Tag: how to make money

  • Trading Bonds – How to Start Making Money

    Trading Bonds – How to Start Making Money

    Trading Bonds - How to Start Making Money
    A bond is a loan that the bondholder gives to the bond issuer. Governments, corporations, and municipalities issue bonds when they need cash.

    Trading bonds may seem unusual and difficult. But it isn’t. Actually, the whole process can be quite simple. Anyone interested in trading bonds shouldn’t have a problem getting started. You can find plenty of opportunities in trading bonds and the bond markets. But some things are special for trading bonds and bond markets. If you are not familiar with them, trading bonds might be very confusing. Honestly, it is important to trade bonds so let’s see how to do that.

    First of all, bond markets are much bigger than, for example, stock markets. One of the most important differences between bonds and stocks is that there is no exchange for trading bonds; it is done on the “over-the-counter” market but some kinds of bonds can be traded on exchanges. For example, convertible bonds are possible to trade on exchanges. Actually, trading bonds can happen anywhere where the buyers and sellers can make a deal.

    Trading Bonds: The participants in trading 

    There are two types of participants in trading bonds: bond dealers and bond traders.

    Traders can trade bonds among themselves, but trading is customarily done through bond dealers. Well, to be more precise, these places where you can trade bonds are dealers’ bond trading desks. Bond dealers are kind of intersection points. They have all types of connections available. Phones, computers are on their desks. But also, they are connected with some traders whose job is to gather all information about bonds, they are quoting prices for buying or selling bonds. To make the story short, these traders are responsible for creating the market for bonds.   

    Dealers and traders

    Dealers’ job is to provide liquidity for bond traders and make it easier to buy and sell bonds with a limited concession on the price. But they have some other possibilities to take part in trading bonds. Dealers can also trade bonds between each other. Sometimes they do so through bond brokers, meaning anonymously. Dealers make money from the spread between the bonds buying and selling price. This also the way how they can lose money.

    Bond trading can be very lucrative. That’s the reason why pension and mutual funds, financial organizations, and also governments are involved in trading bonds. When you have such powerful players in the market, it isn’t surprising that $1 million worth of bonds is small initial capital. The bond markets don’t have any size limit, trades may worth over $1 billion but also $100 million. That isn’t the rule for the institutional markets, there are no size limits for individual traders, also. Their trades are ordinarily below $1 million.

    Trading bonds strategies

    Trading bonds can be passive or active. Both approaches are legit and can produce you the gains.

    You can make money from bonds in two ways. You can invest in them and hold and receive interest payments after the maturity date. It is usually twice per year. That is a passive way of trading bonds.

    The other way to make money from bonds is by trading them. You can sell your bonds at a higher price than you bought them. For instance, you bought bonds at a nominal value of $20.000. After some time, their market value increases by 20% and you can sell them at $24.000. You’ll earn $4.000.

    Bond laddering is also one of the more active strategies and very convenient to start trading if you hold bonds with different maturity dates. You can use the profit from bonds with shorter maturity dates to buy bonds with longer maturity dates. This is named “income stream” and you don’t need a lot of money to use this strategy. It is pretty much economical and cheap. 

    Bond swapping is another active approach to trading bonds and very attractive for skilled traders. Where is the catch? Let’s say one of your bonds isn’t a good player and it is more likely a losing one, it’s not going to recover. Traders usually are selling these bonds to get a tax write-off for the loss. The money gained from the selling bond they reinvest in high-yielding bonds. That helps them to build a firm portfolio.

    The differences between the trading bonds and investing

    In trading bonds you are actually speculating on the price changes during a short period in time. You are buying bonds only when you believe they will increase in price. And vice versa, you are selling them only when you believe their prices will drop. So, your profit is coming from the bonds’ price movements. Trading bonds is also when you use the advantage of leverage. To be honest, that might magnify your profits but also, you may be faced with great losses. 

    Investing in bonds means that you are holding bonds for a long time. You decided to hold them whatever is happening and you are taking the risk to lose your money if bonds prices decrease. When investing in bonds the profit will come from interest payments. Further, on the maturity date, you will put down the total value of your position. 

    Should you trade stocks or bonds?

