A lot of new traders try to figure out exactly how to treat online trading. Especially when it comes time to quit your day job and start focusing on earning from trading it can be quite daunting. Even traders with 10 years of experience have bad and good months. The bad months are fewer and fewer, but they do still exist.
So how do you withdraw each month? The more you leave in your account the quicker you can grow it, but realistically you need and want to spend some of your earnings.
Every trader is different and will have different goals and requirements. So I will go through the basics of how I look at online trading as a business and talk you through parts of it so you get at least one option.
You really don’t need office space, but it can be nice to rent a small office somewhere so it feels like you’re going into work. For a few years I rented a small office close to the beach with a nice view. And I thoroughly enjoyed it. I had a couple visitors, offered training out there, but most of the time it was just a quiet place to trade from away from home.
I could not handle the traffic though and gave it up. The extra time each day by not travelling was definitely beneficial. So I made an effort to have a morning routine that I completed before I started trading. This could be anything from a walk to making breakfast etc. So every day, once I had my breakfast and second cup of coffee it was working time. And this allowed me to get into the right frame of mind. This will sound strange to those of you who have never worked from home, but to my fellow roll-out-of-bed-and-straight-to-work people, you will probably understand.
Trading tech – monitors and platforms
Now the big question comes up with monitors all the time, and how many you need. I need to point out at this stage that 1 monitor is plenty since most trading platforms will allow easy ways to jump between currency pairs.
That being said, I use 2 monitors. The main trading monitor is an ultra wide HD monitor, don’t worry, they’re surprisingly cheap. It’s running 2560×1080 which gives more width to the screen allowing me to see more history on the charts. See the above screenshot with 12 currency pairs in little windows. My second monitor is an old standard 16:9 VGA which I use to watch Netflix and I am not kidding. I found that if I focus on the charts every second of every day I get tired, I start feeling anxious about the next trading opportunity and I start to make silly mistakes and deviate from my trading plan.
Most trading software runs natively for Windows and not for Linux or Mac. So Linux or Mac users will have to get a Windows Emulator of some kind to run software like Meta Trader. PC users are spoilt. Meta Trader is a light weight piece of software and should run on just about any computer made in the last 10 years. Then you need to look at your internet connection. Trading forex does not require a high speed internet connection, it doesn’t even require a lot of data. The most important thing about your connection, is that it should be as stable as possible.
This is why a lot of people opt for an ADSL line over a wireless connection, because in many cases the ADSL is more reliable. This is region specific, so I recommend you chat to people you know in your area to find out what sort of issues they have with line dropping.
Businesses require investment
As with any business, Forex requires a financial investment as well as the time spent running the business. You can take any sort of business you might want to purchase. Let’s take a simple coffee shop as an example. Imagine you would go and purchase a local coffee shop. You would need to sign an agreement for rent and put down a deposit. You would buy over existing stock and sign agreements for additional stock from suppliers. There would be furniture, fittings and many other things that will have an upfront cost.
Luckily with Forex this is all consolidated into one payment of your initial deposit. And much like purchasing a coffee shop, the initial investment typically determines the potential income made. You wouldn’t expect a small 20 seater coffee shop to be able to compete with a 100 seater would you? The benefits with Forex as a business is that you don’t have massive monthly overheads. My only monthly costs would be internet and a small amount of rent. Even if you splurge out and get a large office with a view of the beach, your costs are still substantially lower than just about every other business out there.