Trading forex can be very profitable and you can earn money quickly. Here is how.
My trading forex story begins like this: I was so tired of “opportunities” that end up taking nothing but a lot of time and money out of my pocket while gaining nothing except lost time and money. Don’t get me wrong, I was willing to put my free time into something that is real.
The forex market offers more opportunities for quick financial success and financial ruin too than almost any other market. The crowds have always been attracted to it. They include speculators, trading novices, retirees, and professionals looking for a way to get out of debt, increase the excitement in their lives, or simply get rich real quick. I’m one of them.
If you have a computer and an internet connection, you can trade forex from anywhere in the world, it is the best home-based business of the 21st century. But the problem is that most people don’t know how to trade forex.
Learning forex trading is not easy
It requires time, patience, and sustained effort. Most people lack the time to learn forex trading. I wanted to become rich. And the first lesson I got was: I have to fail and learn from my failures. I know that most people fail but do not learn. The skills of the trade aren’t like taking a diploma and slowly walking on the path of your career. In trading, when you “advance”, you don’t even know if you’re making progress in the right direction.
When the results show otherwise, it’s so hard to admit that the past months or years of “progress” wasn’t that at all. And after admitting that to yourself, you need to learn from it. You have to put your ego aside. Trading without emotions is a MUST.
Have you ever heard of someone turning a $100 starting capital into $100,000? Maybe you have. Well, such stories were and still are very rare. You really must have the full picture.
I have to tell you some big truths.
Trading forex is not a shortcut to instant wealth.
The old saying “It takes money to make money” is a precise one, Forex trading including. What would you have to do to start at $100 and have a trading account worth $10,000 a year later?
Almost any pattern of gain or loss is theoretically possible on the forex. But return on investment (ROI) calculator shows you that to accomplish this, your annual rate of return on investment needs to be 9,900%! If you enter and close out one trade every day of the year, the average profit on each trade would have to be at least 464 percent on those 100 bucks! You’d have to more than quadruple your money every day to come even close to $10,000 at the end of a year.
Does this sound like something that’s happening in the real world?
There’s something so deceptively rational. The idea to start with $100 and turn it into $10,000 needs to be shown into return rates to show how absurd this really is. It may be theoretically possible, in reality, it’s no more likely that your cat is starting to fly.
No matter what you were told, you have to know that your starting capital is the place to start. Having a good starting capital can help you to set your trading goals, define your risk management, and adapt your trading system and position management around your starting capital.
For many traders, a starting capital of $10,000 should be a good starting point. Depending on other factors such as leverage you can start making profits for as little as $10,000.
The math for trading forex
Assume you start trading with $30,000 and you can risk on each trade is $300 (1% of $30,000). You use 4:1 leverage, which gives you $120,000 in buying power (4 x $30,000) and utilizes a strategy that makes you $0.21 on winning trades and you lose $0.12 on losing trades.
A good trading system will win 60% of the time. Your average is 5 trades per day, so if you have 20 trading days in a month, you make 100 trades per month.
60 of them were profitable: 60 x $0.20 x 2300 shares = $27,600
40 of them were unprofitable: 40 x $0.13 x 2300 shares = ($11,960)
Let’s say your cost per trade is $20 (to get in and out). Your commission costs are:
100 trades x $20 =$2000.
If you pay for your trading platform or exchange entitlements then those fees are added in as well.
That means, you can make approximately: $15,640 – $2000 = $13,640 or about a 45% return per month.
Return on a single trade
As your account grows, your position size and your income will become larger.
Thanks to the availability of leverage, forex traders can make a return on a single trade. When multiples of the margin they used to open the trade. But, leverage is a double-edged sword. It can also mean big losses. Reliance on excessive leverage as a strategy typically leads to the destruction of your account capital in the long run. This is because it only takes one adverse market move to drive the market far enough and trigger losses. You need to view forex like you would any other market and expect normal returns by using conservative amounts of no leverage.
Websites that propose big and fast returns, to start with $100 and turn it into $10,000 in a short time, or imply that you can somehow get rich quick on the forex starting with very little are openly speaking frauds.
What you can do?
In the last few years, many pro traders have started their own forex signals services that provide trading signals to their subscribers via email and SMS.
Copy the trade of these pro traders onto your own account the instant they are made.
Now, what this means is that the pro trader is going to do all the market analysis, decide which currency pairs to trade and when to enter and exit the market. You don’t need to do any of the stuff above.
Follow elite traders when trading forex
At the same moment when pro-trader makes the trading software will instantly copy that trade onto your trading account.
So, if the pro trader makes a winning trade, you also make a winning trade and if the pro trader makes a losing trade, you also make a losing trade.
Try the best forex signals service in your opinion on your demo account. Install the trade copier software and start copying the trades made by the pro trader.
At the end of the month, evaluate the performance of the forex signals. If not satisfied, go for a refund. After several tries, you will be able to find a good forex signals service.
Most pro traders make around 1000 pips per month. 1 pip on a standard account is equal to $10. 1000 pips per month mean making $10,000 per month.
Voila! You earned your $10.000!
But before all, make sure you test the signals for at least two months on your demo account before you start trading live.
And you should know some basics of forex trading. You can learn that online for FREE. Most of that information is available for FREE.