    Bonds and stocks are the most traded assets but in different separated markets. When trading stocks, you are actually buying ownership in some companies. When the company or companies are doing well, the value of your shares will grow.
    When trade bonds, you are actually lending money to the issuer of the bonds for a fixed period of time. For that you’ll charge interest. Bonds are often seen as safer than stocks. People use them as saving for retirement, for example.
    So, trading bonds is an investment strategy. You can use them as we mentioned above, but also, bonds are very useful if you want to diversify your portfolio.

    What to look out 

    Buying bonds can be a difficult path when you aren’t purchasing them right from the underwriter or you are buying used bonds. What to look out, how to know you’re making a good deal?
    Look out for the credit rating. It is important to know if the company can pay its bond. Standard and Poor’s and Fitch use a rating system that ranks bonds, the best quality is marked as AAA and the worst as D. Between these two marks you’ll find, in range of quality from good to less good, AA, A, BBB, BB, B, CCC, CC, C bonds.

    Further, you’ll need to know the bond duration. That is an indicator of how unstable the bond can be in terms of changes in interest rates. If the duration is longer, that means a higher fluctuation when interest rates shift. The problem is in the nature of the bonds. If interest rates increase, the price of a bond decreases. Also, be careful when buying bonds through the brokerages. They will charge you the fees. Check it before any bond-buying. Use publicly available data on the pricing of bonds, or bonds with equal maturities, interest rates, and credit ratings.

    Why trade bonds?

    Trading bonds can boost the yield on your portfolio. The yield represents the total return you’ll receive if you keep a bond to its maturity, but you’ll want to maximize it. The point is to sell bonds with lower yield and buying bonds with better. You are selling bonds with low yield and buying another to earn from the spread. For example, you hold a bond that yields 4,75% and you noticed a similar bond but it yields 5,25%. That is 0,50% more. So, you can sell your bond and buy this better yielding one and you’ll have a spread gain – yield pickup of 0.50%.

    Credit-upgrade trade is used when a trader assumes that a particular debt problem will be upgraded soon. When an upgrade happens on a bond issuer, the price of the bond will rise and the yield will decline. A credit-upgrade means that the company is marked as less risky. Traders want to catch this expected price increase and buy the bond before the credit upgrade. For this type of trade you’ll need some skills for credit analysis. 

    You might like to take credit-defense trade.

    It is very popular. When uncertainty in the economy and the markets increase, some sectors are weaker to fulfill their debt obligations. If you hold this kind of bond, just take a more defensive position. Pull your money out of that sector, don’t hesitate to get out.

    Also, you can trade your bonds to adjust a yield curve and change the duration of the bond portfolio you are holding. In this way, you’ll get an increase or decrease in sensitivity to interest rates, whatever you prefer. Keep in mind that the price of the bond is inversely correlated to the interest rate.

    The reason for trade bonds might be the sector-rotation. For example, you want to reallocate your capital to bonds from the sector that is supposed to outperform the industry or some other sector. If you are trading bonds in the same sector, one strategy could be to switch bonds form cyclical to the non-cyclical sector or vice versa.

    Bottom line

    To trade bonds, you’ll need an account. Choose your bond, when trading bonds, you can buy or sell assets from all over the world.
    Now, decide when you would like to open the position. Timing the opening and closing of trades plays the greatest role in how you are successful in the markets.
    Open your position by using some online trading platform. Determine how much you want to put on the position and do you want to go short or long. Add stops and limits orders.
    If your trade isn’t closed automatically by stops or limits, close it yourself to take profits or cut the losses. To calculate your profit or loss, subtract the opening price of your position from the closing price. 

    Simple as that.

  • How To Make Money By Trading Stocks?

    How To Make Money By Trading Stocks?

    How To Make Money By Trading Stocks?
    There are many ways of making money by trading stocks and numerous methods to find potential investments that match your trading strategy.

    It is almost normal wishing to make a lot of money in several months but do you know how to make money by trading stocks? Yes, it is possible. Everything you have to do is to make several high-risk trades buying stocks that are paying dividends. Simple as that. But it isn’t going to happen to all of us. 

    Someone can make fortune trading stocks in a short time. Some people can do that. But it is too risky. Honestly, when we talk about them we are actually talking about people who know how to make money by trading stocks. Others prefer other approaches. Many of them are less risky and safer ways to participate in the stock market. But still, it is possible to make a lot of money. That’s true. 

