To run a successful Forex business, you'll need to have a realistic understanding of what it is, and what it isn't.
There are many misconceptions about Forex trading being perpetuated online, and it's important that we clarify some of the most crucial ones before we continue.
This will set your expectations in the right place, and help you avoid unproductive behaviors down the road.
Truth #1: Forex trading is not a job
With a job, you show up on time, put in the hours, and get paid at the end of each month.
Running a Forex business is nothing like this - it's not a job. You are not a worker.
You're an entrepreneur, and entrepreneurs don't get paid regularly (if at all) while building a business.
The payoff for running a successful Forex business is large, but it only comes a few years later.
In the meantime, you won't be making much money at all.
So don't get into this business expecting it to provide a livable wage within 12 months of starting out.
Building a valuable Forex business takes time, and you should only be attempting it if you're not under pressure to make money right away.
Truth #2: You won't be making 1% a day
A common goal among inexperienced traders is to achieve a return of 1% per day.
At first glance, this might seem like a reasonable target... but the truth is that those who aim for this target don't understand what it means.
You see, 1% a day on $10,000 = $1.98 trillion in just 8 years.
That's 18 times the total wealth of Bill Gates.
It's simply not a realistic goal.
A more reasonable target is an average return of 2 - 4% per month, which brings me to my next point...
Truth #3: It takes money to make money
Even with a $10,000 account, you won't be making more than a few hundred dollars per month on average (if you're doing things properly).
This means that unless you can afford a $100,000 account, the only two ways to make decent money in this business is to (1) take on investors or to (2) offer a trading service.
We'll talk more about these two paths in the next section.
Right now, you might be apprehensive about involving others in your trading. That's understandable.
But the blunt truth is that if you want to make any decent amount of money, you can't do it on your own - you'll need investors and/or customers. Preferably both.
That's why this is called a Forex trading business.
When you combine:
- The financial leverage provided by brokers,
- The capital leverage offered by investors, and
- The income support earned from customers,
... you get a rapidly growing trading operation, and a rapidly growing income.
Truth #4: Building a business takes time
No solid business is built overnight.
Research and development takes time. Cultivating investor/customer relationships takes time. Compounding capital takes time.
Before you can make a decent income, you'll have to invest at least 2 years into setting up and building momentum.
Thankfully, this is not a labor-intensive business so it's something you can do part-time on the side.
It won't be easy, but it's certainty easier than almost any other type of business out there. In terms of effort-to-reward, you'll rarely find any other business that's more worthwhile.
Now if you're ready, let's move on to the next page where I'll explain how a real Forex business works.
Continue to the next page
Forex Trading as a Business: The Business Model
About the Author
My name is Chris Lee and I've been a retail Forex trader since 2005. I've gone through many successes and failures, including managing a 7-figure investor account (which was great), and losing a 6-figure personal account (which was not great).
You can check out my latest performance results here.