Are You Trading Forex Trading to Generate Income, or to Generate Wealth?

The Forex Market is one that offers traders great profit potential; if handled incorrectly, however, the market can also produce elevated losses. In light of this, what is the best possible strategy to implement in your Forex system so that

profits can be maximized and losses minimized? The answer to this question is that it will depend; a strategy that works for one person will not necessarily work for another, and the reason for this is that people have different expectations when they engage in Forex trading. Usually, there are two reasons that motivate people to engage in Forex trading: generating income or generating wealth. Now, it might appear that income and wealth are one and the same, but the truth of the matter is that they are not, so be sure that you know what you want from the market, because this will be what ultimately determines the strategy, and the Forex system, that you will need in order to be successful.

Traders who are interested in generating income are those who expect to make a living out of the Forex Market; these people need to secure a minimum amount of profit every month to put up with their expenses as this is their sole source of income (or they want it to be). On the other hand, traders who are interested in generating wealth are those that do not need to secure a minimum amount of profit every month to cover expenses, but rather to amass a given level of capital for the future. It should be clear then that those who are in trading to generate wealth do not wish to make a living out of the market; they simply want to increase their wealth or estate thinking towards the future. Naturally, a person interested in generating income will require a Forex system that is different from the one that a person looking to generate income would require. First of all, an income seeker would have to work with short term trends and he/she would have to minimize losses at all costs. An ideal Forex system for an income seeker, then, would be one that focuses on low risk and low drawdown trading; your profit margin is smaller, but you are more secure and you make what you require to cover your living expenses. Now, if you are a wealth seeker then you can indulge in a far more aggressive Forex system; you can indulge in greater risks and you can follow long term trends. As well, it is important to point out that wealth seekers need not be so committed to trading (they need not engage in trading every day like income seekers), and they are able to wait for worthwhile opportunities, something that income seekers can seldom afford to do.

So, as it turns out there is no one strategy that works best for every person. It is important that you are clear o n what you want out of the Forex Market so that you can choose the strategy and set up the Forex system that works best for you.

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