Currently, it is estimated that over $4 trillion is traded daily in the forex exchange market. With this huge sum running daily, Isn’t it smart to trade forex as a real business and not just some sort of game? (Be sincere with your answer).
Today, the global market is being dominated by big banks, private investment and big corporations. However, a report from the bank for International Settlements revealsthat retail traders represent a growing population.
In 2010, the retail trade volume was recorded to be about $313 billion. This increase in the retail volume was driven by several factors such as: the stock-market volatility and also an increase in upstart online trading platforms including:
- Oanda Corp
- XM etc
While there are many outcomes of trading forex as a non-business investment, the major ones are as follows:
#1 killing your primary aim: Just like with any other investment, once you start treating forex trading as a non business, you’re gradually killing your primary aim of investment. Of course, your primary aim to invest into this high volatile multi-trillion dollar business is to make a profit. But the moment you start running this investment as a game instead of a real business, your primary goal start’s to deviate.
Every investment in the world today, no matter how little it is, when treated as non business-- tends to lead to a potential loss.
For example, Peter (a day trader) from College X lacks the followin criteria below; because he trades forex as non-business man.
- He lacks proper planning tactics.
- Zero strategizing ability.
- Low ability of recognizing risk and perfect timing.
Considering these following setbacks, isn’t there a higher probability that his aim of investment is tending towards a dead end? Of course it is.
But on the other hand, if Peter decides to trade forex with the proper business mindset, he’ll be able to develop an effective t-plan, strategize, recognize risk and perfectly time his trades.
#2 Taking longer time to understand: Yes, one of the ways retail trader gets affected by trading the forex market as a non-business investment, is that it takes a longer period for such trader to understand the forex business.
Do you know that one of the essential factors every forex trader needs, to break even in the fx market--Is UNDERTANDING?
Apparently, understanding is a function of focus, and focus heavily depends on your mindset. So therefore, if you consciously run fx-trading with a non business mindset, it’ll definitely take a longer time for you to understand and interpret the fx market properly.
#3 Making consistent profit is not certain: This is also one of the outcomes of trading forex as a non-business investment?
Do you know that making consistent profit in forex trading is possible?
Beyond all reasonable doubts, a trader who treats forex trading as a real business ends up making consistent profit from his investment because he is willing to understand the language of the Fx market and how the market operates. He technically knows when to execute an order and when not to.
On the contrary, a retail trader who treats forex trading as a game, instead of a pronounced business, struggle to maintain his invested money and might probably lose all if proper care is not taking.
#4 Focusing on trades is not fully guaranteed: Just as I’ve mentioned earlier, retail trader that treats forex trading as a non-business investment--loses focus while they trade.
I totally agree with Paulo Coelho-- “whenever you want to achieve something, keep your eyes open, concentrate and know exactly what is it you want. No one can hit their target with their eyes closed.” This is a fact.
Retail traders who trade forex as non-business investment, posses either little or zero focus to trade the fx market. Why? Because their mindset is already wired to run this type of investment (forex trading) as some sort of luck.
#5 Planning and setting of realistic goals is totally restrained: If you’re a trader who trades forex as a non-business investment, there’s a higher probability that you’ll be so blinded with the idea of making money quick, without realizing and considering that you need to plan and set realistic goals before executing your trades.
Trading with a non-business mindset only narrows your focus to hitting in big, instead of slow, steady profits. This can inhibit you from developing effective plans and setting up realistic goals while you trade.
In conclusion, the above tips discussed are the major outcomes of trading the forex market as a non-business investment.
So, If you really want to shine in this business, you definitely need to change your mindset and start to visualize trading as a real business investment.
Have you been trading forex as a businessman or a gamer? (Answer yourself)