Let’s say, after a year of producing perhaps humble but consistent profits: what do you do, start saving and investing in other areas of finance / business, or put it all back into growing your account balance exponentially?
Problem I see with that approach is, all your money is always at risk of your revenge trading. I’m afraid as heck of maybe extracting a $100k in wealth from the market, in the future, after 2 years of work… and then losing it quickly, which has happened in the past with smaller amounts both in financial trading and sports betting.
The possibility of growing your account exponentially through the right system also means risking the same as always in terms of percentage. If you know about statistics a little bit, which you should if you’re trading, you’ll know what I mean.
So what are your ideas for the long run? Do you even have any, or you’ve only seen your forex trading career as a short term thing?
I’m basically talking about the fear of keep risking when you’ve built up a profit.
I’d love some opinions from more veteran traders. I know I should at least make a yearly minimum wage before I start worrying about this stuff but I do tend to overcomplicate stuff. Thanks a lot!
I’ll start of by saying that I am not a pro or veteran forex trader.
But let me share you my long term view/strategy.
It is pretty simple and straight forward but my forex gains are pretty consistent and growing. My skills as a trader are becoming better and better through learning, reading, testing etc. Eventually I’ll have enough capital (money) to invest in real estate to create a passive income.
Let me tell you as wel that I am a student finances, insurances and real estate (Belgium) so I have the knowhow and knowledge to be confident in my plan and its execution. A big part of my family is active in the bank/real estate/investing sector so I’ll have enough support and help if needed.
Another thing that I am busy working out (the juridical aspect) to start a private fund, because my father wants me to manage his real estate investments in return for a commission (and inhereting everything).
The risk factor is something I can happily live with after all that is what got me attracted to forex. I work better under risk and stress environments and the need to keep track of everything. A reason for re-investing in real estate is that the risk is relatively low (compared to forex) and you will be able to make consistent returns and profit on the long run while forex is something to keep track of week by week.
So I do not really fear risking my profits eventually that is the risk we all take, don’t we?
So in short, the end goal is to use forex to invest in real estate (passive incomes) and funds. To eventually use some of the income for forex and so on.
Hope you found it interesting and good luck in your endeavours!
Like most people do, I took a drop in income when I retired so my immediate ambition is to make a profit equivalent to the shortfall between my occupational pension and what my salary used to be. Any excess gains will stay in the account to compound it.
Thanks you your detail discussion. I am as a new trader appreciating your efforts. However, as I am not so matured trader I still favor short term strategy as I want capital preservation and liquidity first.
@cup243 i treat my trading account pretty fluidly. I will pull out a couple grand here and there, but am also consistenly depositing into it with income from my salary job as well as being consistently profitable and growing the account that way. You should only be risking small fractions of a percent on individual trades, so there shouldnt be any added risk of keeping all of the funds in the account, or withdrawing small amounts as needed. The bigger issue with withdrawing is that it hurts compounding growth. As long as you are consistently profitable without huge swings in your PnL, then this shouldn’t be an issue on your mind.
If you know about statistics a little bit, which you should if you’re trading, you’ll know what I mean.