Beginners Forex Education Forex Basic Strategies

How to Achieve Financial Freedom Through Forex

In this article, I will present a practical guide with the 3 key points to achieve financial freedom. This means that someone who does not follow these premises will not be able to reach it, but the odds of becoming financially independent are much higher considering everything I am going to tell you next.

What is Financial Freedom?

Financial freedom is to be able to spend your time in the way you prefer, whenever he receives a regular income that allows you to live well by bearing all your expenses without having to work to get a salary. That is, to invest money in certain assets until they generate a higher income than our expenses. That’s what we call financial freedom. This sounds very nice, and it’s also very easy to say, but we know it’s hard to get. Although not impossible…

Normally, people have a job, to which we dedicate about 40 hours a week or so, and for which we receive a salary that allows us to live. In this situation, it seems a utopia to be able to generate revenue on a regular basis without the need to exchange our time for money, but believe me, it is possible.

Why Should Financial Freedom Be Achieved?

It’s not an obligation. If you are completely happy working 8 hours a day and you would not like to do anything else during those 8 hours more than your tasks at work, and you think you will be able to continue working in the same until 65 years (minimum), you’re probably not interested in financial freedom.

Now, imagine that every month you were given an amount of money that allowed you to live well without the need to go to work. In that case, we can say that we are free financially, so if really what we want at that time is to work… Great!

The Fundamental Requirement for Financial Freedom

Most importantly, bearing in mind that if we do not meet this requirement we will not be able to achieve financial independence:

Have a powerful reason.

That is, to have a motivation that allows us to be constant until achieving our goal. It is very difficult to make a habit of any new behavior that we want to implement. On many occasions, if you have not yet reached financial freedom with your current habits, it will be necessary to develop new habits that allow you to reach them.

And if it is sometimes difficult to establish simple habits such as going to the gym one day a week to leave a good tipín for the summer, achieving financial independence is not something that is usually achieved within a few months of establishing some habits. This process takes years, but in my opinion, the reward gained and the duration of the subsequent gratification far outweigh the effort.

The question is…

And you, what are you willing to do to achieve financial freedom? In the end, the goal is not to achieve financial independence, the goal is to be very clear why we want to have free time to decide what to do with it. Spend more time with family? Children? Travel the world? There are thousands of reasons, but you must have a very powerful one that allows you not to give up on the road until you get it. Therefore, the first essential step if we want to achieve financial freedom is to find the main motivation that makes us wake up every morning convinced that we will work to achieve our goal.

Step 1: Calculate how much money you need.

It is very important to keep track of our income and expenses. In this way, we can know if we need 600€, 1500€ or 4000€ monthly to live well with all our needs met (not only the basic ones, we also have to go out with friends, go to dinner, travel, etc.). And not only that but surely a person with 25 years can live and save money with 1000€ per month but someone with 40 years, a mortgage and 3 children will obviously need more income to live well. That is why we need to consider not only how much money we need to live well today, but also in the future, and to do so we need to see what our expenditure might be in the future.

Step 2: Start generating profitability for your money

IMPORTANT: It is impossible to achieve financial freedom without investing our money. This needs to be clear. If we don’t want to invest our capital in any assets, we will never achieve financial freedom. The alternative to exchanging our time for money is to exchange our money for more money, if we are not condemned to work 40 hours a week until we retire.

It is true that sometimes this investment can start out small, and that there are thousands of assets in which to invest (open a business, invest in real estate, invest in vending machines, invest in the stock exchange, do trading…). I will assume that throughout my career as an investor I get an average of 12% annual return. This means that if I invest 1,000,000€ I would get an annual income of 120,000€. Or if I invest 400,000€ I would get an income of 48,000€ per year (on average), or what is the same, 4,000€ per month.

And how can I get that kind of money?

Imagine that my goal is to achieve financial freedom 20 years from now. If I start with an initial capital of €20,000, and I am able to save and invest €500 per month at 12%, within 20 years I will have achieved €496,543 (with inflation of 2.5% per year).

Step 3: Don’t start It’s already costing you too much

In the example we saw above, we can see that after investing 20,000€ + 500€ monthly would be able to reach almost 500,000€ in 20 years. Do you know what would happen if I waited a year to start? If instead of starting to invest today I waited 365 days more, in 20 years would no longer have 496.543€, but 445.657€. I mean, I lost 50,000€ just to start a year later. Doing exactly the same thing, let’s be clear. And what if with my current saving capacity I am unable to achieve Financial Freedom? In that case, a number of things need to be considered.

The first, although it may sound redundant, is that we need to be able to maximize our savings capacity, and for that, there are two options: either we reduce spending, or we increase revenue (or both).

