Hello friends! I am glad to again do something useful for you and for myself, today, have a look at forex trading as a business! I have translated an article by Neil Fuller, I think it would be great to continue this practice, as his blog contains a lot of useful information. Neil wrote an article in the "lessons" format, so they obtained clear even to beginners.
But first, a few other news. In the comments to this article, I have promised to learn about taxation for trade. The point is not easy, as it turned out. The question is what constitutes the basis for calculating taxes. I tried to find out this information directly on your tax. In the department of counseling to help me have failed. Then I turned to the off-site inspections department (department which checks the taxpayers). There is no clear answer as followed. But learned a few interesting facts. The Ulyanovsk Region I'm the only person, who is engaged in trade. Therefore, no one knows anything, no practice. (Will get it to me ...) All the same, I was advised to take as a base for the payment of income tax received on the bank account. That is, only the profit, which is derived from the trading account. But it is inaccurate, unfortunately. We will seek clarity on this issue.
More news from my sporting life. I've been weightlifting, long, just over a year. This weekend took part in the first competition, regional. Of course, the top places to take did not work, but I really liked it :-). It is encouraging for further development!
Well, all chattering too much, it is time to translate the article.
Transfer.
Forex trading is a business.
One of the biggest mistakes novice traders is that they do not perceive trade forex as a business. Instead, most if playing in a casino, sitting in front of screen, like a drunk junkie to a gaming machine, where you need to be calm and prudent. Anyone who wants to succeed in trading, must understand that Forex trading - a business.
Like any other business, trading is impossible without costs. Your goal - to earn as many profitable deals to recoup expenses and net profit. If you can do that, then you are able to achieve a result. However, if your spending get out of control, then the business will be unprofitable.
The cost of doing business in the forex market.
As in any business, trade requires some costs. Of traders lose money in unprofitable transactions, paying a spread and other commissions, acquiring computer and other. Technique. It does not matter what you are trying to avoid losing trades, no matter how you tried, they still will be, and it is the main source of cost. But not all traders can understand and accept. As already mentioned, many people play in casinos, and some want to be perfect and not to enter into any losing trades, it is a utopia.
Exchange Trade The reality is that you will always have losing trades, you can not eliminate them completely. So losing trades - these are the main costs. What to do? We must make sure that your profitable trades covered loss-making to ensure the profitability of this business.
For clarity, let us recall the main costs:
1. Loss of the transaction;
2. The brokerage, spread, swap;
3. The computer, other equipment;
4. Software;
5. Other equipment.
This is the main cost that most traders can not be avoided. Your task is to make sure that your profitable trades are paying all these costs and, moreover, make a profit.
How to do business in the forex profitable?
Now quite a bit about how to become a successful trader. I will not go into details, just touch on the highlights, in the context of the theme of this article.
As already mentioned, you need to make sure that your winning positions more than offset the costs. I will highlight two ways to achieve this:
1. Have a very high probability of a profitable trade, compared with a probability of losing.
2. Making a winning deal substantially more than is lost in losing.
Most successful traders agree that Option 2 is much easier. This is obtained by using the ratio of profit / risk. If we can achieve a ratio of 2/1, that is, in each profitable trade to earn twice as much to lose in a loss, then will make only 35-40% winning trades to earn adequately. Most professional traders do not aim for a high percentage of winning positions, focusing on the ratio of profit / risk. Let most of the time they are losing, but in profitable transactions, they will pay for everything!
It is important to remember that we should not constantly be right for successful trading. You can be wrong most of the time, but in the end to make a profit.
What are the differences in the forex business?
In other businesses, you find a particular market, or get the necessary skills to develop products and then earn on it. The same is true in trading to make a profit, you need to try to learn and work. In any business, it is to be patient, focused, disciplined, faithful, hard-working, strong, and full control of himself and his plans.
But in order to achieve results in trading, you can not be stronger than the market, or to control it. All that you can do is to determine what is happening in the market and understand how you act in this situation. This does not mean that you should not be confident in your trading, but you must understand that you are a simple trader, like thousands of others, and never will be able to monitor important events or price movements.
Do not rely on a friend a successful trader or hope for the adviser to ensure their future. You have to constantly work on your trade, even when it will bring to automatism, monitor and follow up the results.
How to build business in the forex?
