Treating Forex Trading like a Business

Trading currency involves being a part of the largest financial operation on the planet. More than 1 trillion dollars moves through the foreign exchange market every day and that is not something to take lightly. Many people across the globe make a living out of trading currenciesĀ and they take it very seriously and if you are not willing to do the same, then you may as well just write a check and send your money to someone who is willing, because you will not have it very long. There are a couple of things you need to do to get ready to trade currency and the first one of these is to develop a trading environment.

One of the really special things about Forex trading is that it can be practiced from anywhere and at almost any time of the day or night. However, this does not mean you can sit in your favorite easy chair, drinking soda, watching sports and letting the kids run all around you. You must be able to concentrate on what you are doing so that you can make good decisions. You can use a monstrous three monitor setup with dedicated lines, a laptop or even an iPad to trade if you like. The equipment for most traders does not make a difference but what does is the way that you approach the time you spend trading. The potential to make a lot of money rides on the decisions you make. Treat them like they are important.

Once you have developed a trading room or environment it is time to set up your trading plan and develop a strategy. The strategy or trading plan that you use is not important for this discussion but what is important is that whatever strategy you choose to follow you must become single mindedly focused on it. In this manner you can recognize patterns that lead to profit in your sleep. This plan must be written, with all the rules laid out in advance and you must always follow it. Once defined your trading plan requires discipline.

Now that you have the first two in place it is time to trade. You must find a consistent time to trade that fits with your lifestyle. By committing yourself to trading, or analyzing the market, at the same time each day you develop a feel for the market and how it reacts. Separate yourself from other distractions when you take time to analyze the market so that you can concentrate on what you are doing and not be lulled into the emotion of the market and make a mistake.

In conclusion, the last two things that you must guide are handling your money like it is a business and the emotional roller coaster that is the market. Handling your money by taking profits, paying taxes and enjoying the fruit of your labor is a part of this business as well. Treat it as such. The number 1 nemesis of traders is emotion and it is a constant battle to fend it off. Having a bad day, do not trade; make sure you are emotionally ready to trade each and every time you sit down. Follow these simple steps and you will find it a lot easier to trade like a professional.

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