2.2. Why do you want to trade? What is your ultimate goal?
What are your reasons to trade? Why do you want to be in this business? Is it because you want to be rich? Is it because for easy money and fun lifestyle as described by Hollywood movies? You need to answer this question before you decide enter Forex trading business or other business. How can you achieve something if you do not know what your target is and what you want to be?
Study the business opportunity, future prospect, potential income, weaknesses, risk, lifestyle, requirements, and other business opportunities, etc
Your ultimate goal should be your financial freedom. One good way to achieve financial freedom is to own a business that generates passive income. You do not want to have a business that is very dependable on you, physically and mentally.
Trading Forex could be a passive income business; however it depends on how you approach the market and what your trading system is.
These are my reasons why do I want to be in this Forex Trading business:
- I will acquire a skill that can be used for a lifetime even when I get older and weaker.
My trading systems are not demanding physically. It only takes 5-15 minutes a day – and it must not be everyday to monitor the market, therefore I do not need to eyeball the market for a long time like many other trading systems.
My trading system is not demanding mentally because my trading system is so simple, clear, and everything has been planned before, such as what kind of pairs to trade and what price to enter and exit. Therefore I do not need to analyze each upcoming trading opportunity. I will give you the extreme opposite example; when you have a scalping system, you need to eyeball the market for hours, you need to think and make decision for every trade opportunity and you have to make it very fast; stress level is very high. You will be very exhausted physically and mentally. You can endure this when you are young, but how long can you stand?
- Have a business that is so simple that I can do it by my self so that I will not get headache with my suppliers, customers, employees, inventories and etc.
Trading Forex is a lone ranger business. I plan everything by my self; I do daily operation by my self. I have no employees and I am the boss. The only vendor you need to take care is your broker. You do need to take care of your inventories (trading positions), because some times, there will be trading platform glitches, the price gets spike up or down and takes your limit order or your target profit. I have experienced these glitches a couple of times, and fortunately my broker fixed them.
- Have a business that has no competitors
Since Forex market is very huge, you can buy and sell as much as you like; there are always buyers and sellers ready to take your positions (except when there is an anomaly like what happened on SNB movement on 15-1-15).
- Have a business that is not very affected by any market conditions.
It is because I have created my trading system so that can it be applied to any market condition regardless of bull, bear or ranging market condition.
- Have a business that is very scalable.
There are no other businesses I have found so far that is as flexible as Forex trading in terms of capital investment. You can start as low as USD 100 and you can upscale your capital as much as you like. You can match your capital with the contract offered by your broker, if you have very little capital, you can trade nano or micro lot, and if you get bigger capital you can trade mini or standard lot.
Forex market turnover is very big; it is three times bigger than all stock markets in the world combined. Therefore you can buy and sell as much as you like; the sky is your limit.
- Have a passive income generator and have a business that makes money work for me instead of the other way around.
You will have a passive income business or not is depend on what kind your trading system is. If your trading system requires you to eyeball the market for a very long hours, or even you need to monitor or make a decision on a daily basis, than your system will not be a passive income generator business. What happen if you get sick? You can not go to work and you will not get any income.
I will take scalping trading system for an example. If you scalp the market, than you need to eyeball the price movement, you need to make a decision whether to enter the market or not every time a trading opportunity comes, you need to make your decision very fast because target profit and your stop loss is very tight and you do not want to miss the opportunity. This scalping system will make you work for the money. You, instead of the money, that has to work in order to get your income.
Let’s compare it with my trading system. With my trading system, I have planned everything in advanced; how much capital is required, what pairs I am going to trade, what price level I am going to enter and exit. It is possible that I just put limit orders and just do nothing for weeks. Limit orders will take care of the trading. If your limit order has been taken then you just wait for your positions to reach their targets; the money is the one who is working to make money for you.
- Have a business that will free my time so that I can pursue other interests, hobbies or other business opportunities.
My daily operational task is to monitor my limit orders since I do not analyze the market and make a decision for every upcoming trade opportunity anymore. If my limit order is taken, I just wait the target profit to be reached; and if my target profit has been reached, than I just simply repeat the limit order. My daily operational task is just as simple as that. I only need 5 to 15 minutes a day and I do not need to do it everyday to monitor my trade. Therefore, I will free my time to do anything I like or to find other and do other business opportunities.
- Have a business that can be managed anywhere as long as there is a phone connection or internet connection.
Everything is easy now; internet connection and phone line are everywhere. Laptop and smart phone can make you virtually trade anywhere you like. But be careful, you do not want your trading system to be attached to one place, because such as you need multiple monitors to monitor the market, you need specific hardware which is not portable, or other reasons that make you trade in one specified place.
- Low tuition fee.
If you have the correct mentor, your tuition fee will be very low compare to if you go to college. You can easily pay tens of thousands dollars for college tuition, and what will you get in the end? You still need to find a job. I do not say that education is not important, I just want to stress that learning Forex Trading is very cheap and very rewarding. You can also practice with virtual money with the same condition as real trading as long as you like until you are confident to trade with real money.
But if you learn from wrong resources, your tuition will be very high. You will waste your money and your time. Remember when I said that my friend lost USD 100,000 in three months. It is a very high tuition fee just to know that Forex Market is a dangerous place and you can not trust anybody.