Why You Should Not Park Money In your Forex Account?
Hello subscribers and readers, welcome back and thank you for stopping by. By parking money, I don’t mean funding your trading account and not trading it. I mean when your account is funded and you are trading it and making profits, do not just leave it in your trading account. Below are the few tips on how you can utilize your trading profits.
Let Your Account Sustain Itself
Now let’s be honest, when you are employed, you allocate transport money from your salary. Your trading account should be able to do that for itself as well. When you take data/Wi-Fi off your budget and let your trading account take care of that, you will feel so great. This is the first one to do, it shows that you are winning and you are moving.
Start A Business
In this case, I would look at the trading account as an investment. When your investment grows, take a portion and put it towards starting a business or growing your existing one. Every end of each month, you’ll need to close your trading books, see how you did and allocate a certain percentage towards growing your business. You can do 10%, 20% or whatever amount that you see fit. That percentage amount should be the same every month. This will not only help you grow your money but it will encourage you to take your trading account more seriously and treat it like an investment. As your business grows, invest some of the profits back to your trading account and keep repeating.
Invest in Shares
If you are in S.A, you can invest in shares using reputable brokers. From your trading account, allocate a percentage that will go towards your share portfolio. Investing in shares is long term, grow your portfolio by using your Forex money.
Buy Something For Your House
Yes I said it, buy something that you will always look at and be proud that you bought that with your trading money. Just like when you start working, it feels so good to look around and see a new microwave that you bought with your own salary. That sense of ownership will encourage you to always do your best in your trading account so you can acquire more. A happy trader does way better than a frustrated one. By all means, do things that makes you happy.
Grow Your Savings or Emergency funds
Allocate a percentage towards your savings. When you have grown your emergency funds/savings account or your tax free account (if you are in S.A) you will feel so proud and be more encouraged to do well in your trading account so you can allocate more. You can make your own list of things that you can do with your Forex money. This post is for someone who is making profits but just keeping them in the Forex account. I recently did an episode on my Podcast covering this topic. You can listen HERE. Thank you for stopping by. If you think this is an eye opener post, please share with your peers and feel free to leave a comment.
SOURCE Wikipedia: Personal development consists of activities that develop a person’s capabilities and potential, build human capital, facilitate employability, and enhance quality of life and the realization of dreams and aspirations. Personal development may take place over the course of an individual’s entire lifespan and is not limited to one stage of a person’s life. It can include official and informal actions for developing others in roles such as a teacher, guide, counselor, manager, coach, or mentor, and it is not restricted to self-help. When personal development takes place in the context of institutions, it refers to the methods, programs, tools, techniques, and assessment systems offered to support positive adult development at the individual level in organizations.
The Importance Of Personal Development In Forex Trading.
Forex trading is not only about learning certain trading strategies. A lot of traders have amazing trading strategies but they still fail. Trading is more about being able to manage ourselves. The best way to manage our trading accounts or money is to manage ourselves. A trader who works on themselves finds it easier to navigate through challenges. Below are the few areas that one can develop as a trader.
Patience
If there’s one thing that a trader needs, is patience. Patience to analyze and to wait for a perfect setup before executing trades. As a trader you will also need to be very patient with yourself and give yourself time to learn and gain the necessary experience. If you are an impatient person in all other areas of your life, you are not going to suddenly switch to a patient person instantly especially in your trading. You will keep on messing things up in your account until you work on yourself and fix your patience levels. As a teacher/mentor/coach, I also do a lot of personal developments. Patience is one of the areas that I had to look at because it would be impossible to teach without it.
Gambling Addiction
Over the past few years, I have taught, mentored and coached people who come to me with different challenges. A couple of times, I had mentees who were addicted to gambling, they would spend weekends at the casino. No matter how much I tried to help them stop gambling with their trading account, they would still gamble. It was only when one person who had the gambling challenge told me that they are getting help because it has been a problem for so many years and it has affected his business and marriage. If this person did not work on that problem, he would have lost a fortune in the markets.
Self Control
Some people need to develop this area. If you lack self control, you are likely to struggle with keeping your profits. Most people make money but at the end of each day or week, they give it all back to the markets because they just couldn’t stop. They kept on going back for more trades even when they have made their target. Until such a trader works on their self control issues, they will keep on donating to the markets. Check out these VIDEOS here and avoid such mistakes.
