income to pay the bills, if you don’t take it seriously, you might as well be playing the lottery.
Hobby traders only work the markets part-time. There’s nothing wrong with this, and in fact, many experts recommend this as the best way for most people to start trading. However, being a hobby trader doesn’t mean that you open positions casually and only dip in and out sporadically.
While you might have less time to commit as a hobby trader, you still need to make sure you’ve been keeping up with market movement and sentiment. A casual or lackluster approach to your market research will show in the results you get.
Opt for Day Trading
If you’re only a hobby trader, some pros may tell you that day trading is out of the question because it takes up too much time. Although this is true, if you’re smart, you may still be able to take part in day trading without a considerable investment of your time.
Day trading refers to trades that aren’t kept open overnight. To get the best of the market in day trading, you need to be ready and waiting when the market opens and preferably when it closes too. You only need 15-30 minutes at open and close to make the trades with the best potential.
By opting for day trading, you could find you get returns that are higher than you think. By focusing on the most productive part of the day and eliminating the long periods sat around waiting, the gains made compared to the time invested are significant.
The forex market is incredibly volatile and can offer rich rewards if you have a winning strategy. The other benefit is that it’s open 24 hours a day, making it accessible to traders who have to work 9-5 pm.
Forex involves trading in currency pairs, and it allows you to choose the pairing you want to trade. Different pairs will have greater activity at differing times of the day so you can pick the pair which are the most active at a convenient time.
You can be a successful hobby trader, providing you’re not expecting to earn millions by the end of your first week. Choose your trades carefully and have a clear strategy, and you could end up enjoying great returns.