Forex Trading as a Business
We all have our personality quirks. My quirk is collecting quotes. I have quotes in my trading log, in my success notebook (I will discuss this in another post) and even in my golf bag. One of my favorite quotes is “Act as if!” Act as if means that while you are in training to be a successful currency trader (my definition is one that makes consistent profits no matter the lots size being traded) you have to act as if you were already a successful forex trader.
So I began following and speaking with successful retail spot currency traders to gleam some insight into the characteristics of successful forex trading. Unlike those dentist commercial were 9 out of 10 recommends a product, 100% of all the forex traders I have spoken with said treating their forex trading as if it were a business was a key component of there success formula. In addition to merely treating their activities as a business, that their trading was done through a legal business structure. Businesses have plans, projections, profits target and capital spending; and so should your trading. All the FX traders I emulate trade through corporate entities, and now so do I!. If that is the path to success, then I am going down that road also and TRADE as if I were a business with all the planning aspects and legal framework associated with that action.
The tax code in the United States is generally established to collect tax from the employees of businesses and not the business themselves. Case in point, we as individual tax payers pay our taxes THEN expenses with after tax dollars. The business pays for expenses and THEN is taxed on the remaining amount (if any). Forex trading through a business entity makes sense from a tax standpoint; after all it is my business!
I am not a legal or tax professional, but I discovered that of the many structures to becoming a legal entity that there was one that fit the bill of turning my forex trading into a business perfectly; the Limited Liability Company, as a matter of fact I trade with my broker and educational company, FX TRAINER, as an LLC.
There are essentially 4 main business frameworks:
Sole Proprietorship
Partnerships (General and Limited)
Corporations (C- and S-Corporation)
Limited Liability Companies (LLC)
LLCs offer many advantages including:
No lists of advantages are complete without a corresponding list of disadvantages including:
All in all, there is never any substitution for seeking professional legal and tax advice in forming a business entity. There are many factors associated with developing a sound business framework such as; location, estate planning and other assets, but one thing is for sure, forming a business plan and trading currencies as a business is another directional sign on the road to successful forex trading.
For more information please visit FX TRADE CENTRAL as well as the following links:
Anderson Law Group http://www.alglaw.com/
Success DNA www.successdna.com
Nolo http://www.nolo.com/
Inc, Guides www.inc.com/guides/start_biz/20676.html
Happy Trading!
The Forex Educational Roadmap
To Roadmap to Successful Forex Training is broken down into 4 sequential destinations:
1. Education
Education is the key to understanding the forex market and mastery of the necessary skills to become successful. There is no substitute for hard work and dedication here and no short cuts as well. The best site by far is FX Trainer. I have found no other organziation that can so effectively grow and continue to provide igh quality training as you grow as a forex trader. Their community of traders are unmatched. You get to meet traders from all levels and gain from their experiences. That is an asset no trader should be without!
2. Personal Self-Mastery
Personal mastery is bringing balance into all aspects of your life to achieve the necessary harmony which will heighten your education and bring a razor sharp mental focus to all your trading activities. Personal mastery will go a long way in developing your FX trading psychology and philosophy. Two books are must reads in this category; Think and Grow Rich and The Power of Full Engagement!
3. Forex Systems and Tools
One could be the best ditch digger, but if you only had a spoon to dig with your ditch would not be nearly as successful as another one with a back-hoe. Developing a comprehensive trading plan and philosophy will be a critical step on this portion of your journey.
4. Live Forex Trading
Demo accounts and simulated trading is good, but nothing is a substitute for live trading. It is only through live trading that you can accurately assess your skill and balance in mastery of your previous roadmap destinations. Remember, there is no such thing as failure, there is only feedback! This is a personal preference. Open as manay demo accounts as possible and go witht the broker you feel most comfortable with. Just make sure the broker is regulated by CFTC and NFA.
5. Continuous Education and Training
In forex trading, as in many aspects of life, many individuals quite before achieving their desired level of success. It has been said that, like a flower, if an individual stops growing and learning, the dying process has begun. Having a true thirst for knowledge is a guarantee formula for success.
I have dedicated my website FX Trade Central to provide a holistic approach to forex trading education. This site highlights my roadmap to Successful Forex Trading!
When I was growing up in my native New England, USA, my parents, like all parents of my generation, focused on the value of obtaining a college education, transitioning into a "good" job and retiring to a comfortable pension. So I went to school, got good grades and transitioned into a that "good" job. Then something happened, something my parents never prepared me for; I was climbing the corporate ladder and realized that my ladder was against the wrong wall! The economy crumbled and even though I was never downsized, I watched friend after friend get told their services were no longer needed. I listened while my friends struggled to come to grips with the anxiety layoffs create, the decision about work and family, and even more important the psychological damage that was being done as my friends discussed their options. This caused me to pause and reflect.
Do we have any control over our futures? That was the question. I came to the conclusion that working for others was turning over the power to control the outcome of our lives to our corporate managers. As glamorous as having a nice career seemed, we were essentially trading hours for dollars and in reality had only minor control over our future. It was then that I realized that I was never satisfied with my career, because in this Information Age we have less control over the outcome of our careers. Change was happening rapidly and it was time to take action. We needed to leverage ourselves or we were going to be leveraged by someone else! The world our parents lived in no longer existed. Pensions are dwindling, 401K's are only a partial solution and no one is training the personal financial skills that are going to be required to flourish in a global economy. That is when I decided to begin replacing my earned income with business and passive income. I decided to exploit 5 wealth vehicles to allow myself to re-gain that control and provide a degree of freedom for myself and my family. Trading currencies is on top of this list.
This blog will take you with me on my journey in leveraging the forex market. The forex market offers great leverage and opportunity to to succeed in any market conditions. There are countless sites that can explore the technical side of the forex market. However, this blog will share the softer side, the side that I have found that few people talk about in great depth, but have the greatest impact on your journey in becoming a successful trader, the mental and educational aspects of currency trading. I screen and publish the information I receive on FX TRADE CENTRAL. You can always email me direct!!!
Join me as my co-pilot in our journey to forex trading success!
