Many new traders view the forex as some side hustle that can fetch them a sure income. This fallacy has led many to quit.
There are numerous reasons why some traders leave forex trading. For one, there are several scams posing as legitimate platforms, cheating traders out of their hard-earned income.
That’s why more forex and binary options traders are checking independent sites to view the reliability of the platform they want to sign up on. However, you can find the best broker reviews here before starting your trading journey.
Newbie forex traders exit the market when they fail to make a consistent profit. To achieve an aggregate gain from the forex market, you need to view trading as a business.
Three things determine the success of a trader. The first is trading psychology. This involves your strategy and how you manage your risk. The second is how you view your trading. You’ll most likely maintain a consistent profit margin if trading is viewed as a business. The third is your behavior in the market.
Here is how to view your trading as a business:
Create A Vision For Your Forex Trading
Most successful entrepreneurs have one thing in common. Their businesses, whether small or big, have vision statements. A vision statement comprises the place you see your organization in after a specified number of years.
Even the world’s biggest firms have vision statements and never relent on covering every inch of the globe to offer their services.
As a forex trader, you need to incorporate your vision statement into your trading plan. Your statement should be tailored based on where you see yourself in the next few years. With this, you can work towards adding a couple of extra zeroes to your trading balance.
Once you’ve created your vision statement, you can print it out and place it in different areas of your home where you’ll view it the most. That way, it becomes part of your daily routine.
Finance Your Trading Balance Properly
Many people venture into the forex market with little cash. Some brokers even allow you to trade with $20, allowing easier access to the foreign exchange market.
The issue is that anyone trading with $100 or $50 is most likely getting into trading for the short term. Often, these traders lose all the money they place in their accounts.
You can create a demo account on a forex platform to test the market without fully venturing into it. Using $50 or $100 to test-run trading usually results in bigger losses than you can imagine.
To properly venture into the forex market, you need to start with considerable capital. You don’t have to put in more than you can afford to lose. However, you need to place an amount you’re certain will make you serious about trading.
Aim For A Reasonable Profit Level
Many new forex traders venture into the market because they believe forex can triple their account balance within a short period. That’s why many traders aim for high profits.
If you’re used to the forex market, you’ll know that sometimes you can make the right prediction and sometimes still end up with a loss.
These traders don’t understand that. When they’re supposed to take profits and exit the market, they ride the wave longer than they should and have the market reverse on them.
The failure rate in the forex market is estimated to be around 96%, with only 4% of all traders continuing the venture.
This is because most traders believe they can profit daily from the market. The truth is that you can only make profitable trades when the market conditions favor your strategy.
If you try to force it, you’ll end up with a loss. Aim for a reasonable profit level, more like 30-50% of your capital per annum.
Ensure Your Trading Environment Is Comfortable
When your trading environment is convenient and comfortable, you’d be calmer and better suited to make reasonable trades. That’s why you need to practice trading in a space with little to no disturbance.
You also need to eliminate anything that can distract you, like social media and movies. You can place your smartphone on the ‘Do Not Disturb’ mode. This way, you’ll feel like you’re handling serious business and place full attention on your trading.
You can also have your vision, statement, and trading plan facing you during trading. Many individuals get into forex trading because they believe the market offers consistent profit.
However, many leave when they realize that the reality is different. If trading is not viewed as a business, the probability of getting rewards from the market considerably drops.
To view your forex trading venture as a business, you need a comfortable trading environment, aim for a reasonable profit level, finance your trading balance, and create a forex trading vision statement.