Tag: Forex Profits

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Beginners Forex Education Forex Basics

How Much Can You Really Earn from Trading Forex?

How much can I make trading forex? This is a question that you hear quite a lot being thrown around or asked in various trading communities. The problem is that there isn’t a set answer for it. Forex is one of the most popular forms of trading and also one of the most profitable, most […]

How much can I make trading forex? This is a question that you hear quite a lot being thrown around or asked in various trading communities. The problem is that there isn’t a set answer for it. Forex is one of the most popular forms of trading and also one of the most profitable, most […]

How much can I make trading forex? This is a question that you hear quite a lot being thrown around or asked in various trading communities. The problem is that there isn’t a set answer for it. Forex is one of the most popular forms of trading and also one of the most profitable, most likely the reason why it became the most popular method in the first place. Forex trading takes place during the week, 24 hours a day which gives you a lot of opportunities to make some money. If you are here then you most likely know a little about the forex markets and how it works, but many simply just want to know how much they could potentially make, and so we are going to be looking into this, to try and work out what sorts of profits you will be able to bring in.

The problem is that there isn’t a simple answer. In fact, there are countless factors that will affect the amount of potential profits that you can make. Things like your account size, the risk management that you have in place, your trading strategy, and how much time that you have available to trade, these variables are different for each and every trader, so one answer won’t be the same for them all. There are no guarantees when it comes to profits, there are possibilities and probabilities, things that you need to take into consideration that will help to dictate how much you can make or more importantly, how much you can safely make. You also need to understand that you won’t make the same profits each month, it is variable, so you may be a profitable one, in a loss the next, or make $1000 one month and $3000 the next, there is no set income, all we can do is try to maximise the opportunities for profits.

Education

Have you ever tried to do something that people consider to be quite complicated and then get it perfect the first time? Probably not if you have, then there was most likely an element of luck involved in it. It is incredibly hard or in some cases completely impossible to make a successful career out of something that you understand very little of. You wouldn’t start installing a new boiler into your house if you had no idea about gas or water plumbing, it would most likely end in disaster if you did. The exact same thing can be said for forex trading, if you jump in with very little to no knowledge, then it will only end up as a disaster with you losing whatever money you had put in. It has happened to many people before and will continue to any other person that tries.

The forex markets are one of the most complex things to look at, with many different factors taking effect and influencing h movements, some within your control, but many more out of it. There are also a large number of ways that you are able to educate yourself about the markets and how they work. One of the most popular methods is by trial and error, it is, however, also one of the most costly, as each mistake has the potential to cost you money (unless you are sensible and using a demo account of course). This method involves you doing things, making trades, and then looking at the results, working out what worked and what did not, altering something, and trying again. It is easy to do but can take a booking time to master any form of trading this way, simply because you will be constantly making mistakes and adapting over a very long period of time.

There are also a number of different online learning platforms, websites that offer insights, information, and learning materials that you can use. Some of these sites are free and are a fantastic resource, giving you the basics of trading plus some ideas on different trading styles and strategies, well worth taking a look at, especially if you are not yet ready to jump in and make some actual trades. There are also paid websites, these often offer greater depth as well as some personal training, you must be wary of these sites though, they are often hidden behind a paywall with all sorts of marketing on top to make you want to jump in. Get some genuine reviews before you do, but if you find a good one, the amount of knowledge and information that you can get from them can really help to boost your initial trading knowledge.

There are also a number of different trading communities out there, these are places where different kinds of traders come to discuss their trades, their ideas, and what is going on within the forex markets. These are often fantastic places to receive feedback on your ideas, as well as to understand others’ viewpoints, which can give you a better insight into the markets and a viewpoint that you may not have otherwise considered. You need to remember though, that often the members of these sites are not experts and the majority are most likely in the same position as you, so use if your information and ideas, but do not consider what people say to be gospel.

Regardless of how you get your information, if you want to be a successful forex trader and to actually make a profit, you need to indulge yourself in information, you will never stop learning throughout your career, but the most vital point of education is the start, get a basic understanding before you trade, then build on that foundation as you go.

