How To Become Your Own Boss With Forex Trading

In Summary: 

  • Trading for a living may be your best bet toward financial freedom if you play your cards right 
  • While trading is risky, it is possible to control risk, grow your account and know how to become your own boss with forex trading

Can You Make Trading Your Bread And Butter? 

Forex trading has been around for centuries but only in the past few decades has it become the bread and butter for millions of people. In other words, people around the world make a living trading currency. If they can do it, why can’t you? 

Being successful enough to make trading your only source of income, however, comes with a certain level of focus, discipline, and strategy. More precisely, it requires you to have the right mindset and skills, for where you’re going is no place for the unprepared. 

Once you achieve these, you could soon be on your way to trading for a living. The dream for millions of people around the world, trading for yourself, with your money, is now closer than ever. After the pandemic swept across the globe, heading to the forex markets is one of the best ways to become your boss.  

How To Trade Forex For A Living

Let’s talk now about what it takes to make it in the game of trading. First of all, align your expectations to reality. Understand there are likely no shortcuts to financial success. And that going up the ladder will take effort, hard work, and patience.  

How to trade forex for a living

In practice, what defines success in trading is simply opening positions and closing them in profit. A simple action of a few clicks. What’s behind it, however, is the part that makes you a champion.  

Read as many books on trading as you can find, watch interviews of trading legends, and analyze the charts for technical patterns. Couple these with becoming a news buff so you can be in line with all that’s moving markets.  

There’s also the part where you master your emotions so you obtain the right trading mentality.  

Only then can you make informed and educated decisions as to which forex pair you want to buy or sell. In short, trading successfully comes as a result of your actions long before you go to the market.  

What’s In A Typical Trading Day? 

Day traders who work from home usually spend a lot of hours in front of the screen. This said, it’s essential that you love trading for what it is, not for what it could get you. Otherwise, you may lose interest and give up sooner or later.  

Typically, a day of trading is different for everyone and no day is like the previous. There are, however, certain key elements you can implement into your day to become a better trader: 

  • Read the news – this step, known as fundamental analysis, is arguably the first thing a trader does each day. In order to maintain an edge in trading, you have to be ahead of the curve. You do this by following the news and virtually knowing all that’s happened and all that’s to come.  On this front, you need to be aware of any major news that could rattle the market. It could be a Federal Reserve decision, or the latest non-farm payrolls report. Regardless, make sure you know what’s about to unfold not only for the day, but for the week, and even the month.
  •  Follow the charts – analyzing the charts, known as technical analysis, is your trading canvas. You can draft ideas, sketch potential moves, and draw certain patterns you expect to see unfold. In other words, observe the charts to try and spot where a trend may form or reverse. Watch for double tops, use indicators, and all other helpful tools to help you identify entry and exit points.
  •  Work on your skills – there will certainly be a time when you find yourself idle. Trading doesn’t always need constant monitoring of news and charts. It’s important to note: if you don’t see anything to trade, don’t trade just for the sake of having positions. Instead, use the free time to read more books on trading, watch interviews of successful traders and investors. Or work on your trading mindset by schooling yourself on trading psychology. 



Get these three habits right and you’ll be on your way to growth both in trading and as an individual.  

Position Yourself Correctly 

The way to forex riches is paved with small but important decisions. To this end, if you align your goals with reality, you could be getting closer to trading success with each new day. Let’s say you want to double your money in a year.  The best way to approach your goal is to break it down into smaller milestones. In other words, stick to a plan. A plan could include deciding what you will trade, when you will trade it, and by how much.  

In this case, doubling your money could be done in many ways. One way would be to get a 10% return on your equity from 10 different trades. If you divide these into the year, it will take 10 trades for your account to double. Or you could pursue a 5% return on any given trade. This way, you will have doubled your money on your 20th successful trade. So, how do you get to 20 profitable trades a year that can return 5% on equity? The answer is: use stop-losses and limit orders.  

What’s In A Successful Trading Plan? 

  1. Design a plan, create a strategy, and make sure you have the discipline to follow through. 
  2. Successful traders always know their entry and exit points before they open their positions. Analyzing your approach to market before you pull the trigger and buy, or sell, will make a huge difference in your trading results.  
  3. To give an example, let’s take a popular currency pair like the EUR/USD. You believe the euro will rise against the dollar and you want to open a long position. A correct approach would be to see if any upcoming news (fundamental analysis) could suggest an upside move, or at least an increase in volatility.  
  4. Then, you have to analyze the pair’s price behavior (technical analysis). This would mean looking for possible points of trend formation, breakouts, trend reversals, or other technical patterns. What you should do next is to decide how much you want to risk and how much you expect to gain.  
  5. And here, one extra pro tip: let pips lead your trades, money will follow.

How And When To Enter The Market

To elaborate, before you make the final click and enter the market, pick an amount to invest, and set your stop loss and limit orders. A stop-loss is the amount you are willing to lose if your trade goes against you. The level of stop-loss depends entirely on you and your risk tolerance. If you have a higher risk appetite, you can use a wider stop-loss.  

In other words, if your entry price in EUR/USD is 1.1450, you can set a stop-loss way below that level. In contrast, if you are risk-averse, you would use a tight stop-loss near your opening level.  On the other hand, a limit order (also known as a take-profit) will grab your profits and automatically close your trade for you. Once the trade goes in your favor, you can set a desired limit order wherever you feel like you’ve had enough.  

If you are long-term oriented, use a wider limit order for more gains. If your trade is short-term, opt for a tight limit order to secure a profit sooner.  

What’s in a typical trading day

Summary 

Becoming your own boss with forex trading is certainly not easy, but it’s definitely rewarding. If you truly love the markets and have a passion for trading, you should take it seriously and consider becoming a full-time trader from the comfort of your home.  Where trading was a privilege for institutional investors years ago, the financial markets are now buzzing with retail traders. Coordinated efforts on social media and online chat boards have yielded handsome rewards for many self-directed investors.  

In addition, once you get the hang of trading, you will experience the thrill of watching your portfolio grow. As you become more educated, more disciplined, and more present in the market, you’ll be well on your way to forex success.  

FAQ

Can You Trade For A Living?
What Does A Trading Day Look Like?
What’s A Good Trading Plan?

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**Risk Warning: Trading leveraged products such as Forex may not be suitable for all investors as they carry a degree of risk to your capital. Please ensure that you fully understand the risks involved, taking into account your investment objectives and level of experience, before trading, and if necessary seek independent advice.