    Also, the truth is that some traders and investors got lucky but it isn’t a common story. Actually, it is the opposite. Most traders fail to make money on the market. So if you want to know how to make money by trading stocks you have to understand the nature of the stock market. We are not going to tell you the sad stories but what you have to know is that the stock market is a zero-sum game. Meaning, if someone doesn’t lose, you’ll never earn. Is that all? Of course not. There are more so, let’s see how to make money by trading stocks. 

    Can you make money by trading stocks?

    Why not? Thousands of people already did it and still do. Some are trading stocks every day or month but the others are more buy-and-hold types. They are sitting in the stocks for decades and today they are counting their millions. For example, risk-averse types will do that. They will choose some reputable company or the company with a promising outlook, good business plan, and stick it out for the long run.

    Also, there are some other approaches. You’ll find plenty of outstanding traders capable of making money through several quick but risky trades. Frankly, they are a minority. Great success in trading will come if you pick a day trading or short selling the stocks but it is connected to the extremely high risks. You’ll have to trade in the high-risk and volatile market. But it is one of the most important and usual features of the stock markets: they are volatile, they are risky no matter how strong or experienced you are. Let’s call statistics as help, only 20%, or even less, of traders, are successful when trading the stock market. The others constantly fail to make money.

    But this article is about how to make money by trading stocks. So, let’s go!

    As we mentioned above, one way is to adopt a strategy to hold stocks for a long time. At least five years, for example. If the stock pays dividends, it’s better.

    Quick ways to make money by trading stocks

    Making money by trading stocks, especially with a small amount, is challenging, and honestly, riskier. Of course, if you don’t know what you’re doing. But let’s try to be more creative.

    Certainly, it is ideal if you have more money to trade. But it’s not mandatory. The mandatory is to have the right strategy that works for you, to have a trading plan and trading journal. If you are a beginner in trading stocks, start modestly. Try with small amounts, test different approaches, and methods. After you did it, monitor, and examine the result you got. Don’t think about obtaining the fortune overnight. That’s not going to happen. 

    The smartest thing you can do is follow some of the rules and methods on how to make money by trading stocks and place a small amount, and over time raise it until you become ready to trade with larger sums.

    Let’s go! Play the market and earn money!

    Day trading is for traders with courage and heart. It demands to understand various forces at play in the stock market. For day trading you’ll need more experience. Well, if you are a good student and learn a lot, day trading will give you a chance to make a lot of money in several hours. The point is that you don’t need to invest a large sum, you can do it with a relatively small amount.
    But be careful, you’ll need to hedge your bet. What does it mean? You have to set stop-loss limits to cut potential losses. The advanced traders know that market makers push stocks to provoke our fear of failures or our greed. They want the stock to run for their profit, not ours.

    So you have to be very careful, to understand what you are doing, and to examine the market trends to be able to make important gains. For example, moving averages. Pay attention to them. If some stock breaks through the 200-day moving average that is the sign that potential upside or downside change in price is coming.

    Can you make money quickly by trading stocks?

    Yes, it’s quite possible. Just find companies in very volatile sectors. The other possibility is to find high-value or low-value stock with high risk but with the potential for an enormous reward. Also, you’ll have to be a short-term trader for that. That is the only way to make money quickly by trading stocks.
    For example, you’ll have to look for a high-value company that stock recently fell but you must have some clue that the stock price will rebound soon. When it happens, you’ll sell them for a higher price.

    Also, one of the possibilities is to buy a stock of some startup with the potential to produce tremendous returns. This is risky, also but can generate a great reward. The point is to hold it shortly, wait for a significant increase in price, and sell quickly. The risk here is that startups, in general, could be risky investments. A very small number of them succeed to survive a few years. They are like comets, light the sky for a while, and boom – disappear. But while they are here, in the markets, they are a great opportunity for traders to make money by trading their stocks.

    Trading stocks for a living

    People are trading stocks for a living which means they are making enough money for everyday life and over. Trading stocks can be a full-time job but also, a part-time job. What you choose depends on you. You have to find out how to make money by trading stocks from your home. Also, you may try day trading as a regular job.