Discipline and Patience

Discipline and patience are probably two of the most vital traits that you can have as a trader and without them, you will be led down a road of bad trades and ultimately losses. Once you have gained some education and worked out a trading strategy, you would think that it would be a good idea to stick to what you have. Yet so many traders seem to forget this, an idea comes up in their head or they see someone is doing something and so they do that instead, going against what it is that they have been working towards, this ends up with a loss and another ross, not sticking to your plan is vital to your success.

Being patient and being disciplined allows you to wait for the correct moments to trade, sometimes there just aren’t opportunities, and if you want to make as much money as possible then you need to only take the opportunities that match what you have learned and what you strategy details, not doing this will lead to losses and ultimately will cause you to make less money or even a loss.

Starting Balance

Much like anything in the world, you need to have money in order to make money, the more you have the more you can make, it really is that simple, of course, you need to continue to use what we have mentioned above too. The higher your starting balance, the larger trade sixes you can make which will then lead to higher profits with each trade. If you start with an account balance of $100 then you won’t be able to make $1,000 a month, however, if your balance is $10,000 then it will be far easier and far more likely that you will be able to make $1,000 a month. Once your balance begins to grow, compounding will take effect and your profits will increase. However, it is important to remember that even with a large balance, you can still make very little or even a loss each month, so there is no guarantee that a large balance means large profits.

So the bottom line is that we are not able to accurately predict or guess how much you can make each month, it all comes down to the work that you put in, what you learn, your discipline, and how much you start your account with. If you are prepared to put in the work, to learn all that you can, to stay disciplined then you can certainly make a profit and become a profitable trader, however, we still can’t comment on exactly how much, that will be down to the work and the time that you put in.

Categories
Forex Basics

Is the Effort of Forex Trading Actually Worth It?

This is quite a big question, yet it is one that you need to ask yourself before you jump into the world of trading. The forex markets are the biggest marketplace in the world and offer the most liquidity and profit potential anywhere in the world, but with all of that opportunity comes a cost, […]

This is quite a big question, yet it is one that you need to ask yourself before you jump into the world of trading. The forex markets are the biggest marketplace in the world and offer the most liquidity and profit potential anywhere in the world, but with all of that opportunity comes a cost, […]

This is quite a big question, yet it is one that you need to ask yourself before you jump into the world of trading. The forex markets are the biggest marketplace in the world and offer the most liquidity and profit potential anywhere in the world, but with all of that opportunity comes a cost, as there cannot be an opportunity with some form of risk. So if you have ever asked yourself questions like, “Is it worth trading?” or “Should I start trading?” this article will give you some insight into what trading is and whether or not it is worth taking it up as a hobby, or even as a potential future career.

To answer the question of whether or not it is worth being a forex trader is simple, the answer is yes, but it is also no. The answer to this question will depend entirely on who you ask and what their own experiences of trading have been. If you were to ask someone who had pulled in all their savings into trading and then lost, the answer will of course be no, they would advise you to run a mile, however,r if you were to ask a very successful trader for one of the multi-million dollar companies, then they will most likely say yes, simply based on their own experiences. So asking others won’t really give you a clear picture or idea as to whether or not you should be trading.

So we know that you will need to find out first hand whether it is right for you, but you first need to get an understanding of why you are thinking of being a trader in the first place. What is it that has made you think about trading? Are you looking to become rich quickly? Are you looking to make a little extra on the side of your job? Are you looking for a completely new career? Knowing this will give you an idea of what your aims are and whether trading will be able to offer what you want. Are you willing to learn? To spend hours and hours reading, analyzing, and practicing? If yes, then it may be something that you can work with. If you already think you know it all, or simply want to get rich overnight, then there may be a rude awakening when you actually begin to trade, overconfidence is one of the most dangerous emotions when it comes to forex trading.

What does it mean to be a forex trader?

Forex trading is all about buying and selling currencies, you try to buy low and sell high, that is all there is to it. Of course, it is a little more complicated than that. There are tonnes of variations to trading, multiple different account types, lot sizes, dozens of pairs to trade, each with its own influences and influences. With that, here are hundreds of different styles and strategies for trading, some of which you may have heard of, others you may never hear of no matter how much you trade. There’s so much variation and so many options that you should be able to find something that fits you well.

