Trading in Forex is not much different from most traditional businesses that we can find in our economy and it this case in a farmer. The intention with this article is to show that the main objectives and characteristics that define traditional businesses are also present (or should be) in trading.
In the managing of a farm we also have to worry about risk management, be patient, be disciplined and work following a given strategy.
The farmer the managing of his farm, he must first sow and after reap. Like the farmer you need to make an initial investment and then reap the rewards. This is the scenario that we have in forex.
The big problem is that investors want immediate returns. Often enticed with gains at around 2 digits a month, the investors make their positions with a huge leverage. These orders are unable to resist to a less favorable period. Here again we should follow the teachings of the wise farmer, sowing, go tracking progress and give due time to reap the harvest. This must be harvested at the right time, not before or after the due course. In our financial investments we should also avoid close our orders too early (to shorten the take profit) or close the order too late (to stretch the stop loss).
In conclusion, in the forex trading a major reason for failure is not respect the stop loss and take profit defined in the beginning. So, as the farmer we must harvest at the right time trying not to anticipate or postpone the closing of our orders.
