Page 111 - Ultimate Guide to Currency Trading

investment's reaching high returns with uncorrected assets, with the total effect of making your
investment portfolio safer and less a victim to the whims of the markets.

Good Intentions, Expected Results

You should go into your trading career each trading day with good intentions to get to the dollar
amount of profit you need. If you know that you would like to generate $550 a month to pay for your
Mercedes E350, then get the calculator out and see just how much a day or week that really is. If you
consider that there is an average of twenty trading days in a month, then you need to earn about $27
a day or $135 a week to get to your goal.

When you look at it this way, the monthly payment on your Mercedes can seem easier to
achieve. Your $550 a month in profit equates to a $1,000 account, traded at 10 percent of its value,
using a 50:1 margin and making two 0.5 percent trades a day. Keeping these numbers in mind to get
to your Mercedes goal, you could easily trade only two hours a day to build up enough profits to make
your monthly withdrawal to your bank account, and then make the car payment.

If your only goal is to pay for the Mercedes, then you should trade in a manner that reflects
this intent. In this way, you are trading with a goal: You can get into trades that will yield you the 0.5
percent that you need, and you can walk away from the ones that offer less of a yield. You can also
walk away from the trades that promise more, but are offering that return at considerably more risk.
Remember, your goal is that $550 a month. If you are risking the principal in your account to earn an
additional $550 by taking on big gambles, then you are not investing with good intentions and you are
not going to get your expected results.

Many people currency trade every now and then, with no real goal in mind. If you
are this type of FX trader, that is okay! You are most likely a recreational trader who
enjoys the thrill of trading without the stress of making your nut or even having a
Essential
daily minimum profit goal.

It should not be a goal to earn as much as possible in your 'currency account. This is not a goal!
Think about it: Where is the governance in such a plan? What would you use to gauge if a trade were
too risky to take? When would you have the knowledge to walk away from your trading desk following
a series of good trades? The answer is that making the most money is not a goal, and in fact, it is an
unachievable goal. A goal such as this will lead you to take on more and more unnecessary risk, and
will lead you to blow up and whittle your account away to nothing by overtrading your account and
chasing too high returns. Steer clear of such a goal for your FX trading.

Professional money managers know that people will only give them cash to invest if there is a
long history of slow, steady returns. Sure, everyone likes to romanticize about the mutual fund
manager that made 70 percent last year. The real test is if that fund manager can do it again, without