Trading can also be used to help diversify your portfolio, any investor will tell you not to put all of your eggs into a single basket, well trading and forex is an additional basket, and a potentially very good one to be involved in. It does provide the opportunity to change your career or to build a second income, but it won’t be easy.

Does forex make money?

Yes, that is the simple answer, but only if you are doing it properly. For every penny that you can make, you must also risk some, so those that come into it simply wanting to make a lot of money, will risk far too much and most likely lose it all, while those coming in with the expectation of a long term investment, over the period of years, will properly maintain their accounts and their risk and will then be on the right track to be profitable.

The problem is that we cannot actually tell you how much you will make, there are a lot of different factors which would influence this, your starting balance, the risk that you take, the market conditions, your strategy, and more. There are a lot of factors that will influence how profitable you are. If you think about it, make 5% to 10% per month for 10 years, you will be looking at a small fortune, but try to push that to 50% per month as an example, you will probably only last a month before you have lost it all, think long term, not instant profits.

One thing that you need to consider when looking at trading is the comparison to a normal career. With a normal job, you have stability, you know how much you will be bringing in or at least what the minimum amount will be, when it comes to trading there is no guarantee. In fact, you could even lose money in a month, the volatility is there, you can make a lot, and we mean a lot, but you can also not make anything, so if your current financial situation is quite tender, trading full time would not be a sensible option, however, doing on the side of a normal career job is certainly an option, and a good one at that.

Should I become a full-time trader?

Another question a lot of people ask, but they normally ask this one after having traded part-time for quite a while, there are however some exceptions who jump straight in and go full time. If You are thinking of going full time then there are a few considerations that you will need to take. Do you have enough capital to sustain things, if you have a bad month, two months, three months, will you still be able to survive? Are you currently making as much if not more than your actual job with your trading? Do you have the discipline to keep yourself on track when doing it full time? These are just some of the things that you need to consider, if your answer is no to any of them, then you should probably hold off going full time for the moment. You will also need to consider whether you actually enjoy trading, if you do then great, but many people find it boring to sit by the computer looking at graphs for hours on end, so if get easily bored, you may begin to struggle after a while.

What are the risks?

When there is the opportunity to make money, there is also a risk involved. When it comes to trading this risk can be pretty high, people have lost entire accounts on a single trade, others have lost an account over a longer more drawn-out time period of months or even years. This is why it is always stated that risk management is key. Risking 1% per trade as opposed to 10% per trade can save your account, the profits won’t be as high, but again, we are going for long-term profits rather than overnight riches. If you are planning on trading, then you will need to stay disciplined, create a risk management plan and then stick to it, as soon as you deviate, you are putting your account in danger. It is of course also possible to lose even when doing everything right, so you need to go into trading knowing that there is risk involved.

So let’s assume that you have decided that this is something that you want to do, how would you go about starting? The first thing that you want to do is to find somewhere to get a basic forex education, there are plenty of places out there in order to do this. You will then need to start reading and read a lot, there is an endless amount of information out there. You will also want to get yourself a demo account, somewhere where you can practice, if you have not got one yet, get one, it will give you an idea of what you need to do to place trades and a little insight into how the markets move, all valuable things to know. Once you have gained a bit of knowledge, put it to practice within the practice account, then eventually you will be ready to go live as a forex trader.

Categories
Forex Basic Strategies

How to Trade Your Way From 500€ Up to $1 Million

If we refer to Dan Zanger, Rob Booker, among others, we can say that yes, that they have achieved high returns from relatively small accounts. The secret of both the same: a lot of effort and a lot of perseverance. Obviously, virtually no one is considering achieving high returns from such a small base, but […]

If we refer to Dan Zanger, Rob Booker, among others, we can say that yes, that they have achieved high returns from relatively small accounts. The secret of both the same: a lot of effort and a lot of perseverance. Obviously, virtually no one is considering achieving high returns from such a small base, but […]

If we refer to Dan Zanger, Rob Booker, among others, we can say that yes, that they have achieved high returns from relatively small accounts. The secret of both the same: a lot of effort and a lot of perseverance. Obviously, virtually no one is considering achieving high returns from such a small base, but I will prove, at least mathematically, that the fact is possible.

