I think that the most important thing in trading is to not be attached with money. Once you realized that the money you are throwing away due to bad trades, is money that you need to feed yourself, you become attached to it until trading becomes impossible.
Remember that trading can be tough. Its a mental game. And a lot of decision making involve. It also takes a toll on your mental health. Look at Jesse Livermore. Before you can really say “Fuck You Money!” ignoring its value and not be attached to it, I think you have to invest your money.
But I think, investing has its merits as it gives you more security on your financial future, should you have a lot of losing streaks in trading. Investing gives you residual income.
Investing can be fun for those who likes big big gains over the course of many years. For a trader, it might not be an attractive proposition. You literally have to wait a lot of years for it. But I think, investing has its merits as it gives you more security on your financial future, should you have a lot of losing streaks in trading. Investing gives you residual income. Stock dividends, real estate rental properties and brick and mortar business. It might not be a huge business or huge profit, but over the course of the year, it will compound. Slowly but surely.
Planning your financial future and before getting into forex trading, fix your finances first. Invest a portion of your money to passive income, have an emergency fund and the rest goes as your trading fund. I think that is the best course of action to take.
Just a quick note. If you’re going to invest your money in mutual funds or UITF, I’d rather not put it there. I think its a redundant thing. Mutual fund managers trade with the money you gave them, but you are already trading, you don’t want your investment money to be traded. Not to mention the high fees. You want it to be invested. I think buying the index as an investment is the best way to go.