Why Forex Trading Is The Best Business In The World

It should be obvious by now that trading is to me, more than just a way to make money (if you’re new here, check out the About page).

What’s probably less obvious though, is that I don’t consider myself to be just a trader.

You see, I really consider myself to be a life strategist.

To me, trading was never meant to be an end in itself, but rather as a means to a more meaningful, and fulfilling end.

This is a topic I could talk about for hours, but today I’m just going to focus on retail trading as a business model, and why I choose to focus my time and energy on it.

For most people, this is the best business in the world to be involved in.

Let’s see why.

Leverage

As mentioned in the Retail Forex Manifesto, a big reason for choosing trading as a money-making endeavor is the leverage that’s readily available.

If you tried to borrow $100,000 from your favorite bank to start a business with no track record, you’d be shown to the door faster than you can say “so will you loan me the money?”

Trading provides the lowest-barrier, most efficient access to “borrow” tens, or hundreds of thousands of dollars in your bid to make a profit.

And the only collateral you’ll need for that is a measly 1% – 2% of the asking amount. There is no other business in the world (not even stock or futures trading) that can give you that kind of raw borrowing power.

A decent trader will perform much better (profit-wise) with leverage, than a good trader without leverage.

Limited Downside Risk

One of the biggest risks of running a brick and mortar business is that you personally stand to lose (a lot) more than your initial investment.

If your traditional business doesn’t work out (for whatever reason), you may be personally liable for the debts of your business – including outstanding payments to your suppliers and contractors.

Imagine you’re running a store that sells custom-made furniture. You’ve ordered a whole bunch of raw materials (wood and steel), got your workers to craft a whole line of new designer furniture, and signed a 12-month lease for the storefront where you’ll be selling your works of art.

Alas, 6 months later you’ve sold only 3 chairs, the business is drenched in losses and it suddenly becomes clear that this business isn’t going to survive.

What are you options now?

Well, you could

1) Remain in operation, and pray.

2) Shut down the business, and risk getting sued by your suppliers, workers and landlord for not paying them like you promised. Your personal assets may be seized and sold to pay your creditors. You’ll most likely be declared bankrupt.

3) Quietly sell all your stuff and book a one-way flight to a faraway land, never to return.

The risks associated with traditional businesses are often too impractical for the average person to consider.

With Forex trading however, your losses are (99% of the time) limited to the capital in your trading account. Only under very extreme circumstances will you ever be at risk of losing more than that.

Flexibility, Adaptability, Survivability

Getting into business is the most likely way to attain wealth. Unfortunately, in the event that it doesn’t work out (which is 80% likely, according to U.S. statistics), the downside is often too painful to bear.

Now compare this with trading.

The moment you realize that a trade isn’t working out, you have the option to immediately stop the bleeding, and live to fight another day.

There is no waiting to liquidate your assets, no complicated forms to fill, and no impatient creditors to appease.

You have full control every step of the way. You have the flexibility to immediately alter your situation, if you choose to.

And in the worst case scenario, even if you messed up in the worst possible way, you may only lose the capital in your trading account – not a cent more.

Scalability

Compared to traditional businesses, the potential upside of retail trading is virtually unlimited.

If you’re a competent trader, your profit potential is limited only by your ability to handle a large trading account.

Some traders can’t handle an account larger than $5 million, while others can’t handle even $200,000.

Whatever the case may be, your profit potential will be limited by yourself, not external factors.

No Inventory, Staff, Bill Headaches

In trading, you only have 2 things to focus on: your strategy and yourself.

You don’t have unsold inventory issues, no staff-related troubles or bills to worry about.

Really… do you need more reasons?

Trading Will Never Go Out Of Fashion

As long as there’s an economy and a market, the money-making skills you pick up as a trader will never become obsolete.

It’s the best career insurance you can have.

Contrast this with the 3-4 years university students spend in school, only to find the information and skills they’ve learned to be irrelevant by the time they graduate.

We live in a fast changing world, but the skill of trading is one that will always remain useful.

Geographic Independence

A personal favorite of mine – you don’t have to be trading from a permanent location.