Before you tell me that it is not possible to further reduce expenses, if you really have a strong motivation to achieve financial freedom, you must be in control of what you spend your money on. Only then will you be able to rethink and see clearly whether all your expenses are justified or there is some way you think you can save more at some point. Know what you spend on clothing, food, gasoline, vehicle maintenance, insurance, loans, leisure… 

And on the other hand… how do you increase income?

In the first case, if our main source of income is work, we have to think if we can materialize some task on our part that we can take to benefit the company in which we work so that a salary increase can be justified. Are you certainly being as productive as you can? Could you increase your productivity by making some changes to your work routine? Do you lose something by proposing a raise to your boss?

Forex Education

Here’s How to Lose Money With Forex

We all, or at least most of us came into the forex trading world in order to make money, it’s a fantastic thing being able to make a bit of extra cash on the side or to even trade as a new full-time job, but for every trade that wins, there is a losing trade on the other side, someone who has taken your offer and the markets have moved against them, these are the losers. Many actually find it quite hard to win and so there are ultimately far more losers than there are winners. Today we are going to be looking at different ways that people lose money when it comes to trading. Maybe you are guilty of doing a few of these things yourself, if you have, that is not a problem, you would have learned something from it and will avoid doing that again in the future, so let’s look at some of the most common ways that people lose money when it comes to forex and trading.


Let’s be honest, anyone that likes a bit of risk also probably likes to gamble, gambling can give us that buzz that very few other things can, it also gives us the opportunity to make money, potentially a lot of money without putting in any of the efforts that you would normally have to. The problem with gambling is that it is random, couple that with the fact that the markets are in no way a 50/50 chance, every trade that you put on is a huge risk, and those that have tried it, the markets move in such a way that if you are gambling, you will need to be right at least 75% of the time if you want to be profitable, the odds alone mean that it is far more likely that you will lose money than make it. If you are thinking about trading via gambling, then we would suggest going back to sports bookmakers instead, you have a much better chance of being profitable there.

Thinking You Know the Markets

This is something that a lot of people feel once they have had a few winning trades in a  row, they know how the markets love and so when they place a trade they are sure that they will be successful and will be profitable. If you are in this position then you will have a very rude awakening, no one knows the markets and no one can successfully predict it all the time. It is a mistake that a lot of people fall into and unfortunately it is always a very expensive one. You cannot predict the markets, even with all the analysis in the world, the markets will still sometimes go against what is expected, this is why trading can be so exciting and also so dangerous at the same time. As soon as you start thinking that you know best, you are in a very bad place and need to member that you need to follow the markets, they certainly won’t be following you.


Greed is a very powerful emotion, wars have been started over the emotion of greed, murder, stealing, and trading badly. All of these things are associated with greed at some point, we of course are thinking about trading badly rather than the murder… we hope. Greed will make you want more, and it will often make you want more very quickly, when we trade we trade with a trading plan, a plan that details our entry, exits, risk management, and more, but when greed takes over we often throw that out the window and instead trade recklessly. Often using trade sizes that are too large for our trading account, placing too many trades at once in the hope to make a bit of extra money, or simply ignoring the plans that we have in place. Whatever it is that you do, it is not a good idea. If you ever feel that greed is starting to take over, you need to take a step back and get some fresh air in order to clear your mind and to get rid of those feelings. You Are here to make consistent profits, not to make a bit and then try to make more, only to end up losing it all.


While many people look at the opposite, they see people who trade too much as an issue or that place trades afar too quickly as a problem, it can also be the other way around. Those that are not able to make you cannot decide whether to put on a trade, either through uncertainty, worry, anxiety, or the fear of the risk, then you are not in a great place to be a trader. You need to accept that you will be putting on trades and those trades will come with risks, but they are calculated risks. If you take a long time to put on trades, you may have a good trade septum but by the time you put the actual trade on, the opportunity may have passed and you have now actually put on a bad trade. When The opportunity is there it is important that you take it, otherwise, you will be putting yourself at some additional risks of losing some of your capital.

Chasing Losses

One of the worst things you can do with anything that is financial is to try and chase losses, you need to be able to accept them, they are a part of trading and a part of it that you will experience over and over again. What many people, unfortunately, do though, is that they try to chase those losses, what this means is that if you placed a $10 trade which lost, you would then most likely place a $20 trade in order to make back the money that you lose plus a little bit extra profits. The problem is that if this one loses you are $30 down, and so you need to place another trade larger than both of those combined to try the same, as this goes on the trade sizes continue to grow and so does the risk, as you will most likely not be following your trading plans anymore. This leads to a spiral that ultimately leads to very large losses or even the total loss of an account. If You make a loss, accept it, move on, and certainly do not try and change it to make it back.