Step One

Have the account in micro-lots. The benefits of the accounts in micro-lots allow us to adjust up to the last euro, our monetary management. Being able to add a micro lot more in each operation will make us enter with the right capital, not much, not little, which if we had a standard account, the least we could adjust, would be with hundreds of euros. 0.1 lots = 100€/$ (depending on the currency of the account itself).

By the time we have a large enough account, it will be time to move to an ECN account. The main advantage that we will have is the drastic reduction of spreads (in many cases, they are below a pip), so it will be easier to get positive trades.

Step Two

Have a system, obviously with positive mathematical hope. During the creation of the system, it would be good, at least in my opinion, to look for systems with high success rates. What are the advantages of a system that makes 90% of hits compared to one that makes 50%? Consistency. The probability that the former will make 5 consecutive losing trades amounts to 0.001% while the one that has 50%, make 5 bad trades, is 3.13%. Much more likely.

If in the first system, we lose 5 consecutive times, we have to worry, since it is very likely that the system has expired at least temporarily, while in the second, we should wait until operation 13.

Step Three

Risk. This point can raise blisters among our readers. Here we must read very carefully, and have very clear consequences that can have. An error in understanding can leave us with nothing. Now you see why he wanted a system with a high percentage of hits.

Let’s start. Let’s deduct: the higher the risk, the higher the profitability, and with this, the faster to get that million euros/dollars. We have a system with a 90% hit, with a Take Profits of 30 pips and a Stop Loss of 120 pips. 1:4 ratio. Matematica Hope 0.13%.

What number of operations should we do to get to 1,000,000?

Logically, at greater risk, fewer operations are needed to achieve our goal. The next step we should consider is knowing how many trades we have before we lose all the capital in our account. If at most we want to keep 50€ of the initial 500€, at most we want to lose: (50-500)/500 = -90% of our account.

 

Therefore, if we have a system that hits 90% of the time, the probability of failing 5 consecutive operations amounts to 1:100,000. Virtually impossible. As we can see, the maximum risk that can be assumed should not exceed 35%, because if we see that the system loses that fifth operation, we will know for sure that the system has abandoned us.

Suppose now that we have found a system like Tim’s, with 95% of hits. The probability of failing 4 operations amounts to 1:160,000, therefore, we could already reach risk of 40%. In order to reach 50% risk, we should find the system with 98% of hits. If instead, we have a system that is 50% correct, we should wait until operation 17, to know with great certainty that the system has stopped working (probability 1:131.072). Therefore, we could not risk more than 10% per operation.

Conclusion

To reach 1.000.000€ we can do it through two routes:

The traditional route, little risk, little by little, waiting for some 6000 and peak operations (doing one operation a day, and that the system does not fail us halfway, are approximately, about 25 years (one operation a day, during the 52 weeks of a year). The venture capital route, that is, if we lose all our capital, “nothing” happens. In this case, we just have to look for probability, mathematical hope on our side.

The number of operations according to risk will vary according to the mathematical hope. The system I have proposed has a very low hope. With higher hopes, fewer operations will be needed. The truth is I highly doubt that anyone in their right mind can do a high-risk strategy (more than 10% per trade) by doing manual trading. It is most likely that such “suicidal” strategies can only be done consistently through automatic trading.

Categories
Forex Basics

Is Forex Trading Profitable? Here’s the Truth…

The study of human neurology shows how reward increases the activity of dopamine neurotransmitters, which explains our cravings when we smell the coffee brewing in the morning or satisfaction upon completing a task. The same reward system has a tremendous impact on how we approach business ventures, which is why we often need to conceptualize […]

The study of human neurology shows how reward increases the activity of dopamine neurotransmitters, which explains our cravings when we smell the coffee brewing in the morning or satisfaction upon completing a task. The same reward system has a tremendous impact on how we approach business ventures, which is why we often need to conceptualize […]

The study of human neurology shows how reward increases the activity of dopamine neurotransmitters, which explains our cravings when we smell the coffee brewing in the morning or satisfaction upon completing a task. The same reward system has a tremendous impact on how we approach business ventures, which is why we often need to conceptualize the results of our efforts in advance.

The interest in the profitability of trading currencies in line with this human behavior and, while we may not always process this consciously, we can in fact help our motivation to take on new tasks, provided that exercise control and minimize the risks. Today, we are going to assess what the word profitable means in terms of numbers and how we can increase our return from trading currencies.