    How much money you’ll make depends on your trading strategy, your skills, knowledge, etc. But not all is in your hands. You’ll have to know how the markets are doing and be familiar with many other things. Professional traders can make above $5,000 per month but that varies depending on the amount of money you put in play.
    For example, beginner traders can make several hundred or a few thousand monthly. Once, when you become more experienced with developed skills, your gain will be much higher.

    Buy low, sell high to profit from your trades 

    This approach is easy to master. It is a tested and proven formula for making a profit as a trader. But you don’t want to jump in the trade always when a stock price rises or falls. Sometimes you’ll need to stay aside and wait for your moment. It’s incredibly important not to panic when a stock falls below the price you paid. That’s the point with stock prices, they may rebound and if you exit the position too early you might miss the greater profit.
    When deciding whether the stock price is high or low enough to guarantee a trade, you should examine just a few things: the company’s earnings per share, do employees buy its stock, take a look at the company’s profit history, strength in different circumstances.

    The point is to buy low, that’s true. However, it is important to recognize the company that is able to recover and its stock will rise in price. That is exactly what would you like and as fast as possible, best right after you bought the stock. 

    The same is with the second part of the saying – sell high.

    When selling stock to reinvest the profit, you would like to ride the trend of the stock price rising as long as possible. The keywords “as long as possible.” That’s why you’ll have to learn how to recognize when the price stagnates and in which direction will go after that. In other words, you’ll have to know how to track the trends.

    In day trading or short selling, buying low, and selling high is essential to your profits. In these kinds of trading, you are dealing with highly volatile markets. The stock prices will fluctuate frequently and literally any change in stock price could end in a profitable trade. Yes, there are lots of risks but rewards might be magnificent.

    Diversification is important

    You must have a good trading plan and a diversified portfolio but not over diversified. 

    Diversifying will protect you against unpredictable changes. For example, all your stocks were in biotech, but new products have a bad influence on your stock’s prices. So, your whole portfolio could be crashed. If you have a well-diversified portfolio the influence will be protected against such trends. Also, this strategy is proper for balancing high-risk and conventional investments.  

    We have one suggestion if you really want to know how to make money by trading stocks – never walk away from trading after you made a profit. If your goal is to trade in a long time, it is smart to reinvest part of your profits or all of them.

    Bottom line

    Trading isn’t easy but practicing will help you a lot. At first glance, it may look so easy and simple. What you have to do? Just to pick a good stock and trade it. We all would like it to be that simple. The truth is that traders are carrying their knowledge to the market every single day. They can make a difference between good trades from bad trades, they are able to catch the trends, they know when to enter the position and, which is more important when to exit. Moreover, they know how long they should stick to their rules but also when it is time to break them and profit.

    Some do get lucky in the stock trading, that’s true. But it is very rare. Behind any successful trade lies great knowledge. Armed with that, you’ll make money in the stock market.

  • How to Trade Stocks and Make Money?

    How to Trade Stocks and Make Money?

    How to Trade Stocks and Make Money?

    Everyone would like to know how to successfully trade stocks but only a few know how to do that. Here are some suggestions.

    There are not many people who know how to trade stocks and make money. Statistics confirm this. According to stats, only 5% of traders are successful. That means 95% of traders fail. Surprisingly, some stats show 80% of traders leave trading during their first two years. Moreover, almost half of all traders quit during the first month of trading. The other problem is that traders sell winners in a bigger percentage than losers.
    Profitable traders represent a tiny part of all traders with just 1.6% in the average year. Nevertheless, they are very active, the estimate is that they are accounting for 12% of all trading activities per day.

    Stock traders’ problems

    Maybe the biggest problem in the stock market is that traders don’t learn how to trade stocks and make money. They are gambling, to put it simply. Even when they are using some demo accounts or following elite traders, they use it to set up their trades automatically without a meaningful process or plan. We found an interesting thing, traders and investors usually overweight stocks in the industry in which they are working. That’s smart. That is the industry they know well, the companies are known to them too, so the probability of successful trades might enhance. But there can be some drawbacks too. The emotional approach to trade is one of them. Simply said, these traders may act as cheerleaders. That isn’t smart trading. Even if they have profitable trades, the percentage of such trades is small. Otherwise, there would be more efficient traders in the stock market. 

