Forex trading can be a fun and profitable activity, but only when you take it seriously enough that you follow your own plan.
There are many reasons for this, which we will go into below, but the most important thing is thatwithout a clear plan, you can forget your intentions easily and end up slipping into an ‘anything goes’ mindset that can more likely lead to losses than good results.
Although some people can buck this trend due to their talents, it is not considered a good, regular option to not set out a schedule.
It is important to consider the risk to your capital and what you are goingto do with the money you have worked hard to accumulate in the first place. Although trading with Indian forex brokers can indeed lead to making good money on the side or as a main career, it should not be seen as a magical way to free money forever.
When you bear in mind that many people lose money doing this, it helps to sharpen your strategy, which is a good thing. Taking this on board when crafting your trades will help you to avoid quick ideas that may not be thought through all that well.
This can be a similar thing to excesses in life, such as alcohol or cigarettes or sweet desserts. Your doctor would advise you that everything in moderation is fine, and the same is true when forex trading– aif you go to the excess too often, you could end up losing more than you had intended and leave yourself stuck without a plan to fix it.
Ifyou have already made a plan, it makes it easier to deal with any problems that could occur when trading, such as surprise market volatility, which can wipe out the strength of one particular currency overnight.
This means knowing what you will class as a success and what you deem to be a failure. Depending on how much you are investing at once, losing 2% of your holdings overnight can either be a huge dent in your savings or just a few hundred rupees, and this can affect your decision-making process from there.
When you know why you are trading and why you plan to do it – from the time that you can put aside to make this work, to the resources and level of understanding that you are prepared to reach – you can be sure that you will be much closer to your goal of making trading with forex work for you.
Of course, it also makes it easier to abandon ship on certain trades this way. If you think that 5% losses is your cut-off point for any trade, then the moment that it reaches that threshold, you have made a deal with yourself to pull out. Sticking to this means that you are always in control of the situation and can manage any problems more easily.