What comes to your mind when you hear or think about forex trading? What makes you wake up every day to open the markets and initiate positions? Is it the excitement that comes with the ever volatile currency markets where 5.3 trillion dollars is traded every day, or is it the short-term gratification that comes with winning small moves in the market? Probably, it might be the applauses you get from your friends and family on how much of a ‘Financial markets expert you.’
I have highlighted the above questions, not to judge but to get your attention on some of the major reasons why you probably haven’t been able to make money consistently from trading the markets, or why you have lost more money than you had invested in trading the forex markets. In fact, I personally fell prey to some of the above effects when I was starting my career 9 years ago, so it is about the right time for you to stay woke and approach trading as a business and as a profession.
Let’s ponder on some life realities for a minute, before I move on to the ‘meat’ of this article. It is common knowledge that engineers, doctors, and lawyers need to attend school for quite a number of years, ranging from 4 to 7 years, before they are expected to be professionals and earn a living. Soccer and basketball players start playing in their lower grades, then proceed to play in college, before they are finally enrolled to play professionally in competitive clubs. Then the obvious question is, Why should traders think they are any different?? Why do traders think they can be professionals and make a fortune from trading the markets after reading a couple of articles and demo trading for a few weeks?? I promised myself that I would rather tell the hard nock truth, get few followers or mentees, than preach the easy gospel of easy money making from trading the markets that is not real. Furthermore, any professional trader will out rightly tell you that trading the markets is one of the most tactical careers you’ll ever undertake, and if you don’t follow the disciplines and the rules, you’ll end up living a frustrated life. Sounds harsh, right? But is it not a common ideal in life, where you have to do your research, weigh your chances, and do a SWOT analysis before getting into any business, job, or venture.
Trading the forex markets as a business requires several key disciplines that come with proper education and practicing trading on live markets. One of the most important elements of professional trading is risk/money management. Learning proper risk/money management skills is paramount in successful trading as a business. Traders learn on how much percentage of their capital they should risk on a single trade. Money management is the only discipline that guarantees traders of the survival and their ability to catch the next opportunity in the market. It allows capital preservation in that you control your risk per trade, thereby preserving your bigger capital to enable you catch the next market moves.
Attaining the right Trader Psychology is equally important in trading as a business. Once you begin your trading career you will soon realize that emotions are involved in trading, especially if it is your real money on the line, and sometimes you have to watch as you get a loss on your capital in the market. If you are among the group of traders that can’t catch some sleep watching your traders overnight, or you can’t leave your computer due to fear of losing, then your money management and trader psychology are in question, and you desperately need to change your trading habits. This can only be achieved by accessing proper trading education like the training we offer here at Fourthstreet Consultants or any other reputable forex courses.
Thirdly, trading as a business requires one to keep their record of trading activities. This means recording their point of entry, the size of their trades (lot sizes), their predetermined stop losses, and take profits, exit points, and the outcome of the trade. Traders are able to do this by using a trading Journal. This way they can track their performance and note their weakness thereby growing holistically in their trading career.
Last but not the least, trading as a business calls for traders to have an in-depth knowledge of trading strategies, understand daily market movements, and chart patterns. People who wish to venture into online trading need to invest in getting education on price action, and how to study and analyze the forex markets, in order to trade profitable, and to join the winning team of high probability traders. Such skills, disciplines, and trading strategies for new and existing traders can be achieved from our comprehensive Price action course that we offer at FourthStreet Consultants. Those who sign up with our course get mentorship from our team of professional and experienced traders who offer Consultation on phone, email, and physical meetings at our offices every day of the week. I wish you happy trading, and that you learn to approach trading as a business.