    Knowing these stats it’s understandable why traders fail. The trading decisions are not based on research or proven trading methods. They are based on emotions. Instead of learning how to trade stocks and make money, many traders view trading as a kind of game. Don’t hope to make millions with such an approach. It is more likely you will lose your shirt. Trading isn’t a game. On the contrary, it is a profession for which you’ll need skills, knowledge and continual education and development. It isn’t easy and no one should tell you it is. Hence, be careful of your trading decisions.

    How professional traders know how to trade stocks and make money?

    You might be questioning what professional traders know but you don’t. We are going to explain to you how to trade stocks and make money so you could act like a pro. It isn’t rocket science, actually, it is quite simple but we’ll need your full attention. 

    First of all, don’t think that becoming an elite trader is something you cannot achieve. You are just a few steps away from being that. All you need to unveil how to trade stocks and make money is just around the corner.

    So, let’s start!

    Successful traders usually don’t have any insider information that is unavailable to you. You can gather them also but the real question is why should you do that. In fact, all you need to have trading success is a small adjustment in how you think about trading. In simple words, it is all about your mindset. To become a successful trader you MUST change some of your trading practices if you want to know how to trade stocks and make money, of course.

    There is no secret recipe on how to trade stocks and make money

    Beginners in trading usually are looking for a secret and instant way to success. If you are not one of them, you probably don’t enjoy trading. It is possible you are looking for some tools that will guarantee the profit. Well, it isn’t wrong. There are so many tools out there. Many of them can make your life easier. But you have to love the trading process, even the charts reading and finding patterns. Yes, that isn’t the most exciting part of trading, some may say. But try to look at that from the other point of view. For example, finding just one good, steady, price pattern might enhance your trade and can be beneficial for a long time, maybe for your lifetime. 

    But let’s stay for a while on the subject of the joy of trading. The point is not to have fun (although you might have fun) but to understand what you are doing while trading and be ready to love it. There is no need to be an adrenaline addict but some dose of willingness to have excitement is necessary still. You have to understand the whole process, from the psychological perspectives, chart reading, to money management. And you have to love it. Otherwise, you will never succeed to become a really profitable trader. In other words, you need passion, knowledge, and tools.

    The importance of tools in trading

    When you start trading the stock market, you have to make three decisions: buy, sell, stay on the position. For that you need information. You have to know the stock historical performances. It is important to recognize the patterns. And that is exactly what one of the best books is giving to you. Let us introduce and recommend this particular one, the book The Two Formula: The Best Single Trading Pattern I Have Ever Used. This book doesn’t give you only theoretical knowledge. It is based on the personal experience of the author. That is the value per se. 

    What will you find in the book The Two Formula: The Best Single Trading Pattern I Have Ever Used?

    According to the author, Michael Swanson, the first time he used this trading pattern was in 1999. And how good this price pattern shows the fact he is using it for even more than 20 years. He reveals that just one single price pattern is quite enough for successful trading whatever you want stocks, funds, futures, commodities. Basically, you can use this price pattern for anything that you can draft on the technical charts. We have been reading a lot of books about trading. Also, we examined a lot of patterns but this particular one is extremely interesting. This trading strategy is completely unique. 

    Few words about trading strategies

    Essentially, a trading strategy is a method of buying and selling in the stock markets or some other markets. The trading strategy is based on rules that deem to end up with success in trading and in profit. So, most traders are guessing and trying to notice the bottom and the level where the price starts to go up in order to buy an asset in the hope it will rise further. The point is they are often wrong. Go back to the beginning of this article and you’ll see the stats. What do the majority of traders do? They are hunting price movement. But it very often turns into chaos. Why is that? They are not trading, instead, they are gambling, they place trades without a meaningful process. 

    When they see how big mistakes they have, traders use charts to figure out what is wrong and try to fix it. Sometimes they are spending hours, days even weeks, staring at the charts to predict how the price will go in the future by using technical indicators, a lot of them. And they are confused more and more. These complicated images can fry their brain but their trades will not become more successful.

    The simplicity of The Two Formula pattern

    For any trader, the simplicity of the pattern is extremely important. If you have too many indicators added to the chart you will have a blurred picture. The essence of profitable trading is to have a steady plan, something that really works when setting the position. You must have confidence in what you are doing and you have to know how your trade will end up. This “Two Fold Formula” book can help to achieve all of that.