We all know how high the percentage of losses for the majority of traders, especially in the beginning. The reason for these unfortunate outcomes often lies in the fact that many only learn the basics (i.e. reading the chart, some essential terminology, and tools to predict where the price will go). Beginners hear some compelling success stories which make them believe that they will easily turn their initial investment of 500 USD into millions just by following the tricks they read online. Along with these assumptions, traders immediately expect to be able to quit their day jobs in a matter of a few years, which is why they further encumber their bank accounts with new loans right at the start of their trading careers. 

Unfortunately, once traders set up their systems and start trading real money, they frequently realize that the intermittent and inconsistent wins can hardly make up for the losses they are taking. This typical scenario is further affected by poor money management skills, in which so many beginners fail to invest because they are preoccupied with the idea of amassing a fortune overnight. Even more appalling circumstances involve the traders who, despite seeing how their predictions and moves are not leading to any gains, stay in those trades hoping for a positive turn of events. This deadly combination of factors offers an explanation for the staggeringly high failure rate in this market.

Many people cannot afford to blow out their accounts, and despite each trader’s starting point, we all need to change the perspective to properly measure profitability. To ensure a better start, beginners are advised to bury the hopes of their initial deposits being able to make any changes in terms of their financial stability. The first 500 USD investment simply cannot suffice for the projection many traders make for their future, yet they should still deposit this sum and keep going. It is absolutely crucial for any trader to become comfortable trading real money after having traded with a demo account for a while. Real, professional trading will allow you to learn how to manage your emotions and understand how market conditions will simply not allow you to get 20 pips each day as promised on some blog online.

So, finally, we come to the question of how much money one needs to make through trading currencies to be able to earn a living. First of all, very few people have the luxury of being able to invest the initial 500 USD and, after calculating the yearly return, you can see how you can use the amount of money you made in a year. Even though we all know about the impressive 20% return per year Warren Buffet makes, we need to maintain a realistic perspective and learn how to plan objectively.

Some of the most affluent figures in this market willingly give exorbitant amounts of money to their advisors just to get a 13% yearly return, which is certainly worth the effort in their case. Therefore, with a 100 thousand USD account, one can get a yearly profit of 20 thousand USD before tax with the extraordinary 20% return only a handful of professionals can obtain. This unfortunately does not do much for the vision of living off forex, as it realistically provides just a few thousand USD over the poverty line in the U.S.

Luckily, there is another way for any trader who is ready to commit to learning and offering consistent results year after year. Some experts shared how they had significantly less money than the above-mentioned 100 thousand USD, but managed to get hired by prop firms, hedge funds, and financial institutions to trade on their behalf and with their money. The requirement for this type of business deals is to develop a functioning system and showcase your consistent results. Even if you have only a demo account or a small trading account records, you can still find an individual willing to take a look at your achievement, provided that your results reflect the minimum span of one year.

Be ready to take these companies’ tests and expect to go through a probationary period where you will have to show them how well you can do in real-time. These companies keep a percentage of the profits traders make and they often require traders to set aside some amount of money as a form of protection in advance as well as cover certain fees. Even if you do not have a degree a great trading record can help you, as long as you are honest and straightforward with your numbers and achievements. 

If you have a proven high-functioning system, you can trade your own money and earn additional profit through another company, which enables you to trade professionally with minimum investment. As you can see, the only condition that you truly need to satisfy is to be legitimately good at trading currencies. Some prominent traders explain how, due to the lack of information, they needed a lot of time to accumulate knowledge and skills to be able to display their results to any company. Circumstances are much different now although traders keep making the same mistakes.

Success does not happen overnight, so instead of being hasty about what your future holds, overcome the instant gratification hurdles and compulsions and start slow. Rather keep your risk small in the beginning and learn how to trade steadily in the meantime. The investment you make can be minimal, as you can trade forex professionally regardless of where you get your results. Whether you invested your own money or used a demo account, you need convincing results owing to which you will be able to be noticed by a company willing to take traders to work for them. 

