Today we are going to talk about something that can be very controversial and you might disagree with a lot of things written in this article, but please understand that about two years ago, I have read a similar article - I was angry after having read it, I didn't agree with a single idea in the article, but trust me - looking back, the ideas really helped me to understand that Forex trading is a regular business, which even some people who already achieved a certain level of success still don't realize. However, it is VERY important that you understand this, so that you can move on the the next levels of success.
Today, I am here to pass these ideas to you - I could not find the article anymore, but it has been stuck right there in my mind for those two years, so I guess I will be able to interpret it very well.
Regardless of whether you trade manually or automatically, you can either be a Forex "gambler" or a Forex "business owner". From my experience, even many of those people who would never admit that they are gamblers actually are ones.
Many people don't think of themselves as "Forex gamblers", but they don't even think of themselves as "Forex business owners" - now this is the most dangerous situation to get into. Let me tell you one thing - if you don't think of yourself as a business owner, it actually automatically makes you a gambler. I'm sorry, but there really isn't anything in between - you are either 101% sure you are a business owner and think of yourself that way all the time, or you are a gambler.
Now being a gambler surely isn't why you got in the business at the first place, is it? So what should you check to make sure you didn't become one?
I'm sure that you already know you should use stoploss, have a strategy and stick to it etc., but that's not really my point today. My point today is - does your Forex trading business give you any instant cashflow or not?
I'm not saying that you should forget compounding, but if you trade JUST for the compounding, then your business can actually never replace your main source of income and you will never be able to focus on it 100%.
A strategy that turned out to be a great way to manage your money was to track my monthly earnings and to withdraw 40% of it (or whatever is enough for you to live on) and keep the rest of it in your trading account. That way, you get the best of both worlds - you get exponential growth of your account, as well as a monthly cashflow, which will replace your main stream of income eventually and let you focus on trading more, which will further increase your profits!