Guy Kawasaki, the celebrated author, and marketing specialist, once said that the most challenging part of being an entrepreneur does not reside in coming up with brilliant ideas, but rather how you choose to put them in motion.
Although many attempts have been to scientize entrepreneurship, the first-hand experience proves it, times and times again, that a successful entrepreneur knows when to allow numbers and cold data to lead the way, and when to listen to his or her instincts.
The foreign exchange market, or Forex for short, albeit complex and sometimes, hard to digest, can a be a lucrative domain, and not only for experienced brokers or side hustlers but for entrepreneurs as well. A cunning adept of Joseph Schumpeter’s brainchild will always keep on open mind when it comes to pursuing profit-yielding avenues.
To this end, our article will showcase three of the vital trading secrets each entrepreneur must be aware of before tackling the foreign exchange market.
Focus on One Single Trade Session
While multitasking is a must-have skill for a successful entrepreneur, every forex newbies will discover that this rule of the thumb seldom applies to all aspects of online trading. Indeed, paying attention to several things at once during a trading session is mandatory, but it’s not a bright idea to have several sessions opened at the same time.
Let’s back up a little and explain the process. The first thing any trader does during an open trading session is to follow various leads, understood here as charts or technical indicator. This aspect is useful for keeping tabs on the progress of stock, bond, or currency pair, from opening to closing time, in order to see if it’s worth investing in it.
Currency pair traders, or those who bid on the pricing scheme of certain currencies, are used to operating fast-paced transactions since every second can make the difference between a lucrative enterprise and a sour loss.
Trade-wise, perhaps the soundest piece of advice for entrepreneurs who want to tackle forex is to focus only on a single trading session. Don’t try to bid blindly on two or three opened sessions because there is a high chance that this move will bring you on the verge of financial collapse.
Instead of this Gung-ho attitude, be more reserved and stick to what you know – it’s safer to thread on a stone bridge than on a rickety step-way.
Gut Instincts Matter Less than Charts
During our introduction, we’ve mentioned that one of the skills an entrepreneur must master is knowing when to rely on instinct. Despite it not being a scientifically sanctioned instrument, gut feelings have been the cornerstones of some of the most profitable businesses around the world.
Perhaps one of the most cited examples out the is Bill Gates’ college drop-out. Although the numbers were against him and the chances of starting a successful business were slim, Gates still acted on his instincts, creating one of the most profitable ventures of all times.
The rule of the thumb here is to always pay close attention to your technical indicators and the charts. Alternatively, if don’t know when to bet on a stock or a pair, there are always the Forex MT4 Expert Advisors, automated investing algorithms, which can notify you as soon as a lucrative opportunity pops up.
Regrettably, when it comes to the foreign exchange market, decisions based on pure instinct, or emotional betting, as it’s called, is as damaging, if not more, as keeping more than one live session active.
By acting on a whim, many traders from around the world have lost everything they managed to gain outside of forex. One can certainly recall the tragic case of a Chinese farmer who wanted to get rich overnight by investing everything he ever owned in government stocks.
There’s certainly a lesson to learned here – however reliable an opportunity may present itself, there’s no such thing as a devoid of risk forex transaction. For every dollar, you make investing in something considered ‘safe’ there’s an equal chance of losing far more on your next transaction.
Create Your Own Risk Management Strategy
As stated before, the risk is something we have to come to terms with if we expect to survive in the foreign exchange market. Although risk-taking is part of every successful entrepreneur’s portfolio, when it comes to the entangled world of trading risk is the silent stalker that can either make you king or transform you into a beggar in one heartbeat.
Warren Buffet, an authoritative figure in trading and the science of economics, declared that there’s such a thin line between risk and reward that, most of the times, an outside observer isn’t capable of telling them apart.
In online trading, perhaps the most important lesson every newcomer must learn by heart is that devising an efficient risk management strategy is as important assimilating information about technical indicators.
And these tactics are less academic than one would be inclined to believe. More specifically, to be able to devise these strategies, one must ask himself one question: ‘what kind of individual am I?’ Your tactic, stratagem or strategy entirely revolves around the answer to this seemingly simple question. Are you a risk-taker or a risk-adverse individual?
Entrepreneurs with a taste for risky endeavor should teach themselves to rely on strategies that can potentially minimize losses. On the other hand, risk-averse traders should devise a method to incorporate new opportunities to their already lucrative venues.
As a parting thought, we can easily say that there’s a sacred trinity which governs the actions of each entrepreneur turned trader – never shift your focus from an open trading session, nix the gut instinct and pump up those rookie numbers and keep in mind that there’s no such thing as a clear line between risk and reward.