Successful traders spend most of their time on the development of trade skills rather than searching for the "holy grail". If you have a trading rules or strategy that is right for you, you need to work on yourself, to unconditionally fulfill all the points. We'll have to move a lot of stress and lose a lot of nerves before the sale will be an enjoyable experience.
I often read on the internet that if you have mastered a strategy, it's time to start looking for another. I believe that this is nonsense! It is better to focus on one, bring it to automatism, try to improve, make profitable and less risky. Give her time to shine!
When you act in a consistent and disciplined, stick to your strategy, then your forex business will flourish. In addition, you will ensure your future, and trading is fun.
More news from my sporting life. I've been weightlifting, long, just over a year. This weekend took part in the first competition, regional. Of course, the top places to take did not work, but I really liked it :-). It is encouraging for further development!
Well, all chattering too much, it is time to translate the article.
Transfer.
Forex trading is a business.
One of the biggest mistakes novice traders is that they do not perceive trade forex as a business. Instead, most if playing in a casino, sitting in front of screen, like a drunk junkie to a gaming machine, where you need to be calm and prudent. Anyone who wants to succeed in trading, must understand that Forex trading - a business.
Like any other business, trading is impossible without costs. Your goal - to earn as many profitable deals to recoup expenses and net profit. If you can do that, then you are able to achieve a result. However, if your spending get out of control, then the business will be unprofitable.
The cost of doing business in the forex market.
As in any business, trade requires some costs. Of traders lose money in unprofitable transactions, paying a spread and other commissions, acquiring computer and other. Technique. It does not matter what you are trying to avoid losing trades, no matter how you tried, they still will be, and it is the main source of cost. But not all traders can understand and accept. As already mentioned, many people play in casinos, and some want to be perfect and not to enter into any losing trades, it is a utopia.
Exchange Trade The reality is that you will always have losing trades, you can not eliminate them completely. So losing trades - these are the main costs. What to do? We must make sure that your profitable trades covered loss-making to ensure the profitability of this business.
For clarity, let us recall the main costs:
1. Loss of the transaction;
2. The brokerage, spread, swap;
3. The computer, other equipment;
4. Software;
5. Other equipment.
This is the main cost that most traders can not be avoided. Your task is to make sure that your profitable trades are paying all these costs and, moreover, make a profit.
How to do business in the forex profitable?
Now quite a bit about how to become a successful trader. I will not go into details, just touch on the highlights, in the context of the theme of this article.
As already mentioned, you need to make sure that your winning positions more than offset the costs. I will highlight two ways to achieve this:
1. Have a very high probability of a profitable trade, compared with a probability of losing.
2. Making a winning deal substantially more than is lost in losing.
Most successful traders agree that Option 2 is much easier. This is obtained by using the ratio of profit / risk. If we can achieve a ratio of 2/1, that is, in each profitable trade to earn twice as much to lose in a loss, then will make only 35-40% winning trades to earn adequately. Most professional traders do not aim for a high percentage of winning positions, focusing on the ratio of profit / risk. Let most of the time they are losing, but in profitable transactions, they will pay for everything!
It is important to remember that we should not constantly be right for successful trading. You can be wrong most of the time, but in the end to make a profit.
What are the differences in the forex business?
In other businesses, you find a particular market, or get the necessary skills to develop products and then earn on it. The same is true in trading to make a profit, you need to try to learn and work. In any business, it is to be patient, focused, disciplined, faithful, hard-working, strong, and full control of himself and his plans.
But in order to achieve results in trading, you can not be stronger than the market, or to control it. All that you can do is to determine what is happening in the market and understand how you act in this situation. This does not mean that you should not be confident in your trading, but you must understand that you are a simple trader, like thousands of others, and never will be able to monitor important events or price movements.
Do not rely on a friend a successful trader or hope for the adviser to ensure their future. You have to constantly work on your trade, even when it will bring to automatism, monitor and follow up the results.
How to build business in the forex?
Successful traders spend most of their time on the development of trade skills rather than searching for the "holy grail". If you have a trading rules or strategy that is right for you, you need to work on yourself, to unconditionally fulfill all the points. We'll have to move a lot of stress and lose a lot of nerves before the sale will be an enjoyable experience.
I often read on the internet that if you have mastered a strategy, it's time to start looking for another. I believe that this is nonsense! It is better to focus on one, bring it to automatism, try to improve, make profitable and less risky. Give her time to shine!
When you act in a consistent and disciplined, stick to your strategy, then your forex business will flourish. In addition, you will ensure your future, and trading is fun.
