I often hear that at least 90% of traders don't make money (are not consistently profitable), many find this statistic astonishing... I am not surprised at all! Before I became a currency trader I was an accountant, I have seen numerous businesses come and go, some businesses going 'bust' or running out of cash within the first 12 months of business operation. How could this happen? In this post I will share with you my ultimate Forex trading tips and compare my experience with accounting for businesses with that of Forex trading.
Running a Business and Forex Trading - Is there a comparison?
Forex Trading Tip #1 - If you Fail to Plan, you Plan to Fail
When you start a business it is tempting to let your excitement (and sometimes lack of patience) get the best of you. Many dive straight into purchasing stock, equipment, office space, company stationary, logo design and many more 'necessary' business items. Though this is exciting and businesses want to create a brand, business owners do this without having any plan. They don't know how much cash they will need to 'stay afloat', they haven't researched the competition and some don't even know there profit and sales margins! Forex traders often make this same mistake, they dive into trading without a plan. A trading plan should be a document that details how you are going to make money from the markets, it should include detailed research, back tested results and written specifics about your trading edge and trading strategy. Businesses that don't have a business plan will likely fail. Forex traders that don't have a trading plan will likely fail.
Forex Trading Tip #2 - Get yourself a Mentor (Don't skip this tip!)
The successful businesses that I have worked with usually have a business owner who had or still has a mentor. To become successful in any venture it is extremely useful to learn from someone who is already experiencing success. What are they doing? What do they know? Why are they successful whilst others are failing? These same principles apply to forex trading, I could have saved myself a ton of cash and time if I learnt from someone already profitable. A genuine Forex Trading Mentor is what most traders need, don't be stubborn, be submissive and learn from those who can do what you want to do.
Forex Trading Tip #3 - You Need to Want it Enough
Don't get me wrong, most business owners are distraught when their business fail and some businesses fail to completely unforseen circumstances but the truth is many business owners didn't want success enough. If they did why didn't they plan better? Why didn't they know there was no market for their product? Why didn't they wait just a little longer so they could inject more cash into the business? There is a comparison here with trading. If you want to become a proftiable forex trader then why do you hold back from learning from a professional? Why won't you commit the time and energy to back testing strategies? Why won't you take the step into trading full time? The truth is many traders don't want it enough.
Forex Trading Tip #4 - Attitude Determines Altitude
I believe it is possible to trade the forex markets for 20 minutes a day and do what you want the rest of your day. I also believe that business owners can work a few hours a day if that is what they want. What you generally don't see with these people is the amount of work, commitment and time they have put into trading or their business to get to this point. No matter if you want to trade 24 hours a day or 20 minutes a day, you need to work hard. You will need to spend time testing strategies, reading trading related books and have an attitude of success. Not many successful business owners got where they are due to a lack of commitment. Not many successful traders got where they are due to a lack of commitment.
Other Trading Tips
Forex Trading Tip #5 - Learn Strong Risk and Money Management and Apply
Don't risk more than 1% of your account per trade, especially if you day trade. Your funds are sacred, without them your trading career is over. Protect them and limit how much you risk per trade, doing so will have less of an emotional impact for both winning and losing trades and your results will be much more steady and reliable, no one wants roller coaster results or roller coaster emotions.
Forex Trading Tip #6 - Risk Reward is Key
Always seek to potentially earn more than you potentially risk. Surely it is better to earn 3% each trade when only risking 1% than to earn 0.5% when risking 1%?! Surely this is common sense?!
I hope my tips have been of benefit, please drop me an email, I would love to hear from you firstname.lastname@example.org
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