October 27, 2013
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Viewing FX as A Business

FX As A Business

This article looks at viewing and trading on the FX market as a business person.

All new traders aim for two things when entering the foreign exchange market – to earn money, and to earn this money on a full-time basis.  The idea of being your own boss and setting your own work schedule is very appealing, but it requires a great deal of commitment and dedication.  It is these points that you must take into consideration if you are going to trade on the FX market as a home business.

The facts of an FX business

1. Expect bad trades

If you are going to trade the FX market as a business person, then you must consider the facts of the industry.  Firstly, you must not expect profitable trades within the first year.  The foreign exchange market is a highly volatile financial environment, and approximately 90% of all traders experience detrimental losses in their first year.  By accepting this statistic and accommodating for it, the chances are less likely that you will experience truly damaging trades.

2. Risk is always present

Just as there are guaranteed losses, there is always the presence of risk in forex trading.  All trades will present with a risk of loss, and the success of a trader is measure on the ability to reduce this loss instead of experiencing profit.  In order to avoid detrimental bad trades one should always implement risk management techniques into your trading strategy.  The most common of these methods is the stop loss order.  This is a stop that will close the position of the trade falls below the market price.

3. Be prepared for scam merchandise

When purchasing an automated FX trading system, you must note that there are no guarantees in profits.  Any product that promises 100% profitable trades is lying and more than likely a scam system.  Always do a background check before buying products or services to make sure you are being exploited.

4. You must be dedicated

In order to be a successful trader, and have a successful business, you must be willing to work long hours.  Effective trading requires constant research, evaluation, discipline and monitory.  It must remembered that despite the amount of work, one can still experience loss.  This is why you must have the personality and financial means to conduct this type of business.

Questions to ask yourself

If you are considering a FX business, you must determine whether you have the correct personality for the stress involved.  Here are some questions you should ask yourself to establish whether or not you can succeed in the FX trading world.

  • Do I have enough drive to succeed in the trading market?
  • Do I have the dedication and time to learn about FX trading?
  • Do I have the dedication and drive to develop trading plans?
  • Do I have the discipline to adhere to a trading plan?
  • Do I have the capital to begin and see me through the development of an FX business?
  • Am I able to handle the anxiety and stress of the FX market?

 

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