{"id":95960,"date":"2016-10-04T07:48:31","date_gmt":"2016-10-04T11:48:31","guid":{"rendered":"http:\/\/countingpips.com\/?p=95960"},"modified":"2016-09-28T07:49:07","modified_gmt":"2016-09-28T11:49:07","slug":"9-best-steps-to-approaching-trading-as-a-business","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/10\/9-best-steps-to-approaching-trading-as-a-business\/","title":{"rendered":"9 best steps to approaching trading as a business"},"content":{"rendered":"
October 4, 2016<\/div>
\r\n<\/div><\/div>

By Admiral Markets<\/b><\/p>\n

\"pablo<\/h1>\n

Dear Traders,<\/p>\n

Most traders believe that they treat trading as a business, not a hobby.<\/p>\n

But how do you know if you are ready to do trading business?<\/p>\n

Today’s post presents nine fundamental building blocks of any serious approach to trading.<\/p>\n

Only the most critical elements like choosing the
\nbest software<\/a> are included.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Maybe your approach lacks solid business acumen or perhaps it’s already fit-for-purpose.<\/p>\n

Only one way to find out, right?<\/p>\n

\"Download<\/a><\/p>\n

Motivation and persistence<\/h2>\n

Your motivation is the motor behind the persistence needed to succeed in trading…<\/p>\n

…and many other things in life.<\/p>\n

The first step is to carefully think about why you want to trade the Forex and CFD markets.<\/p>\n

Begin by writing down your intrinsic (e.g. freedom) and extrinsic (e.g. a purchase) motivation on paper.<\/p>\n

You can also print it out, if you like.<\/p>\n

Now:<\/p>\n

    \n
  1. add visual reminders, like a drawing or an image of your dream car, island or house<\/li>\n
  2. keep that picture in front of your PC and around your home.<\/li>\n<\/ol>\n

    You will be able to draw on the above motivation during the consistent up\/down movement of modern trading.<\/p>\n

    A little bit of stimulation goes a long way.<\/p>\n

    But above all, be persistent \u2013 especially when dealing with tougher times.<\/p>\n

    Persistence will also be in high demand when you start working on your goals.<\/p>\n

    Your state, goals and closing the gap<\/h2>\n

    Goals can be seen as measurable units that break down motivation into actionable parts.<\/p>\n

    Whereas the motivation is a grand vision of the future…<\/p>\n

    …goals are more concrete steps that ultimately lead to your vision becoming a reality.<\/p>\n

    And while creating those goals, follow the well-known
    \n    SMART formula<\/a>, i.e:<\/p>\n

      \n
    1. specific: answer questions like who, what, where, which and why<\/li>\n
    2. measureable: enable criteria for measuring progress by answering questions like when, how many and how much<\/li>\n
    3. attainable: analyse whether you have the skills, financial capacity and abilities to reach your goal in the desired time frame<\/li>\n
    4. realistic: check whether you are able to work towards a balanced yet ambitious goal (too easy is not motivating, too hard is not realistic)<\/li>\n
    5. time-bound: set up a time frame and time table for the goal.<\/li>\n<\/ol>\n

      For example, the goal “I want to buy a new house” is measurable but not time-bound or specific.<\/p>\n

      So how do you make it SMART?<\/p>\n

      Conversely, a SMART goal would be to purchase a house with a:<\/p>\n

        \n
      1. minimum of 80 square metres in the neighbourhood W, X or Y<\/li>\n
      2. maximum price of EUR 200k<\/li>\n
      3. max 80% mortgage<\/li>\n
      4. before 2019.<\/li>\n<\/ol>\n

        Your software choice<\/h2>\n

        You need to choose software that supports your specific trading style in the best way possible.<\/p>\n

        The software choice is critical because it simplifies or automates trading decisions and actions.<\/p>\n

        For instance, the
        \n        MetaTrader 4 Supreme Edition <\/a>plugin from Admiral Markets offers more than 100 features and multiple advantages over other current market options:<\/p>\n

          \n
        1. simple trading: mini-terminal, trade terminal<\/li>\n
        2. charting package: charting tools and indicators, mini charts, tick charts<\/li>\n
        3. easy management: alarm manager, trading simulator, Connect<\/li>\n
        4. extra analysis: correlation matrix, correlation trader, sentiment trader.<\/li>\n<\/ol>\n

          Last but not least, good software offers the proven benefit of easy trading access, which is why Admiral Markets offers:<\/p>\n

            \n
          1. MT4 WebTrader<\/a> version<\/li>\n
          2. a cost-free demo account<\/a> to test software without risks.<\/li>\n<\/ol>\n

            \"Risk<\/a><\/p>\n

            Your trading plan document<\/h2>\n

            The
            \n            trading plan<\/a> is at the heart of your trading decisions.<\/p>\n

            It specifies how you will:<\/p>\n

              \n
            1. analyse trend, momentum, patterns, support and resistance<\/li>\n
            2. enter, trail and exit the market.<\/li>\n<\/ol>\n

              Basically, the trading plan details your approach to your Forex trading business.<\/p>\n

              For instance, I use the following concepts in my trading plan:<\/p>\n

                \n
              1. moving averages for trend and momentum<\/li>\n
              2. trend lines for chart patterns<\/li>\n
              3. Admiral Pivot Points<\/a> and Admiral Keltner<\/a> for support and resistance<\/li>\n
              4. Fibonacci levels and candlestick patterns for entries and exits.<\/li>\n<\/ol>\n

                Your trading plan enables consistency over time because otherwise your trading could vary every day based on your emotions.<\/p>\n

                My advice is to build experience with a relatively simple approach but
                \n                improve<\/a> when possible and avoid looking for the perfect system<\/a>.<\/p>\n

                Your trade management style<\/h2>\n

                Within each trade, you have an option to:<\/p>\n

                  \n
                1. manage the setup (active management); or<\/li>\n
                2. not change the original parameters of the exit (passive management).<\/li>\n<\/ol>\n

                  Actively managing a setup allows for a greater degree of control and precision, because you can change your exit depending on how price action develops, but:<\/p>\n

                    \n
                  1. it requires more of your time<\/li>\n
                  2. due to its high intensity, it is often tougher on your trading psychology (although this may vary for each trader).<\/li>\n<\/ol>\n

                    Passive trade management is also known as “set and forget” and offers the reverse pros and cons of active management (less precise but also less intensive).<\/p>\n

                    My best advice on trade management is this:<\/p>\n

                      \n
                    1. when starting, choose a passive trade management system at first<\/li>\n
                    2. then test, measure and monitor one (small) change to see if the plan improves (repeat process until ready)<\/li>\n
                    3. never change your trade management approach during a trade setup (always think before and after a setup and use data to measure its impact)<\/li>\n
                    4. apply a varied approach of loose\u2013tight trade management (see video below).<\/li>\n<\/ol>\n