Confidence
In 2019, I published a blog post on how to build self confidence, you can check it out HERE. When it comes to confidence, one may have confidence in other areas but lack confidence in trusting self or making decisions. This can also be worked on through personal development. If you always end up loosing opportunities because you are lacking self confidence, this can be fixed. I only shared a few just to give you an idea. You can search for more areas that need to be improved in your own life and start working on those. The person that you are cannot be separated from the person who trades. I recently published an episode on my PODCAST on this topic.
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Hello subscribers and readers, welcome back, it’s been a while. If you just stumbled upon this blog today, you are welcome. Should you find value in this post and wish to be notified whenever there’s a new publication, please kindly subscribe. Today’s topic is one of the frequently asked questions from people who follow my work online, people ask me this question every other day, including my mentees. That is also a biggest contributor of people seeing it fit to borrow money to trade. I cannot ignore the fact that Forex trading has been portrayed as the quickest way to make money online. Without further ado, let me get to it.
Why Do People Borrow Money?
Most people borrow money when there’s an emergency that needs to be taken care of and they have no emergency fund to finance it at that time. I know that other people do borrow money just so they can go and have some fun, but today I need to focus on borrowing for a need. A person who borrows money to trade may feel that there’s a need as they also believe that they can easily pay it back after trading for a week or so.
Disadvantages Of Trading With Borrowed Money
Trading requires you to be “sober minded”. Anything that causes stress, pressure and anxiety should be eliminated or avoided. When you trade under pressure, you are likely to be impatient and make mistakes. Let’s say you borrowed R50 000 from the bank and your loan repayment is R3000 p/m (please note that these may not be accurate figures), this will mean that every time you place a trade, you will be thinking about making that R3000 and if it happens that you are only left with one week to pay, you’ll find yourself forcing your way into the markets so you can make the loan repayment amount. I have done this a lot and I have seen other people doing it. It always leads to margin call.
What If My Start Up Capital Is Too Small?
I always advise traders not to trade on demo for too long because trading on live account is totally different from trading on demo, it requires its own practice and no one gets too attached to fake money. If you think your capital is too small, do not wait until you get more money. Start small and work on growing it. I have published a PODCAST on this topic, please do check it out for practical tips on how to grow a smaller trading account. I know from feedback that this episode has been helping a lot of traders to grow their smaller trading accounts.
I hope this helps. Thank you for stopping by. Please kindly share this post with your peers using the share buttons on the sidebar. For weekly tips on trading psychology, you can download the App on Google Playstore and never miss out on those tips. Stay safe and take care.
Stock Index trading is when you trade a basket of stocks which make up an index , but you go through one of the instruments like Nasdaq, Ftsee100, S&P500, Dow Jones, Dax and many others to trade it. Stock Index trading is different from Stock Trading. In Stock Trading you are trading stocks of specific companies, and each company has its own price. Once you’ve purchased stock, you then own the stock and it has to be transferred to you by the seller. Stock trading also requires you to do lots of research about companies where you want to buy their stocks.
How to trade Stock Indices?
Trading in the Forex markets is not only about currencies. There are various financial instruments that can be traded (you may require a bigger capital to do so). Maybe up to now you thought trading stocks is not for you, you are a Forex trader. The opportunity for Stock Index trading is presented right in front of you, you see it every day when you log in to your trading platform. If you are like me and you have taken trading financial markets as an investment, you might want to diversify your portfolio by introducing Stock Index trading to your daily activities, instead of focusing on currencies only. Let me start by identifying some of the few stock indices that you can check out.
INSTRUMENT
CATEGORY
Dow jones/USA30
Industrial
Nasdaq/USA100
Technology
Ftse100/UK100
Comprises of 100 companies on London Stock Exchange (Vodafone is one of the companies listed)
S&P500
Comprises of highly market public held companies. Amazon is one of them.
Dax/Ger30
Represents 30 largest and most liquid German companies that trade on the Frankfurt Exchange
Advantages of trading a Stock Index
Stock indices have generally higher returns than the stock market they represent.
The volatility is reduced when compared to currencies.
Stock index trading requires less research as opposed to trading /investing in individual stocks.
When trading a stock index e.g. FTSE 100, you do not have to spend weeks analyzing all 100 companies under this umbrella but all you can do is just follow FTSE 100 index as you would do analyzing your currencies.
Stock index trading does not require any traditional stock brokerage where you pay high fees, you can buy and sell on the same Mt4 trading platform as you would do with your currencies and it is a much cheaper way.
How to trade FTSE 100
You will have to know what is happening in the markets as far as the economic calendar is concerned in order to succeed in this. A few points to consider when trading FTSE 100 is the release of Interest Rates announcements, UK manufacturing numbers, GDP (gross domestic products) figures, housing figures and Inflation data.