    Where is the catch?

    This book shows how with a one price pattern setup you can make a profit while trading. Basically, it is a simple strategy and that’s why it is an effective one. Easy to understand, easy to use, without misunderstanding. Everything is explained clearly and smoothly and, what is most important, based on personal experience and proven. 

    Some traders have to lose, but you would have a chance to make a profit with this method. Any trade has only two ends: loss or profit. Why shouldn’t you profit? This may help you to trade like a pro. 

    Bottom line

    People are afraid of the risk, but these two formula pattern seems to be using some good indicators and a more “tuned” strategy. 

    Pro tip: use it with our preferred trading platform virtual trading system to see if it’s working before trying on real funds (68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money)

  • How Much Money You Can Make In Forex Trading?

    How Much Money You Can Make In Forex Trading?

    3 min read

    How Much Money You Can Make In Forex Trading?

    Are you tired of being scammed, fake script?

    Do you wanna earn?

    But you want secret strategy 100% working, real and very legit.
    Yeah!

    How much money you can make?

    Can you become a millionaire through Forex trading?

    Well, the answer is YES and NO.

    I am not saying that it is impossible to make millions with Forex. It is.

    But if you want to turn a $500 or even a $5000 account into millions, then I have to tell you that you will have a hard task.

    Yes, I know. You’ve heard of traders making millions in the financial markets.

    But it is not good to compare yourself with them.

    Why is that?

    Because you’ve got different account size, risk affinity, risk management, trading strategy, and etc.

    So is it possible to get rich trading forex? Absolutely!

    How Much Money You Can Make In Forex Trading? 1
    But you need to keep some things in mind before you try it. Many people want to get rich trading forex and there is no doubt it offers the potential to do so but most fail. Forex trading is risky we know that already but with risk goes reward. If I want to explain how much money can you make from forex trading I have to do it with objective measures.

    Just statistics, numbers, and the cold hard truth.

    Are you ready?

    In your trading the most important thing is metric. If you only win 20% of the time and you can have a 1 to 2 risk to reward on your trades, you will be a consistent loser.

    It is obviously your risk to reward isn’t the answer. What else can be? Your win rate maybe?

    Let’s see.  

    You have a 90% win rate but if you lose $0.95 for every dollar you risk, you will also be a constant loser.

    So, where is the catch?

    Your risk to reward and win rate is meaningless on its own. You must combine both your win rate and risk to reward to establish your profitability in the long run.

    This is known as your expectancy. That will give you an expected return on every dollar you risk.

    Mathematically it can be expressed as:

    E= [1+ (W/L)] x P – 1
    NOTE:
    W means the size of your average wins
    L means the size of your average loss
    P means winning rate

    You have made 10 trades, 6 were winning and 4 were losing trades. That leads you to your percentage win ratio is 6/10 or 60%.

    If your six trades brought you a profit of $6,000, then your average win is $6,000/6 = $1,000. If your losses were $3,200, then your average loss is $3,200/4 = $600.

    Apply these to the expectancy formula:

    E= [1+ (1 000/800)] x 0.6 – 1 = 0.35 or 35%.

    This means, the expectancy of your trading strategy is 35% and your trading strategy will return 35 cents for every dollar traded over the long term.

    On the other hand, most of the casinos work 24 hours a day, 365 days a year. 

    The reason is the more they play, the more they make. And it’s the same for trading. You must PLAY more to WIN more.

    The frequency of your trades matter.

    However, the more trades you put on, the more money you will make (while having a positive expectancy).

    Let’s see how important this is.

    You have a forex trading strategy that wins 70% of the time, with an average of 1 to 3 risk to reward.

    But it only has 2 trading signals a year.

    How much money can you make from this forex trading strategy?

    Not a lot, am I right?

    Well, you might even lose in that year since there’s a 9% chance of losing two trades in a row.

    As you can see the frequency of your trades is important but it’s not enough to determine how much money you can make in forex trading.

    There are a few more factors that play a crucial role.

    Differences Between Demo And Real Account In Forex Trading 2I’m sure you heard a lot of stories where a trader took a small account and trade it into millions within a short time. But you have to know that for every trader that attempts it, thousands of other traders blast their account.

