Career Trading – Forex Academy

It is very common for traders to dream of obtaining financial freedom through online Forex trading. No more boring jobs, no more bosses, no more wasted administration time, meaningless emails, and endless meetings. Is it a realistic ambition? If so, how can it be achieved? In this article, I will try to comment on my own experience and try to give you an idea of the challenges you will undoubtedly face if you plan to make a living in the currency market. Forewarned is worth two.

How Much Money Can You Make With Forex Trading?

This is the first question that people always ask. There’s a simple answer: no one knows! No matter how expert in foreign exchange you are, you cannot control the market. You can be so good that you usually have a winning month and each year is considered a winning year. However, the exact amount you make depends on what happens in the market, and the market cannot be predicted with certainty. For example, look at the main currency pairs in the first 10 months or so of 2012. The market was extremely flat. Even if you weren’t negotiating trends, it was hard to be profitable using a forex strategy. Later, in the final part of that year, there was a huge bearish movement in the Japanese yen that gave traders the opportunity to make a lot of money easily. The point is that financial markets are unpredictable; there may be several months of drought followed by a huge downpour of opportunities to benefit.

A sensible approach to estimating what you can reasonably expect before starting trading is to calculate in terms of probabilities. For example, in 20% of the months, it expects to make 5% profit, in 10% of the months 7% profit, etc.

For the calculation of these probabilities, you should analyze backward by measuring your average commercial return, draw-down and initial capital, and then calculate an average expectation of trade; that is to say, the amount of profit or loss that you will normally get per transaction.

How to Calculate Your Performance

The first point to start is the amount of seed money you have to trade. It is very important to understand that the more money you risk, the less money you have, and the more money you need to pay your bills, the harder things are going to get. Even if it’s all the same on paper, the day-to-day experience of online trading as a livelihood is very hard psychologically for almost everyone, especially at first. There is a huge difference between trading with money you can afford to lose, trying to earn enough money to afford luxury items, you risk your life’s savings by trying to generate income to pay bills.

You should have a very clear idea of your typical commercial performance over the full range of market conditions as if you had been operating continuously for years. One of the best systems to do this is to have a trading simulator installed and/or a Forex strategy simulator software to simulate many years of exchange operations and ideally hundreds of operations. You can then have a good statistical basis on the likely range of returns that you can achieve in a month. Of course, proving this over a long period of live trading is a superior method for determining your trading expectations. By all means, watch Forex signals for business ideas, but don’t rely on them blindly.

Once you have these numbers, you must consider the amount of draw-down that you will be able to tolerate. From here, you can determine the money handling and leverage you’re going to use, and now you can finally calculate the likely range of cash income (and losses) you’re likely to experiment in a typical month. Will it be more than enough to satisfy your financial commitments? You will be able to weather the bad times without going into debt? Don’t forget that your actual performance will probably not be as good as your performance in the simulator, this is because making decisions over long periods of time with real money at risk is more difficult than simulated trading. Remember that the vast majority of retail Forex traders are not profitable, so you have to be at the top of your game.

A very important factor not yet covered is the psychological stress of online trading for a living. It is crucial in commercial success not to become emotional about the results of each operation. When you need good results to pay your bills by the end of the month, maintaining that attitude becomes very difficult. Your “trade psychology” is very important to get it right. A perfectly smooth equity curve gives less stress but is very difficult to achieve, so you will probably have to find a way to cope with the sudden falls of the curve without losing your calm.

A Realistic Plan for Second Income and Capital Growth

If you really want to trade Forex for a living, I strongly recommend that you consider a plan that will allow you to transition to this gradually. You may believe that you will do much better when you can devote all your energies to work and live on the operations of change, but this may not be the case

You may be able to automate your trading, at least in part, by using a Forex robot, say for trading entries. You can then decide on commercial departures every few hours or even on a daily basis. This way you can keep your income or primary salary and that, added to what you can do about exchange operations will look a lot like what you would do if you devoted yourself to this activity every minute of your day.

It is a very good idea to have both a significant stable income and a reasonably long history of profitable trading. What it can do is to grow its capital and gradually increase risk by increasing leverage. So, little by little you’ll get used to pressure and stress.

If you move forward this way, you should be able to earn enough money to quit that job you hate within two or three years of “transition” commercial success. It is tempting to think that it will become much more profitable if you dedicate yourself to this full time and without distractions, but many traders have discovered that the opposite is the case. Trading for capital gains is much easier than doing it to pay the monthly bills.

Can you earn a living from Forex trading? The short answer is, of course, yes, the forex markets offer fantastic opportunities with its high level of liquidity, 24-hour availability and the ease that there is in accessing the markets in the first place. It allows anyone with a dream to get involved and to allow people to trade at any time that suits you, so those all over the world are able to be involved with the markets. These things make it an incredibly attractive prospect for those looking to get out of their current day job.

