There is the close relationship between addiction and devotion. Most of the new forex traders get addicted to forex trading due to its extensive potential return. They think of getting 100% return on their investment from a single trade which is nothing but gambling. On the contrary professional forex trader take this as business and expect realistic outcome from their trade. They don’t run for the profit only rather they constantly look how to secure their investment. Trained professional are more concern about their investment on return. But the rookie traders are always busy with calculating their potential out from every single trade and constantly modify their order due to excess greed and immaturity. If you truly want to lead a stable life by trading the financial instrument then you must think trading as business like every other business forex trading also involves risk and potential losses. But the potential benefit out this market extremely high compared to other business. Without managing the risk factors no one can survive this business in the long run. It’s true that you will have losing trades very often but you can’t risk your whole trading account in a single trade to recover the loss. Unlike other business, losses in the forex market can be recovered with a single trade by taking high leverage risky trade. But such aggressive approach is not a business at all. If you are thinking to take forex as a full-time profession than consider yourself as a business man and develop the ethics of profitable entrepreneur inside of you.
There is no other business in the world without initial investment and operational cost. Most newbie’s in the forex industry think forex as potential income source only. They never give themselves enough time to educate themselves about the potential risk involved in trading. Doing something successfully requires the strong knowledge of that industry. You must be aware that no one in the world can predict the market rather they can only make a forecast based on their analysis. But analysis can be wrong very often. So as a trader you should be well aware of that and make sure that you lose the only small portion of your trading account if you lose in a single trade. The golden rule in the forex market is the money management. Without proper money management, no can survive this industry regardless of their trading capital. Professional traders make sure that they are going to make at least twice for the amount they have risked. In this way, they create a smart window to stay profitable even though they have many losing trades in their portfolio. They are always concern about the long-term effect. They are not carried away with their emotions, over trading and revenge trading regardless of consecutive losses. It’s only because they know they can be right only 50% of the time yet become profitable in the long run due to their smart risk reward ratio.
So how take forex as business and become a successful trader? The answer is pretty simple. You need to follow proper money management and stay focused regardless of your trading result. You can either aim for the very high percentage of winning trade which is almost impossible or go for high reward trades only. Statistics and research show that most of the professional traders only have 60 % winning ratio which means out every 100 trade they lose more than 40 trades. So how come they are still profitable in the market. This is where the term money management comes into play. There are some millionaire traders who make more than million a year only with a 50% winning trading strategy. The secret behind their amazing success lies within the golden risk reward ratio. They aim for 1:3 or much better risk reward ratio in the market. This significantly improves their long-term profit since three losing trades are covered only by one winning trades. On the contrary, novice trades play the opposite. Even after having a winning percentage of more than80 they fail miserably in this market. The reason behind their pathetic result lies within their poor money management. A single losing trade is costing more than 4-8 winning trades which is not at all professional in this industry. Even such practices also destroy the good confidence of the traders and lead them into the way of greed and gambling. You must cut your losers early and let the winner run long in the field. But make sure that you know your exit point just as good as your entry point. A perfect trading strategy will fail unless the traders fully commit themselves in the world of discipline. Determination, devotion, and dedication often termed as 3D is a must if you want to think forex as a business, Always stay focused on the long-term output of trading result. The more steadily you will trade the more rational decision you will be able to take. But if you gamble and lose control, then forex is not for you.
Summary: Trading the forex is very intimidating and requires an extreme level of patience and dedication. When you think to quit your day job and take forex as the full-time profession then you must treat forex as a business like every other business, you must know how to deal with you loses. Most importantly don’t trade with the money that you can’t afford to lose. Make sure you have financial back for at least 3 months which will help you out on the bad days. And if you take forex as the full-time profession than today or tomorrow you will have some losing months. Professionally trained traders are always concerned about this fact and they act accordingly. Lastly stay focused and trade with proper money management and don’t deviate away from your ethics in the hand of greed.