All the above are key to trading FTSE 100 successfully. This index tends to imitate the European markets as it trades during the same time frame as European markets. As I always say “we are eating this elephant one piece at a time.”
Ask anyone in any field, they will tell you that without patience and perseverance , you can never go anywhere (we cannot do anything without it). Whether you want to lose weight, eat clean, start a new business, or even being a parent requires a lot of patience. Being patient means we have to learn to be calm, even when things aren’t going our way. As hard as it is to exercise patience, it is one skill that everyone must possess, especially in this field of trading in the Financial markets.
When I look back at what I’ve been through in my trading journey, there were times when I really felt like giving up but I am glad I didn’t. A trader who lacks patience will always donate his/her money back to the Markets. Newbies to the markets do not really like to hear the word patience, all they want to do is to place that trade and make their profits. Professional traders do not trade every hour of every day and as a trader, you need to develop different types of patience for different situations.
1.Patience to wait for your perfect setup
Most traders fail even with the best strategies. They fail because they are not patient enough to wait for that perfect setup. If you always trade when in a rush and never plan for your trading sessions, you are only headed for disaster. Every business has a structure, I fail to understand why traders think it is OK to just trade without a proper plan or structure. If you want to be successful in this field, you need to learn how to plan and follow through with your own trading plan.
2.Patience to let your trade run for a bit longer
There are traders who are very patient to let a losing trade run for a few days while it depletes their free margin, but they fail to let a winning trade run till it reaches it’s targeted profit. All the above applies with every method of trading. In my method of trading planning is everything. I teach my mentees to be good planners and never to be random in the markets. Every business has some sort of structure and forex trading is no different. This was the shortest post I’ve ever written but hopefully you have gained something. I have just done my weekly trading plan and I am ready to face a new week with new possibilities and opportunities.
Thank you for stopping by. Please kindly share this post with your peers. To receive notifications on your email whenever I publish a new blog post, you can subscribe to the blog. You can also download my App on Google Playstore and have this content at your fingertips. Earlier today, I published a new episode on my Podcast titled ”Trading for a living, is that even possible?”. Till next time, cheers.
Addiction is a condition of being addicted to a particular substance or activity. In this instance we are referring to Forex trading as an activity. It is also very true that Forex trading can be easily turned into some serious gambling if a trader gets addicted to it. I have also seen that a person who has a gambling problem finds it challenging to succeed in Forex trading because gambling is all about crossing your fingers and just hoping for the best.
A person who gambles in casinos sees a slot machine whenever they look at charts and they get that adrenalin rush. Until they work on their gambling problem and overcome it, it is only then that they can see progress in their trading as well. I have had a few experiences with mentees who had a gambling problem that they had to overcome in order to start seeing great results in their trading. They all had similar challenges. This is not a fact, but just something that I have observed.
How Do You Know That You May Be Addicted To Forex Trading?
At some point in my life, I was also really addicted to Forex trading. I will list a few of my then issues and also most of them are the issues that most people struggle with. I will also share tips on how to overcome them. We know that addiction can cause unproductivity, break families, friendships or even ruin businesses and lead to debt. Forex trading addiction is NO different, it can do the same. Below are the most experienced issues.
You are constantly feeling like you might miss out on an opportunity if you take your eyes off your platform and therefore you stay glued to it the whole day. You treat your trading platform as a hang out spot.
You set your daily targets, but you can’t seem to stop even when you’ve made 5 times more, as a result, you always give all the daily profits back to the markets at the end of each trading day.
Every time you can’t sleep for whatever reason, you always go straight to your platform in the middle of the night to trade.
You are always checking out Forex forums or social media groups just to see what other people are trading and you follow everyone’s trades and disregard your own trading plan (if at all you have one).
You get super excited whenever you see anything with the word “Forex” in it and the word “strategy” excites you even more. You are always hunting for the new strategy. I went through all the above mentioned.
What Can You Do To Overcome it?
1.UNLEARN some of the things that you believe about Forex trading. You may be finding it easier to be addicted to it if you still believe that the more you trade, the more you make money.
2. Find something else to spend your free time on, get productive.
3. If you think that Forex forums/groups are contributing to your addiction, remove yourself so you can focus on your healing.
4. Avoid subscribing to every website that sends you daily signals, it can be really confusing and overwhelming.
5. Make up your mind and want the change, you have to want to change. You can do it, I know you can. I DID.
I hope these tips help. Thank you for stopping by. Kindly help me reach out to more people by sharing this post. Thank you and please take care of yourselves and stay safe.
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