So you want to be a Full time Forex Trader? What will it take?

[tbow]

So you've seen the latest forex super winning method in your inbox,

you've hit a dozen or more forex clickbank websites touting the easiest

most simple ways and methods to make incredible money in forex. Wow its

a wonder why everyone who trades forex isnt making incredible money??

 

So everything sounds great and you've bought the forex dream hook, line and

sinker, so now what?

 

Let's figure out what is takes to trade forex for a living, yes "for a living" - a full time trader.

 

Ok, so to actually live off your forex trading you will need to replace your income

from a J.O.B. So lets say you need $48,000 US a year to replace your full time income.

That $4,000 US per month you will need in profits. $1,000 a week, $200 per day.

 

Ok, so lets work on how your going to make $200 US real dollars per day in forex.

 

Do you think that a 5% gain per month is a great return?

Do you think its reasonable to achieve 5% per month?

Lets say you have found a method of trading that actually returns 5% per month.

Do you realize you will need $80,000 US in your forex account to obtain your $4,000 US

per month income? ($80,000 X 5% = 4,000)

Do you have $80,000 to put in a forex account?

Honestly, if you have $80,000 dollars to put in a forex account, you are obviously accustomed to making alot more than $4,000 a month.

 

Ok, so lets now assume you can gain 10% per month on your account.

How many traders do you know or heard of that consistently gain 10% per month

on their account? At 10% gain per month you will need $40,000 US in your forex account

to obtain the $4,000 per month income goal. ($40,000 X 10% = $4,000)

Do you have $40,000 to put in a forex account?

 

Are you ready to send $40,000 REAL dollars to your forex broker?

 

And again, honestly if you have $40,000 dollars to put in a forex account, you are probably accustomed to making alot more than $4,000 a month.

 

Well lets try a more realistic approach, how much money are you willing and ready to send

to your forex broker? Real money now, not play money. Lets get started with $10,000 US dollars in your forex account.

 

Now keep in mind, our goal is to be a full time trader making $4,000 US per month. We have placed $10,000 US in our forex account. To obtain our goal of $4,000 per month, that now means we will need a 40% GAIN per month to "live". Or 10% per week gain. Or 2% per day.

($10,000 US X 2% = $200) $200 is what we need per day to achieve our goal to be a full time trader.

 

 

Do you think that you can consistently gain 2% per day on your account? Thats what it will take for you to be a full time trader with the above mentioned figures. (if your account gains 2% per day, you will actually make more than 40% per month because of compounding, but I am not factoring in that to keep things simple)

 

If you dont believe you can gain 2% per day trading, do you think you can gain 1% per day trading?

If you can gain 1% per day, you can still achieve your goal of $4,000 per month, BUT you will need to use $20,000 US in your forex account instead of the $10,000 mentioned above. ($20,000 X 1% = $200)

 

 

Ok, so now we have determined that we need to consistently hit 2% gain per day on our account. Do you think that goal is unreasonable? To live to trade another day, we need to use solid money managment to obtain this goal every day. That means, we are NOT risking 10% of our account to achieve a 2% daily gain. One bad day and you just wiped out a week of gains.

 

We should use a reasonable risk/reward ratio of 1:1 which means if our goal is 2% per day gains, than our risk must be 2% per day loss maximum.

 

So at this point your daily goal is 2% gain with a maximum risk of 2% loss. You could achieve this with 1 single trade every day with 1:1 risk/reward and 100% winning rate ( not likely or recommended) or achieve it with several smaller trades every day with appropriate risk/reward ratio and high winning probability.

 

I wrote this post to show what it takes with real numbers to actually be a "full time" trader and to live off your gains as a trader. Also to contribute to this forum.

 

So just saying that you want to become a full time trader.

Isn't it reasonable to say that you will need at least $4,000 a month income?

( I know some will need alot more than that to replace their income)

 

Isn't it reasonable to deposit $10,000 into your forex account?

 

Based on those numbers, you will need a plan to grow your account 2% per day.

If you double your deposit to $20,000 you will need a plan to grow your account 1% per day.

 

Do you think that a 2% gain per day is possible or even likely? Thats the point of this post. If you want to be a full time trader and pay your bills and provide for yourself and your family, you will need a plan that grows your account at 1% per day minimum and preferably 2% per day.

 

I hope this post has put into perspective what you will actually need to achieve on a daily basis if you are attempting to become a full time trader.

 

 

Cheers All~~

TBow

[smurf43]

Hi TBow,

 

This is a great analysis of what is required to be "living off of Forex". There is a some way to go for me to achieve consistency and I am still leraning.

 

Intrestingly, one of our very experienced member "eggzactly" offers many of these attributes (Consistency, Moderate to Low Risk, Approx 8% monthly return etc) and I am looking in to possibly joining.

 

Check it out. You may also find it interesting!

 

http://indo-investasi.com/showthread.php/17235-Question-How-much-worth-making-money-in-Forex

 

Cheers!

[Kristianto]

Very accurate and honest post. Great way to ground all those fantasizing traders who dream of getting rich from trading.

 

it takes alot of hard work, effort and discipline to be able to accomplish self-sufficiency and consistency.