You can trade anywhere in the world with a stable internet connection, which renders constant travel to be a real option for you.

I’ve been to the Maldives, Lithuania, Hungary and Spain while trading, and I don’t intend to stop any time soon. My investment banker friends may be making more money than me (for now, at least), but I’m catching up (in terms of income) AND I get to experience the world while doing it.

You decide which you’d rather be doing.

Life > Trading

Life is not just about trading, but trading enables what I consider to be a good life.

In my travels, when people ask me what I do for a living, I tell them I’m a life strategist… because I firmly believe work and life cannot be separated – your work will influence your life, and your life will influence your work.

I am not just a trader – trading is just a part of my overall life strategy.

What’s your life strategy?

If you don’t have one, chances are that someone else is deciding it for you.

By |2018-11-15T04:59:20+00:00November 15th, 2018|General|9 Comments

9 Comments

  1. Eniola August 17, 2012 at 5:57 pm - Reply

    Hello Chris,

    The post is quite simple but actually the basic learning point for anybody who wants to and is really serious to trade for a living. Moreso, if proper strategies are applied, trading has the greatest tendency to give a good life to the most ordinary person.

    Have a nice time on your US trip.

    Regards

    Eniola – Lagos

    • stu February 3, 2016 at 4:40 pm - Reply

      Eniola,
      95% of traders may disagree because 95% lose money.
      Stu

  2. alfredo arcieri August 17, 2012 at 6:53 pm - Reply

    Excellent. Best way to have a good life and some money in your pockets !!

  3. Lukman August 17, 2012 at 7:39 pm - Reply

    Hi Chris,
    You have being a source of inspiration to me. Words alone not enough to express my gratitude. I love your posts and I will like to be more than just a trader.
    Pls, what can you tell me about the liteforex Company? Do you recommend it to traders? If not, could you please mention some forex broakers you recommend, most especially for Nigerians?
    Thanks a lot and more grease to your elbow… Kudos!

    • Chris Lee August 17, 2012 at 9:56 pm - Reply

      Lukman,

      I’m not familiar with liteforex so I cant comment on them. I’ve traded (still am) with Oanda and so far I’ve not had any problems.

      Just make sure that the broker is regulated by the appropriate authorities.

  4. Marc August 18, 2012 at 12:03 pm - Reply

    I would agree with you Chris. For people like you and me who know how to implement risk management and proper use of leverage it is the best business in the world by far. If you are really good you can operate trade rooms where people pay to get your views and calls (like I do) which is another form of income. You can asset manage too which is another form of income. You can teach novice traders by designing a course based on your own strategies, yet another source of income. You can open a news letter for subscribers. In fact the options are endless. The only caveat is you have to be “good”. People have to transparently know that you are good. After thirteen years of hard work and study I have achieved such a status where all this and more is now available to me. All I would add to your post is that it is no different than any other profession. It requires hard work and ongoing study to maintain your edge. You must pay the price to learn to overcome the obstacles that will stand in your way, no differently than starting your own business. Like starting your own business only a few elite ones will make it. We know that over 96% of retail FX traders fail. Same as small business owners. This is oneo of the hardest businesses you will ever do but if you are not afraid of failure there is no barrier at all to entry other than over coming the biggest obstacle to your success and of course that is “YOU” as the trader:).
    All the best.

    Marc

    • Chris Lee August 18, 2012 at 3:16 pm - Reply

      I couldn’t agree more.

  5. Mike November 11, 2017 at 6:21 am - Reply

    Hi Chris,

    Having mixed results and still not getting regular consistency using forex factory calendar and high impact announcements as a means of connecting fundamentals with the technicals for trading price action trades on the faster time frames. You have mentioned you use H1 or H4. Are they fast enough for what appears to be ‘scalping’ style trading or should I go down to M5 or M15? I would prefer to swing trade H4 or Dly but volatility often kicks my butt on the slower time frames, so attempting both. Using RSI,MACD and patterns only for indicators. As you suggested, no indicators on candles and taking candles on their merits. Thanks for all your encouragement.

  6. Best Trader January 5, 2019 at 10:58 am - Reply

    Great article!

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