3 Keys To Wealth Creation In Trading Forex- Going

Posted in: Trading,Forex in zonehitz's Blog

Apart from lending friends and clients a willing ear to hear out their tales of woes and their losing trades, as a certified financial planner, I always try to seek out their root problems and propose solutions that pertain to their special investing positions.

After all, each trading individual has his own risk tolerance, capital allocation and most of all an objective or goal in trading.

But however you look at it, irrespective of their time frame of investing, behind all their trades lies one main objective...and that is

TO CREATE AND INCREASE PERSONAL WEALTH

This is always a noble objective, and hundreds if not thousands of people worldwide have proven that forex trading is indeed capable of being turned into a generator of income. We find forex traders who actually trade for a living.

There are both full time traders and part time traders who not only utilize this economic activity of forex trading as another source of consistent income, but some have actually created full time careers as out of trading, and have become professional traders.

The path to wealth creation by way of forex trading is not free from difficulties, as any experienced trader can tell you. The market has a way to play "tricks" on you when you are least expecting it! For example, just when you think the market has bottomed out and ready to make a turn upwards or to rally, it will strangely turn down again.

Traders call their attempts to decipher the market moves as "forecasting" the turns, but I would rather call it " fine tuning the forex trading machine".

In wealth creation, 3 main factors are really important.

Firstly, you must have a method or technique that is UNIQUE and proven to generate you the gains more than losses when you follow it or use it. If the majority of a group of traders are using a common trading system with common indicators and are NOT making money, the only reason you can gather is that their trading system is so commonplace and definetely not UNIQUE, and worst is not generating profits for those who follow it. It therefore pays for you to be in the more knowledgeable minority group who uses UNIQUE trading methods to make their money in trading the markets.

Secondly, that technique must be able to add VALUE to your capital that you employ in trading. If that technique consistently leads to losses, eroding your capital, then you need to drop that method or trading technique like a hot potato or to get a professional or a mentor to check out what is wrong with your technique, and to tweak it.

I have known some traders who kept on trading on very flawed trading techniques and consistently losing money. Worst, some of them think it was because of the lack of practice that was causing their losses, and so they practised on a trade simulator and redo their strategies on a forex strategy builder, without knowing that all the while, their trading technique or methodology was flawed and incapable of adding value to their capital.

Thirdly and finally, the trading activity must be capable of allowing leverage to be applied, so that you can conduct a heavier trade with a small amount of capital. In other words, are you making use of leverage in your forex trading? Do you trade on an account with a broker who allows you good margin terms, or allowing you to earn money from referrals and so on?

When you pause to consider how you are trading today, be honest with yourself and check yourself against these 3 simple principles of wealth creation in forex trading. If you do not measure up, it is time to review how you trade and take affirmative action to convert yourself from a mediocre trader to a successful and profitable forex trader. The way to being successful lies in your hands today.