If you are serious about making trading your main source of income, then be sure to make the transition the right way. If you abruptly quit your main job without good preparation, then you may be left without a source of income and money for a livelihood. Do everything step-by-step.
Treat Trading Like a Business
Forex can no longer be just a hobby or an additional and optional source of income. Now your financial well-being depends on the results of your trading.
Your market activity will become your business. Everything should be like in real life:
- Your trading account will be your business. You have to keep it afloat by any means. If your account fails, your business will burn out.
- You need a business plan. This should include your short-term and long-term financial goals. Check these goals regularly to adjust your actions.
- Schedule your work day. You need to know what time you analyze the market, what time you open and close trades, when you avoid trading due to the unpredictability of the market. Stick to this routine every day.
- Make a trading plan that includes entry and exit points, risk levels, etc. Without it, you are doomed to fail.
The success of your business will depend on your discipline. Always stick to every point in the plan you make.
Choose the Best Strategy
Obviously, there is no perfect Forex strategy. Your job is to choose a good system and test it thoroughly. Don't make Forex your only source of money with a new trading strategy. You must be confident in every step you take and know for sure that your strategy will not let you down.
It’s not enough to test the system on a demo account only. Trading virtual and real money is very different. After testing on a demo account, check how your strategy works in different market conditions on a live server. Your system should be profitable in any trend and at different volatility levels. If the return on the strategy under certain market conditions is too small, get yourself a backup strategy for such a case.
You Need Start-Up Capital
You need solid initial investment. In the best case scenario, the return in Forex is 20%. Usually it’s 5-10%. Plus, you need to withdraw part of the profit, since now these funds will be your salary.
Find out how much money you and your family need per month. Let this amount be 5% of your initial investment. This way you can get your salary and continue to increase your capital.
In addition, you need a reserve amount to support your margin in case of a drawdown. Market conditions can be unpredictable. Plus, you need an emergency fund in case Forex is temporarily not profitable for you. This money will support you and your family until trading becomes positive again.
Forex trading can give you the desired financial independence, mobility and a lot of free time for your favorite activities. This is an attractive goal for any trader. I wish you to successfully achieve it, but make sure you do it right.