In terms of Forex trading advice I would give any new trader is to treat Forex trading as a serious business and you can make a lot of money and in this article I will show you how but if you do what most traders do and treat as a hobby or just trade with no business plan you are going to lose money. Let's look at how to make a lot of money trading currencies.
When you start any business you have a plan and Forex trading is no different and your plan involves:
– Research of all the BASICS to do with the business you operate in and develop a strategy for profit.
– An analysis of overhead and income to give you a REALISTIC profit objective.
How many traders start with a plan like the above before they trade?
Not many so let's look at what you need to do to make money and operate at a profit.
If you are a business owner you know all the basics about your market and the same is true in Forex trading. You need to learn how to make money and devise a system to operate in your market and this involves developing a strategy which is straightforward to do because – good Forex trading systems are simple and therefore easy to learn.
The real problem for most traders is they don't know the basics and they don't develop a plan and end up losing. They try and trade news stories, follow gurus or use robots and think, they can get a short cut to success and they lose. If you want to win, you have to do your own research, accept responsibility and execute your plan with a view to keeping your business overhead down and profits bigger which is the real key to success.
The key to Business Success
The key to trading Forex is to make sure your income exceeds your overhead or converted to trading this means keep losses down and make sure your profits are bigger! Most traders fail to do this and the reason they do is – they want to make money on the bulk of their trades but this is no possible, you have to have an overhead to win so taking losses is part of your business – the key winning is to keep your overhead down.
You will not win 90% of your trades as many people tell you, you will win probably no more than 50% but that does not matter, as long as you keep your overhead (losses) small, your business can still make an overall Profit if you run you profitable trades, to cover losing ones and make an overall profit.
All business owners will know, they will have numerous losses lighting, heating, wages, tax, rents etc but they also know, they have them to make a gain and it's actually the same in Forex trading, your losses are your overhead and your winning trades can cover them and make you a lot of money. To stay in business, you must keep the overhead down.
How Much Can Money Can You Make?
A realistic target growth per annum is 50 – 100%, this is a ballpark figure but one which is a good one to aim at and unlike many other businesses, a Forex business requires far less effort to make big profits thmost other businesses and I know many traders, who make a 100% annual gains in around an hour a day – what other business can give you such great profits in so little time?
I cant think of any business with such great rewards to the effort you have to put it. If you take your Forex business seriously, you can make a lot of money but if you treat it as a hobby or a gamble, (as most traders do) you will join the 95% of losers – treat it as a serious business and you can make you a fantastic income.