Not Learning Your System

It is very easy to get a new strategy or trading plan, there are loads of them posted all over the internet, this makes it very easy and accessible but does come with some issues. If you are using someone else’s plan, then do you really understand it It may work initially but as the market conditions begin to change, you will encounter some issues, those issues will mean that you need to adapt your strategy, but if you do not fully understand it, then you won’t be able to adapt it properly, meaning that it will no longer be as effective and could lead you down the road of some losses. If You are going to use a strategy, be sure that you learn everything that there is about it and how it actually works.

Those are some of the things that many traders do that loses them money, there are of course other things and even if you are the perfect trader, you will still experience losses, that is just the nature of the forex markets, you cannot control them, so don’t try to, accept your trades, use the proper risk management and you will be on a good track for profits.

Forex Basics

How Much Money Does It Take to Start Trading Forex?

Although some Forex brokers will allow you to start trading with just USD 1, you will need to deposit at least USD 20 with a broker offering nano lots or USD 150 with a broker offering micro lots to be able to trade safely during the day.

Strategy for Risk Management

To trade in Forex effectively, you need a Forex broker. Trying to trade in Forex using a normal bank account or money changer is too costly and slow to be a realistic option. Therefore, the starting point to answer this question is, what is the minimum deposit required by a Forex broker?

How much do you need to invest to start trading in the currency market? Forex brokers will not let you trade real money until you have deposited your minimum required deposit, which is usually around $100 these days. However, there are Forex brokers that do not require a minimum deposit, so theoretically you could start trading in Forex with just $1. Unfortunately, if you try to trade in Forex with such a small capital, you will quickly have several problems, starting with minimal position sizes and maximum leverage.

Minimum Position Size and Maximum Leverage

Many Forex brokers will not allow you to execute a transaction of less than 1 micro lot size (0.01 lots) worth 1,000 units of the base currency. For example, 1 micro-batch of the EUR/USD currency pair is worth 1,000 dollars. This means that you will need leverage to perform any transaction in the EUR/USD currency pair with an investment of less than 1,000 USD. If a broker offers maximum leverage of 1:30, typical in Europe, you will need to make an income of at least $33.50 just to make a transaction in EUR/USD. If a maximum leverage of 50 to 1 (typical in the United States) is offered, you will need to deposit at least 20 USD to perform a transaction in EUR/USD. If a maximum leverage of 500 to 1 is offered (typical in Australia), you will need to deposit at least $2 to perform a transaction in EUR/USD.

Just because you’re offered a lot of leverage as a trader, doesn’t mean it’s wise to use it. The minimum deposit that is necessary to make a single Forex transaction is determined by:

-The greater leverage your Forex broker offers you in what you want to trade (leverage is different from asset to asset and from country to country);

-The minimum size of the position you can trade with your broker on what you want to trade (usually 1 micro lot).

There are some Forex brokers that allow trading in a minimum position size even less than 1 micro lot. This lower size is 1 nano batch, which is equal to 0.001 lots. Continuing with our example of placing a transaction in the EUR/USD currency pair, 1 nano lot would equal a cash position size of 100 dollars, so with leverage of 100 to 1, a deposit of 1 dollar would be enough margin to open that transaction.

Forex Brokers Offering Nano Batch Trading

There are several brokers that offer trading nano lots, and they allow you to place an operation with a position size as low as 1 USD or 1 unit of any other base currency, which means you can trade with 1 USD without using any leverage.

So far, we have only considered the limitations imposed by the broker that affect the amount of money you need to start trading in Forex. We still have to consider the issues of risk management, stop loss, meaning benefits, and different negotiating styles, which are key factors to answer this question.

How Risk Management Affects the Repository Size

We have seen before the minimum amount of money needed to enter a single trade. However, trading Forex involves taking a large number of trades. Even a position operator that could aspire to be in the winning trades for a long period of weeks or months you should probably perform at least fifteen trades for a year; and short-term operators, such as swing traders or scalpers, a lot more operations than that.

Trading in foreign exchange involves losing operations. There is virtually no way around it: any trader, even the best Forex trader, will lose at least one-third of all trades they make. We all know what to win and lose operations are not evenly distributed: markets tend to go through winning and losing streaks. This means that each operator should plan for the worst-case scenario a losing streak of at least 20 losing operations in a row. Each operator must also plan its worst drop (decrease of bill from peak to valley). Once the account has dropped by more than 20%, it becomes increasingly difficult to return to the top, because the profit required to achieve it increases exponentially. For example, if your account has dropped 50%, you need to earn 100% of what’s left to resume the point where you were prior to the loss of 50.

