How to live from trading? It can?
Maybe like most retail traders you wonder if you can make a living from trading. In this article we are going to give you some tricks that will help you to know the keys to trading and to be a Forex trader. As you will see later, making a living from trading is not always possible, but what is possible is to make your investment profitable.
If you are interested in how to make a living from trading, keep reading because we will talk about psychology, trading tactics, and how to get free training to learn how to invest. Training is, without a doubt, the best strategy to win in trading and be a true trader.
- Can you live from trading?
- Keys to be a Forex trader
- How to make money in Forex?
These are questions that many people have been asking for quite some time as many traders have lost their money trading Forex and it seems that their experiences cast a negative shadow and doubt on the viability of this market as a trading option.
However, for a market that has a daily trading volume of $ 5 trillion – the Forex – it makes sense to think that money can be made. Otherwise, the market would be unpopular and would have already disappeared. Therefore, you should not wonder if Forex is profitable or how to make money in Forex, but how to trade profitably as a Forex trader.
Knowing how to reduce these risks is very important to limit your losses when trading. Sometimes, people get carried away by the success of someone who makes money in the Forex and waste their resources in the market without first understanding it, without training and without discovering how to live from trading.
To learn how to win on Forex, you first need to understand the business and the factors that are important to success.
We can’t wait for the stars to align in our favor. It is important to understand that we cannot rely on completely random events such as luck. It is clear that you cannot make a living from trading as soon as you start.
Living from trading – Keys to being a trader
Effort, focus and determination
The most obvious way to answer the question of whether it is possible to win at trading depends on what you would do with your own company if you had one.
If you wanted to start a new company, you wouldn’t invest in the first idea you heard, right? You would research and consider various options because you know that as George Buchanan said “a fool and his money are soon parted”.
Once you were running your company, you would not get carried away by events either. For your business to function properly, you would need to plan, set goals, review progress, and budget.
The same principles should apply to trading. Just like to achieve the goals you set for yourself in your life, training and living from trading requires effort, focus and determination.
When you Google something like “can you make a living from trading?” you will come across the stories of some people who have made millions in a few hours.
Do not forget that too beautiful stories tend to seek to catch you. That story of one who made $ 10 million in a year on Wall Street may be true. But what history probably won’t say is that this person is likely to be handling billions of dollars.
Living from trading – The path to success in Forex
Here are some tips that can help you succeed in Forex trading and make a living from trading in the future.
1. Forget about expectations
The main problem for beginning traders is that they have high expectations and are obsessed with making profits as soon as possible and making a living from trading as soon as possible, which generates great anxiety that can lead to losses.
So the first rule of thumb is to forget unrealistic goals and objectives – the idea of making money in Forex with just a few quick trades is extremely unlikely. Trading in a risky way and with overconfidence can be one of the causes that lead you to lose your initial investment.
This tends to happen many times when beginning traders follow price action in the very short term, with high overexposure, losing capital in a matter of a few months.
Generally, the most veteran traders focus on a single thought: “Make the necessary money in Forex to forget about making more money.” When setting a high monetary goal, the emotional pressure is very great, which can result in one of the most common mistakes, that of operating in excess, or what is known as ‘overtrading’.
As an alternative, it is best to focus on learning a trading strategy and researching all the trading tools available to you. We will return to this idea later.
2. Risk management
Before delving into the risk profiles, you should be clear that if you do not feel comfortable with the dynamics of the market, be it Forex or another, it is best that you forget to invest in it.
If, on the other hand, you think that your profile is in line with Forex trading, go ahead! Of course, keep the following in mind when managing risks:
- Invest only what you can afford to lose without affecting your standard of living.
- Diversify your investment, it is advisable not to invest more than 20% of your total investment in Forex in a single operation.
- What is your risk profile: Moderate? Aggressive? Conservative?
- Prepare to lose. If after a series of bad operations you are willing to keep trying, Forex is your market.
3. Choose a trading strategy
To try to make a profit in Forex you have to have a defined strategy. There is no right or wrong way to trade, what really matters is that you determine the strategy you will adopt. Sometimes you will find that one trading strategy works well for one currency pair in a certain market, while another strategy is more suitable for the same pair in a different market or other market conditions.
For your Forex to be profitable, you should try to focus on learning and practicing a certain trading strategy that fits your risk profile:
- You should research all the trading tools that are at your fingertips.
- Study the techniques that seem to make sense and think about how to use them in your strategy.
- Study how the markets behave and learn how the industry works.
- Do a Backtesting until you trust your strategy.
4. Put aside your emotions
Emotions are the worst enemy of a trader who wants to invest in Forex profitably. Some people try to see trading as a game in which they have to beat the market and when they start to lose, they are disappointed by their emotions.
First of all, trading is not a game and you should never treat it as such. Forex trading is an interesting activity that has a mix of analysis and discipline. You shouldn’t blame the market or worry about your losing trades.
For your investment to be profitable, you must understand how Forex works, trust your analysis and follow the rules that you established. This is the ultimate key to be able to win in Forex. Emotions can ruin the trader’s experience, so it is vital to put them aside and not involve them in trading.
If you are sad, do not operate. Are you feeling very happy and excited? Don’t trade either. Overconfidence in your operations can cause big losses.
5. Establish a Stop Loss and a Take Profit
Regardless of your trading strategy, it is always advisable to set a stop loss. This type of order allows you to define the closing price of your trade. Your order will be closed at this level, even when you are not present. In other words, setting a stop loss will give you the peace of mind of not losing more than you can afford.
However, there may be times when the market behaves erratically and has gaps in price. If this happens, the stop loss will not be executed at the predetermined level but will be triggered the next time the price reaches this level. This phenomenon is called slippage or slippage in English.
Live from trading – Conclusion
Answering this question about how to make money in Forex trading is very easy, what is not so simple is to achieve it. To trade Forex and make a profit you need to buy low and sell high, or vice versa. It depends on whether your trade is long or short.
Of course, if making money from Forex trading were that easy, there would be millions of traders online and no one would wonder if it is profitable to invest in Forex. However, the situation is very different. Most Forex traders actually lose money, especially in the beginning.
There is no golden rule. Many people are looking for a direct answer to the question “how to make millions in Forex?” and almost all end up using a certain market signal provider. This is a simple way to start being profitable in the Forex market, but we doubt that this profitability will be sustained in the long term.
The main thing you have to remember is that to be profitable in the Forex market and be able to make a living from trading you must collect more winning trades than losing ones.
This usually depends on your trading strategy and the risks you are willing to take. Trading in the Forex market is carried out on margin, which means that the size of your trade can be much larger than the amount of your deposits.
In other words, you can trade with much more than you have. This can lead to making a lot of money in Forex, but you have to be careful because it also multiplies the losses.
To operate profitably in Forex you must have:
- A high level of discipline
- A strategy to help you stay focused
- Avoid involving your feelings, which is the downfall of many traders.
The evolution of your strategy will come with use and experience. For beginners it is recommended that they trade for a while on a demo account to practice and understand how the market works before opening a live account. When you have experience, a good risk management policy and a strategy that works for you, you will be prepared to achieve your objectives in Forex.