    Let’s not treat trading as get – a – rich – quick – scheme. Treat it as a business you’re looking to grow it constantly over time.

    Let’s say that can result in 20% a year (on average).

    If your account is a $1000 you’re looking at an average of $200 per year.

    Your account is a $1m, you’re looking at an average of $200,000 per year.

    Or your account is a $10m, you’re looking at an average of $2,000,000 per year.

    Let’s say it is the same strategy, same risk management, and same the trader. The capital of your trading account is the only difference.

    No matter what strategy or system you’re using, the bottom line is you need money to make money in this business. Period!

    Because your bet size determines how much you can make.

    How?

    The bigger you risk, the higher your returns.

    Let’s say your trading strategy has a positive expectancy and trigger a return of 20R per year. And you have a $100,000 trading account.

    How much can you make from your trading?

    This depends on how much you’re risking per trade.

    If you risk $1000, you can make an average of $20,000 per year.
    Or if you risk $3000, you can make an average of $60,000 per year.
    And if you risk $5000, you can make an average of $100,000 per year.

    This is the same strategy, same account size, and same the trader.

    The only difference is your bet size (or risk per trade).

    But…

    If your bet size is too large, the risk of screw up becomes a real possibility. That is to say, you have a higher risk of detonating your trading account and it will reduce your expected value.

    So, how much money can you make from Forex Trading?

    However, it depends do you withdraw or compound your returns.

    If you make an average of 20% a year with a $10,000 account, after 20 years you will have $383,376.00.

    But if you withdraw 50% of your profits each year you will make an average of 10% a year and after 20 years you will have $67,275.00 on your account.

    So, It is clear enough that compounding your returns will generate the highest return.

    But is it workable or not depends on how you manage your trading business.

    OK, you’ve learned the main factors that define how much money can you make from forex trading.

    Now, let’s see how to use this knowledge and figure your potential earnings.

    Example:

    Trading expectancy – 0.2 (or 20%)
    Trading frequency – 200 trades per year
    Account size – $10,000
    Bet size – $100
    Withdrawal – None

    Now implement this formula: Trading expectancy * Trade frequency * Bet size.

    And you will get:

    0.2 * $100 * $200 = $4000

    You see?

    To sum up, you can expect to make an average of 40% a year.

    And the answer is, there’s no one factor that determines how much money you can make in forex trading.

    You must look at these 5 and monitor and assess the success or failure of various  processes
    1. Trading expectancy
    2. Trading frequency
    3. Account size
    4. Bet size
    5. Withdrawals

    Then implement formula: Trading expectancy * Trade frequency * Bet size.

    In this way, you will have an objective measure of how much money you can make in forex trading.

    Read this too: Best Forex Brokers UK FCA Regulated

    Risk Disclosure (read carefully!)

  • Making Money From Home – How Is It Possible?

    Making Money From Home – How Is It Possible?


    An ideal job for most of the young people is remote work and here are some possible jobs for making money from your home.

    By Guy Avtalyon

    Making money from home is possible and maybe the most popular these days.

    But, what do your fellows or cousins say when you express your desire to make a lot of money from home?

    Most of them say: “Okay, then go to school. Be a good student. Find a good job and work hard. ” You already know that, and it’s great to have an education. But this is not a guarantee that you will make big money.  On the other hand, you know that there are many people who make a lot of money in a relatively easy and effortless way.

    And whenever you mention to your crowd that you know some guy or girl who are making money from home, what answers you have as feedback?

    “He’s/she’s a thief.” “He/she has connections everywhere.” “It’s not an honest business.” “He/she was lucky.” “He’s/she’s one in a million.” And a bunch of similar stories.

    Yeah! Tell me something about that!

    However, these are just excuses.

    OK, the truth is that you have to work for money. But it is not enough just to do something. It’s important to do it SMART.

    There is a saying: Do it smart, not hard.

    And that’s true. If hard work is the only important thing to gain wealth, all the people in the world would be at least millionaires.

    What does SMART work mean and how can you make money without HARD work?

    It’s very simple.

    Smart work means doing the work once, then for months (sometimes for years) to enjoy the fruits of your work.

    Passive income is making money from home

    When you heard someone say, “I started looking for ways to get a passive income.”
    Probably never.