Suppose you don’t want your trading account to drop more than 20% and your worst loss run will probably be 20 losing operations in a row. This means you should not risk more than 1% of your account per operation. But wait, you may only lose 20 trades in a row, but your net loss trades within any major downsizing are likely to be roughly double, with some winners mixed up. This means you probably shouldn’t risk more than 0.5% of your account in a single operation. So, if you’re going to need, because of the minimum position size, leverage, and stop-loss requirements, let’s say $1 for a single operation, you’ll have to multiply it by 200 to reach the minimum amount you need to trade in Forex. You’ll also need to think about the size of your typical stop-loss operation.

Traders must worry about a sudden and wild price movement that causes a massive slide beyond the loss of a trade. This usually occurs only with fixed or currency that can be manipulated, such as the Swiss franc in 2015. This is another reason why it is a good idea to risk only a small part of your account in a single operation. It should also help to trade with major liquid currencies such as the US dollar, the Euro, and the Japanese yen.

How Stop Loss Affects Tank Size

You should never enter an operation without introducing a hard stop loss. The loss of hard stop orders your runner to at the time when the trade has gone against you for a certain amount, close the operation immediately. Although stop loss will not be executed exactly at the price determined when the markets are very volatile, it is the best and very effective way to limit your risk and have control of losses.

The stop loss must always be determined by technical analysis, not by the magnitude of the stop loss you can “afford” because of the amount of money you have in your trading account.

For example, let’s say you want to risk 0.5% of your account on an operation and want your typical stop loss to be 100 pips. The smallest size of trading position your broker allows is 1 micro lot, which in a USD based currency costs 0.10 dollars per pip. This means that your stop loss of 100 pips will require you to risk 100 X 0.10 dollars, which is equivalent to 10 dollars. You want this 1 USD to be no more than 0.5% of your account – and that means you’ll have to make a $2,000 deposit to start trading in Forex with enough money to make the 100 pip stop loss work if your broker only size as micro-batches.

Never make a stop loss smaller than you really want it to be just because you can’t “pay” it with the size of your account. Put more money into your account, find a Forex broker that allows you to trade nano lots, or thinking about changing to another style of trade that typically requires tighter loss stops. The three traditional Forex trading styles are position trading, scalping, and swing trading, and we will consider them each in turn.

How much money do I need to operate in a Forex position?

Position traders look for trades that take several days or even weeks or months to complete, and therefore normally need to use stop losses of about 100 to 150 pips. Assuming that you don’t want to risk more than 0.5% of your account on any transaction and that you will never lose more than 25% of your account, you should start by depositing at least 2,500 USD to 3.750 USD on a Forex broker offering micro-batch trading, or at least $250 to $375 on a Forex broker offering nano lots.

How much money do I need to trade in Forex?

Swing operators search for operations that take one to eight days to complete, and therefore usually need to use stop losses of 30 to 60 pips. Assuming that you don’t want to risk more than 0.5% of your account on any transaction, and that you will never lose more than 25% of your account, you should start with a deposit of at least 700 USD to 1400 USD on a Forex broker that offers micro-batch trading, or at least 70 USD to 140 USD on a Forex broker offering nano lots.

How much money do I need for the Scalp or the Day Trade Forex?

Climbers or day traders look for operations that take only seconds, minutes, or maybe a few hours at most to complete, and therefore usually need to use stop losses of about 5 to 10 pips. Assuming that you don’t want to risk more than 0.5% of your account on any transaction, and that you will never lose more than 25% of your account, you should start with a deposit of at least 120 USD to 240 USD on a Forex broker offering micro-batch trading, or at least 12 USD to 24 USD on a Forex broker offering nano lots.

Can I start with 100 bucks?

The above calculations show that it is absolutely possible to trade in Forex safely starting with an initial deposit of 100 dollars, if you use a Forex broker that offers nano lots or smaller, and is operating in the day, in scalping or swing trading.

Is it worth trading in Forex with a low minimum deposit?

One last thing to keep in mind is, even if you can safely trade in Forex with a small amount of money like $50 or $100, is it worth it? It all depends on what these sums of money mean to you and how much time and effort you will invest in Forex trading.

For example, let’s say you’re able to double your investment in a year. This is a great result for any merchant and will probably require a lot of work. However, if you start with $100, you’ll only get $200 after this big score. It may not be is worth it if you are able to save that amount of money by making a series of changes in your life (for example saving more) without risking your capital. It may be smarter to wait until you have a larger amount to start with because then that benefit would make more sense to you and you would feel worth the work you’ve done to get it.

No one should ever trade in Forex with money they can’t afford to have losses, but normally you won’t be motivated for too long if you trade with too little money and for you, you don’t feel you care much about the outcome. You need to find a balance that works for your negotiating style, emotional style, and financial situation.