Trading forex is a business
Negotiation is quite different from other companies, but it is still a business, and you must run it as one and think it’s a. Most of the traders initially on the right side of the wrong way out of the door by treating their trade like a trip to the casino rather than a business that requires structure and planning and who has real costs associated with it.
If you want to succeed as a trader, the very first step, run your business like a business and as a consultation.
As with any other business, the way in which make you profit as a trader is bringing more income than your outgoing costs. Also, like any other business, the way you lose money and eventually go out of business if your expenses are greater than your turnover.
Your business on the market costs
The main costs to operate a business of trading are losing jobs. Yes, it’s true, losing trades are and should be considered a cost of running a business. It is essential that you display in this way because it helps you become less emotionally influenced by the loss of jobs. Think of it this way; a restaurant owner is not sad or angry when it needs to reorganize food or pay its employees because he knows these things is just the cost of doing business.
Thus, your biggest cost of business as a trader are losses you take the loss of jobs. Each merchant on Earth, no matter how profitable, lost jobs. You cannot avoid them, so just accept that you will have to deal with the cost of the loss of jobs and instead of trying to avoid them, learn how to deal with them properly, but you must accept it as a course first cost (more how to do face with this cost later).
Another smaller cost associated with trading is that of broker commissions or spreads. It is an ongoing cost for you, and you should remember that whenever you enter a trade, you pay a spread or commission your broker. It is a real cost, and you see it as such. Day-traders who trade very frequently, of course, have a lot of costs associated with spread or commissions that swing traders like me (and you, I hope).
Set up a sales office
The most important cost following, you will have as a trader sets up your sales office. Now, this cost can vary considerably from trader to trader, but at the very least, you’ll need a good laptop and a desktop computer and a Chair. Some traders may opt for a multi-screen computer configuration and a costly computer desk and Chair, which of course could become very expensive. However, it is unnecessary to a profitable business. All you need is a good laptop and an internet connection.
The good and bad news on trading costs
OK, now that we have discussed the initial costs of doing business as a merchant, we will first discuss the good news to their topic. The good news is that you know what your costs are and he is not much of them. Also, you can contain your costs as a trader very easily and efficiently. This confinement is made by the management of your risks as you trade. This means, do not risk more that you can afford to lose a whole trade, which is done by using stop loss, of course. Knowing how to place stop loss will also be a factor in the management of the risks and maximizing the reward. A correctly placed stop loss can make the difference between trade a loser and a winner in many cases.
Now for the bad news on trading costs. If you do not manage them and contain them correctly, they can grow to at the outset, very, very quickly. In fact, if you do not your risk properly you trade, you can end up losing all your money trading very, very fast, faster than in other businesses for sure.
Knowing this bad news on trading costs, it should make you re-read the previous paragraph again on the good news of negotiation of costs and remind you that these costs may be managed and contained, but it is up to YOU to do!