A few decades ago, trading was something reserved for very few people with a lot of money, who physically went to the trading floors to trade.
A few decades ago, trading was something reserved for very few people with a lot of money, who physically moved to the floors to be able to trade. Since a few years ago, however, this practice has spread thanks to the development of new technologies and the Internet, enabling the birth of online brokers: now anyone can trade from the couch at home.
During the worst years of the financial crisis, due to the lack of work, many people chose to try their luck in the world of investment, in markets such as Forex, with the aim of finding a way out of their unemployment situation. Some were successful but others believed that, without knowledge of the subject, they could make easy money. A mistake that many paid with the loss of all their savings and projecting a very negative image on this market. live-from-trading
The truth is that you can live from trading but to do so you need a series of skills and abilities that are acquired with time and dedication. The key is in training and, above all, in discipline. Although this does not guarantee that you will always make money, it does give you the necessary tools to make your investment profitable in the long term. For most professional traders, the monthly return on Forex was 1% in 2018.
Tips for success, live-from-trading
To be successful as a trader and really become a business, the first steps have more to do with psychology. A person can be very good at an activity, but if they are not disciplined and do not know how to control their emotions, it is very likely that they will fail. These characteristics, in trading, are even more important. It is also highly recommended that you do not have very high expectations at the outset. You have to assume that at some point you will register losses.
Once it is clear that we are ready to face the challenge, we must design a trading plan, that is, draw up a list of tasks to trade. This template has to include the objectives we want to achieve by setting a time frame for achieving them, what method of technical analysis we will use, the entry and exit points for the trades and manage the risks across the portfolio. live-from-trading
Whatever the strategy, the plan must include the stop loss that will allow us to define the closing price of the trade, i.e. a limit that avoids losing more than the expected amount. It is also advisable to set a take profit so that a position is automatically closed when prices reach a predefined level.
Of course, we must have initial capital that we can do without if the market goes against our positions. In this respect, only what we can afford should be invested, without affecting our standard of living. In addition, it is advisable to diversify and measure our risk profile and decide on the strategy we will adopt in the light of this.
If we want to trade we have to be up to date with all the current market news in order to make a fundamental analysis since any event or economic news can affect the technical analysis. One of the most useful tools to be able to do the fundamental analysis is the Forex calendar.
Experts also advise to avoid ‘overtrading’, that is, trading too often or too much.
Finally, you have to choose the right forex broker. To do so, the first thing to consider is that it should be regulated by a relevant entity. Secondly, it must have good customer service. Thirdly and finally, you must assess whether you have a good platform.