    But you’ve heard a thousand times: “I started looking for a job.” (Or worse: “I’m waiting for a job.”)

    And when you try to explain passive income to someone, they immediately say that you are lazy.

    I’ve heard of innumerable ways of passive earning. You can write a song, record a home video, patent an idea, write a book. You can sell handmade on Etsy, you can be freelancer, virtual assistant, or you can sell cookies. Or even simpler, you may begin to earn money from home, by trading.

    With the rapid development of computers, mobile devices, and faster Internet, there are more and more opportunities for automating some jobs and generating passive income.

    I’ll give you the ultimate beginner’s guide to trading online. First of all, you have to recognize different kinds of trading.

    What to trade while making money from home

    STOCK TRADING: That is the art of buying, holding, and selling stocks (also called shares) of securities listed on public stock exchanges.

    FOREX TRADING: That is the art of buying and selling currencies in the hopes of making profits on the difference in the value of such currencies in global economics.

    OPTIONS TRADING: That is the form of derivative trading in which people trade contracts that give them the rights (but not obligation) to buy or sell an underlying asset at a predetermined price.

    BINARY OPTIONS TRADING: Form of trading in which traders expect to earn a predetermined payout or nothing at all (they are also called all-or-nothing options) based on the success of their ‘prophecy’ of the outcome of a specific market event. Little complicated and not secure.

    YOUR FIRST TRADE

    You’ll need to decide on the kind of assets or securities you want to trade. After that, you’ll need to make is choosing the right broker or brokerage firm through which you’ll access the markets. That’s very important because the broker you choose will have a direct influence on securities you’ll be able to trade, on tools you’ll have at your disposal, how much you’ll pay in fees, and what final returns you can expect on your trades.

    You have to find a broker that would charge relatively low fees and provide you with a full package of resources to make your trading experience easier.

    TRADING STRATEGIES

    The main difference between trading and investments is that a trader seeks out market movements for profit, on the other hand, an investor waits to profit from long-term price movements in the assets in their portfolio. A trader will make tens or hundreds of trades within a week while an investor will buy and hold an asset for months or years. The first action in creating your trading strategy is to create a trading plan.

    A trading plan is like writing a business plan for some entrepreneurs. It will help you to make a realistic decision in periods of rapid market movement when your emotions might lead you to make impulsive decisions.

    A trading strategy should include specific goals such as: getting out of debt, retiring early, making your first million. Also, your trading strategy should include your asset allocation and diversification moves.  As a beginner, you shouldn’t put more than 5% of your trading capital per trade. Make sure your trading strategy contains a mix of fundamental analysis of global events, like wars that impact oil prices, but also technical analysis like trading rules based on price and volume transformations.

    It is important because you can use this information to determine your entry into trades, your exit when the trade goes your way, and your escape when the trade goes against your plans. In you, your best interest is to develop the disciple to incorporate stop/limit loss orders into every trade you place.

    New traders can use technology to lower the entry barriers to trading by automating many of the activities.

    THERE ARE SOME OF THEM:

    * Trading bots – This is simply computer programs with instructions based on a predetermined set of market indicators and parameters. You can use automated trading systems to trade stocks, options, futures, and foreign exchange products. It is based on a predefined set of rules, which determine when to enter an order, when to exit a position and how much money to invest in each trading product. Trading bots are especially helpful to beginner traders and sometimes, a bot can be an important market ally for reducing your losses.

    * Stock screeners – That can help you filter the stocks in the market to narrow down potential winners before their big breaks. Screeners are helpful to identify top winners and losers, stocks on momentum, and stocks that are possible to break out above resistance levels or break down below support levels.

    * Social trading – This is a type of trading in which traders rely on users’ financial content, gathered from different networks. This type of trading provides you the platform, so you can be part of a society of successful traders. That may help you to make your own trading decisions.

    WHAT YOU HAVE TO REMEMBER

    Always use a trading plan, don’t underestimating the importance of a trading journal, change trading strategy after every trade.

    Test your trading skills on some FREE DEMO ACCOUNT in a virtual environment before you start risking your own money. Practice trading strategies so that when you’re ready to enter the real market, you’ve had the practice you need.

    Do you have any experience in trading? Share with others.

     

Traders-Paradise