It is important that before we look at how much you can make from it, we need to understand how it actually works. Forex is basically just the transaction and exchanging of currencies, someone will buy a currency for a certain price and so someone else is selling, the price moves, and that person that purchased the currency will then sell it on to someone else, this happens thousands of times per second with millions of different traders both buying and selling. The markets move for all sorts of reasons, natural disasters, political movements, tweets, institutions selling, and many other reasons, pretty much anything in the world has the opportunity to affect how traders feel which will then cause the markets to move. We aren’t going to go into any form of education here, as we would be here all day, but getting a general and basic knowledge of what trading is and how it works, what pips are, what spreads are, and more before even considering placing your first trade. There is so much to learn, so we suggest that you start as soon as possible.

So we want to make enough to live off, to have as our full-time income, we need to consider how much capital we need to begin with. Yes, you can start trading from as little as $10 or even $1, but can you really expect to make much from a $10 account? Even a 10% increase would only be $1. Many traders state that you should start with at least $1,000, not only does this mean that you can make some profit, but it also means that you are able to use proper risk management. Having said that, you still aren’t going to be making enough for living off an account that small, it does mean however that if you stick with it, this pot can grow to an amount that you may well be able to use to live off.

Ultimately, the more money that you have in your trading account, the more money you can make, but you need to ensure that you are applying proper strategies and proper risk management, as you need to be able to protect what you have if you want to make that amount grow. The moral of the story is simply that you need money to make money, so feel free to start with a small amount, just do not expect yourself to be making enough to quit your job with a small capital balance.

In order to be successful and to be able to make enough profit to live on you will need to have a pretty solid trading strategy and plan in place. You need to work out what your own preferred style of trading is as each of us has a completely different personality and so different styles would be suited to us. Along with the style, you will need your strategy within that style, this is basically the rules that you are putting in place that you need to follow in order to ensure that your trades are the right ones and that you aren’t simply putting on random trades.

Finally, there is your risk management plan, this is how you protect your account when to take losses and how much of your account to risk with each trade. Without all three of these things in place, you will have pretty much no chance of surviving long enough to make the money that you require. It is important to keep in mind at if you have proper strategies and risk management in place, you don’t even need to be right for 50% of your trades in order to be profitable, some strategies you only need to be right 25% of the time, so ensure that it is in place properly and that you know what you are doing.

So how much can you actually make? The good news is that there is not actually a limit, you can go as high as you need or want to. Of course, you do not want to instantly jump up to trying to make thousands a month straight away, you need to start small, it will also expand on the capital that you have in your account, the more you have the more you can potentially make. If we look at what many other traders go for, some are going for 5% per month, some 10%, and some even as high as 20% (slightly more risky). So your increases won’t be seen in monetary value, instead of as a percentage. So let’s assume that you make 10% per week, with an account of $1,000 you will be making $100 per month, the second month though your account balance is $1,100 so you will now make $110 per month ad so on, this will continue to increase as long as your account is still in tack and as long as you are sticking to your plans. With this increase, it won’t take too long before you will be making enough to live off, of course, the higher your starting balance, the higher your profits will be each month, increasing the further.

Another thing to think about is the stress that comes with trading for a living, when you are trading part-time with a full-time job as well, the pressure of needing the money within the account is pretty much negated, you have your income and so you will be able to survive whatever happens. The problem with trading for a living is the fact that you need that money, if things aren’t going well then it will cause all sorts of stress and anxieties, how will you buy food? How will you pay the rent? All questions that will cross your mind. So you need to ensure that you have some money on the side that can help cover these costs should you need them and you need to ensure that even on a bad month, you would be making enough to cover those costs, do not jump into full-time trading when you simply make just enough, you need to make more than enough each month.

Trading is however full of risk, and a lot of it. You need to get a good understanding of the risks involved and how to help negate them. Every penny that you put into your account is at risk, there is always a chance of losing it and so any money that you put into your account you should try to consider that as a loss, this will help you to remove at least some of the emotions from your trading. Developing your strategy around these risks and to help reduce them will make your journey a lot smoother. Do not go for quick profits, as this will only lead to losses and bad trades down the line, so stick to your pan and manage your risk, protect your account over making quick profits.

So the original question that we had was whether or not you are able to make a living forex trading, the answer is again yes. It Does however come with a few hurdles to get over, to have rough money in the first place, to understand the different risks involved and how you can help avoid them, and finally that you will need to build up your account over a long period of time, you will not make enough overnight, so stick with it and you may well be able to leave that 9-5 jobs of yours in order to trade full time.