One of the biggest mistakes that many Forex traders make is that they don’t treat their Forex trading like it’s a business. Instead, they treat it like a gambling addict instead of calm and calculating traders. If you want to succeed as a Forex trader, you have to think of it as a serious business, because it is indeed a very serious business.
I have mentioned this in my past education articles as well that forex trading should be treated as a serious business. To be a successful Forex trader, it is important that you treat trading like a business. It is unlikely that you could put £50 into a business and turn it into £20,000 in a short frame of time. You need to apply this same theory to Forex trading. One of the biggest reasons traders lose money is having an expectation of turning a small amount into very huge profit in a very small phase of time.
There are costs to being a forex trader, just like any other business. Your goal as a trader is to try and bring in more money through revenue (all winning trades) than you have going out through your costs. If you can do this, you will make a profit. However, if you let your costs (all losing trades) get out of control, eventually you will lose money and your trading business will go under (and one day you will blow out your trading account)
Here is a review of the steps you should take to start your forex business:
- Make a business plan.
- Choose regulated and reliable broker.
- Practice on a demo account and find suitable and profitable strategies.
- Start trading with small amounts until you are consistently profitable with real money.
- Gradually increase your trading size and the time you spend with trading.
- Always evaluate your performance and try to improve your trading.
- Find a method that gives you an edge over the market.
Last, not least, get informed to stay ahead of the crowds: this one is very important because like any other business once you become profitable the education does not stop there. The markets are changing and evolving all the time and like all good businesses, you must move with the times. Continually seeking further education and market knowledge will help you stay ahead of any changes to the market.
As I mentioned above, you will have to make sure your winning trades are more than offsetting all your trading costs if you want to be a profitable trader. So, there are basically two ways to accomplish this:
1) Aim to have winning trades that are significantly larger than your losing trades.
or
2) Have a very high percentage of winning trades compared to losing trades
For making a good trading plan for business you will need the following –
- Discipline
- Fibonacci levels
- Supply and Demand Levels
- Chart Patterns
- Trending Lines
- Correct Money Management
Trading requires hard work: treat trading like a serious business and it will reward you accordingly.
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Editors’ Picks
EUR/USD languishes near YTD low, just above mid-1.0400s on bullish USD
EUR/USD refreshes YTD low on Tuesday and is pressured by a combination of factors. Bets that further ECB rate hikes may be off the table continue to undermine the Euro. The Fed’s hawkish outlook pushes the USD to an 11-month top and contributes to the fall.
GBP/USD breaks below 1.2100 on USD strength
GBP/USD dropped below 1.2100 for the first time since March, driven by a stronger US Dollar. The DXY rose above 107.00, reaching new multi-month highs. The Greenback's strength is supported by higher yields and mixed market sentiment.
USD/JPY seeking 150.00 as US Dollar rises across the board
The USD/JPY is pushing into its highest prices in eleven months, driving towards the 150.00 major handle as the US Dollar (USD) catches a broad-market ride up the charts on souring investor appetite and risk-off flows piling into the safe haven USD.
Editors’ Picks
AUD/USD consolidates in multi-day lows near 0.6350 ahead of RBA rate decision
AUD/USD is consolidating its recent losses above the mid-0.6300s during the early Asian session on Tuesday. Traders prefer to wait on the sidelines ahead of the critical Reserve Bank of Australia (RBA) interest rate decision due to be announced at 3:30 GMT.
EUR/USD languishes near YTD low, just above mid-1.0400s on bullish USD
EUR/USD refreshes YTD low on Tuesday and is pressured by a combination of factors. Bets that further ECB rate hikes may be off the table continue to undermine the Euro. The Fed’s hawkish outlook pushes the USD to an 11-month top and contributes to the fall.
Gold remains depressed near multi-month low, just above $1,820 level
Gold continues losing ground for the seventh straight day and drops to a fresh multi-month trough. Hawkish Fed expectations, elevated US bond yields and bullish USD continue to weigh on the metal. A softer risk tone fails to lend support, though oversold conditions could help limit any further losses.
Bitcoin price macro outlook remains uncertain, analyst says
Bitcoin price is still not in the clear, according to analyst and trader Rekt Capital, who explores the price action on a macro perspective. It comes after the big crypto leaped almost 5%, testing the $28,600 levels before a retraction.
RBA Decision Preview: Australian central bank expected to hold interest rate steady for fourth straight time
The Reserve Bank of Australia (RBA) is on track to keep its key interest rate unchanged for the fourth straight time on Tuesday, in a meeting that will be the first one for Michele Bullock as the new central bank Governor.
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