As you can see, the topic of profitability is a loose category and it mainly depends on what your lifestyle and aspirations are. Many countries in the world other than the United States offer entirely different living conditions and, what is more, you may not want to depend on trading currencies alone. Nonetheless, if you are willing to take the time to learn everything there is to know about this market, set up your algorithm, test it thoroughly, open a demo account, and understand your reactions and emotions, you have a great advantage that can open doors to unexpected ventures and outcomes, regardless of your starting point.

As a final piece of advice, the best way to achieve your objectives and see the lucrative side of the forex market is to not give up, withstanding any challenges with a clear goal and a sense of gradual development.

Categories
Beginners Forex Education Forex Basics

Why Do Some Forex Traders Cut Their Profits?

There is a brief moment of panic for many traders, especially when they are new, surrounding when they should take their profits. They can see that a trade is currently blue, it is giving them a bit of profit but it is fluctuating, do we take the profit or do we let it run in […]

There is a brief moment of panic for many traders, especially when they are new, surrounding when they should take their profits. They can see that a trade is currently blue, it is giving them a bit of profit but it is fluctuating, do we take the profit or do we let it run in […]

There is a brief moment of panic for many traders, especially when they are new, surrounding when they should take their profits. They can see that a trade is currently blue, it is giving them a bit of profit but it is fluctuating, do we take the profit or do we let it run in accordance to our trading plan. Those that are new to trading may well cut the trade and take the profits, regardless of the market sentiment and general direction.

I am sure that within your trading career you have had a situation where you have asked yourself whether you should take the profits in their current position. At times taking it early could be beneficial, other times it may not have been, it depends on the way the markets move afterward, but the one thing that is clear is that you have broken your trading plan.

So why exactly do people cut their trades early in order to take profits, it could be to do with their trading plans or their mentality towards risk and rewards. Let’s take a small look at some of the reasons that it could be.

Their plan has no profit targets: Part of creating a trading plan is to also create a risk management plan, while many will think that this is only to do with stop losses, it also incorporates the take profit levels as this is what indicates what the risk and reward ratio of your strategy is. These take profit levels are set for a reason, without them,, you have no idea where you should be getting out of the trade and so you take a guess and close the trade. Always have a clear take profit level set, then let the trade run.

They heard someone say something different: You have a trade on EURUSD, it has gone into a little bit of profit but still has quite a way to go before it hits your take profit levels. So while you wait you head out onto the internet, you notice in a forum that a couple of people are talking about it reversing and going the other way. What do you do? Do you trust your system or do you listen to them? Some people will ignore them, but those, not 100% confident in their own trading system may well listen to them and come out of the trade, just to see it continue in the right direction. Do not let others influence your decisions, your plan is there for a reason, stick with it, and do not be influenced by others.

They do not like risk: There are a lot of people out there that absolutely love risk, then there are others that hate it. If someone is trading who really doesn’t like risk, then there’s a chance that they will close out trades early in order to guarantee profits. If a take profit level is set for $50, but the trade gets to $20, someone who really does not like risk may take that $20 as they do not want to risk potentially losing it on the way to $50. You need to remember that these take profit levels were set for a reason, let the trade do its thing, taking a trade early only messes up the results of your strategy and could result in overall losses.

No confidence in the trading plan: If someone has created a trading plan but does not actually have any confidence in it, this can cause them to double guess the choices that have been made and the levels that have been set, this can cause them to cut their profits just to get out of a trade. You should not be trading on a plan that you are not confident in, if you are not confident then work on it, work out why you are not and then fix that issue before reading on a live account. Only trade a system that you know you are confident and that you can leave alone to do its thing.

It can actually be a good feeling to lock in those profits, to be able to say that you made some money on that trade. There is however something known as unrealised profits, these are the profits that you would have made should you have stuck with the original trade ideas and the original take profit levels.

When you created your plan, you set a very specific risk to reward ratio that was based on the strategy being used. As soon as you take a trade early, even if it was ultimately going to lose, you have destroyed the integrity of the trading system, it was built this way for a reason, you need to let it work the way it was designed to do. It is also a horrible feeling to take those profits and then watch the trade go on to hit your take profit levels, this is why we always allow the markets and the set trade to work its magic.

It can be hard, we know that, but when trading, a plan is always set before a trades execution, let it work the way it was designed to and you will get a lot of satisfaction out of the overall results knowing that it was your original plan that succeeded.