Can Forex Trading Make You Rich, can you make money off of forex.

Can you make money off of forex

The surprise move from switzerland's central bank inflicted losses running into the hundreds of millions of dollars on innumerable participants in forex trading, from small retail investors to large banks.

Actual forex bonuses

Losses in retail trading accounts wiped out the capital of at least three brokerages, rendering them insolvent, and took FXCM, then the largest retail forex brokerage in the united states, to the verge of bankruptcy. Note that the bloomberg numbers were cited just two months before an unexpected seismic shock in the currency markets highlighted the risks of forex trading. On jan. 15, 2015, the swiss national bank abandoned the swiss franc's cap of 1.20 against the euro that it had in place for three years.   as a result, the swiss franc soared as much as 41% against the euro on that day.  

Can forex trading make you rich?

Can forex trading make you rich? Although our instinctive reaction to that question would be an unequivocal "no,” we should qualify that response. Forex trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, rather than being an easy road to riches, forex trading can be a rocky highway to enormous losses and potential penury.

But first, the stats. A bloomberg article in nov. 2014 noted that based on reports to their clients by two of the biggest forex companies at the time—gain capital holdings inc. (GCAP) and FXCM inc.—68% of investors had net losses from trading currencies in the prior year. While this could be interpreted to mean that about one in three traders does not lose money trading currencies, that's not the same as getting rich trading forex.

Key takeaways

• Many retail traders turn to the forex market in search of fast profits.


• Statistics show that most aspiring forex traders fail, and some even lose large amounts of money.


• Leverage is a double-edged sword, as it can lead to outsized profits but also substantial losses.


• Counterparty risks, platform malfunctions, and sudden bursts of volatility also pose challenges to would-be forex traders.


• Unlike stocks and futures that trade on exchanges, forex pairs trade in the over-the-counter market with no central clearing firm.

Note that the bloomberg numbers were cited just two months before an unexpected seismic shock in the currency markets highlighted the risks of forex trading. On jan. 15, 2015, the swiss national bank abandoned the swiss franc's cap of 1.20 against the euro that it had in place for three years.   as a result, the swiss franc soared as much as 41% against the euro on that day.  

The surprise move from switzerland's central bank inflicted losses running into the hundreds of millions of dollars on innumerable participants in forex trading, from small retail investors to large banks. Losses in retail trading accounts wiped out the capital of at least three brokerages, rendering them insolvent, and took FXCM, then the largest retail forex brokerage in the united states, to the verge of bankruptcy.

Unexpected one time events are not the only risk facing forex traders. Here are seven other reasons why the odds are stacked against the retail trader who wants to get rich trading the forex market.

Excessive leverage

Although currencies can be volatile, violent gyrations like that of the aforementioned swiss franc are not that common. For example, a substantial move that takes the euro from 1.20 to 1.10 versus the U.S. Dollar over a week is still a change of less than 10%. Stocks, on the other hand, can easily trade up or down 20% or more in a single day. But the allure of forex trading lies in the huge leverage provided by forex brokerages, which can magnify gains (and losses).

A trader who shorts $5,000 worth of euros against the U.S. Dollar at 1.20 and then covers the short position at 1.10 would make a tidy profit of $500 or 8.33%. If the trader used the maximum leverage of 50:1 permitted in the U.S. (ignoring trading costs and commissions) the profit is $25,000, or 416.67%.  

Of course, had the trader been long euro at 1.20, used 50:1 leverage, and exited the trade at 1.10, the potential loss would have been $25,000. In some overseas jurisdictions, leverage can be as much as 200:1 or even higher. Because excessive leverage is the single biggest risk factor in retail forex trading, regulators in a number of nations are clamping down on it.

Asymmetric risk to reward

Seasoned forex traders keep their losses small and offset these with sizable gains when their currency call proves to be correct. Most retail traders, however, do it the other way around, making small profits on a number of positions but then holding on to a losing trade for too long and incurring a substantial loss. This can also result in losing more than your initial investment.

Platform or system malfunction

Imagine your plight if you have a large position and are unable to close a trade because of a platform malfunction or system failure, which could be anything from a power outage to an internet overload or computer crash. This category would also include exceptionally volatile times when orders such as stop-losses do not work. For instance, many traders had tight stop-losses in place on their short swiss franc positions before the currency surged on jan. 15, 2015. However, these proved ineffective because liquidity dried up even as everyone stampeded to close their short franc positions.

Can you really become a millionaire from forex trading?

There are some questions that are frequently asked by novice traders:

Among all the frequent questions, there is one question which is asked by some novice traders more often:

Can I become a millionaire through forex trading?

I have two clear answers for this question and I explain about each of them in details:

1. Yes, you can.


2. No, you cannot.

Making lots of money through forex trading is completely dependent on some special conditions.

When someone has the proper conditions, he can make millions through forex trading.

When he doesn’t have the proper conditions, he will do nothing but wasting of time and money.

What are those conditions?

You can increase your wealth and become richer through forex trading and become a millionaire or even a billionaire.

However, if you are among those who want to turn a $500 or even a $5000 account into millions, then I have to tell you that you have to be patient enough.

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

Anything is possible in this world.

However, you have to be patient, because it can’t be done overnight, or even in one year.

You will be faced with some challenges that finding a good broker that doesn’t cheat you is the biggest one.

Many forex brokers (market maker brokers) don’t let you grow your account consistently, because in most cases, your profit is their loss.

Forex is not a get-rich-quick scheme

It is not too easy to make a living through currency trading. Someone has to teach you the right techniques, otherwise you can’t get anywhere on your own.

It is the same with the stock trading and all other kinds of tradings and investments.

To make money consistently through forex trading and maybe to become a millionaire finally, you have to pass some important stages.

There are so many jobs that you can follow and become a millionaire.

It is not the job that has to make you a millionaire.

It is “you” who has to follow the job properly to become a millionaire.

For example, there are so many millionaire real estate agents and brokers in big cities like new york.

However, there are a lot more agents who cannot even cover their monthly expenses in the same cities.

All agents are in the same areas, have access to the same markets and customers, ruled under the same jurisdictions, use the same advertising media and… .

But, how can some of them become millionaires, and most of the others fail to have even one sale per month?

Whatever the reason is, it has nothing to do with the real estate business itself, because it is the same for all the agents and brokers.

The reason is in the agents and brokers behavior, life and work style.

Behavior, life and work style

Forex trading is like that too.

It possible to become a millionaire through forex trading, as it is possible to become a millionaire through stock trading, programming, marketing, importing and exporting, constructing, and…

The more important question is “how?”

There are two things that you have to do to become a millionaire forex trader:

2. You have to develop the trading discipline in yourself.

You can’t become rich through forex trading, without having these two at the same time.

It is not even possible to make a living without having the discipline, whether you master the trading techniques or not.

I’ve never seen even one single retail forex trader who has become able to become rich or millionaire without following the proper techniques and having the discipline it takes.

Even I’ve never seen a forex trader who has been able to make a living like this.

There is no consistently profitable and professional currency trader who doesn’t trades forex with the proper technical analysis methods.

When you have a big capital, you can trade currencies through a bank account, instead of retail brokers. But most people still have to be patient to reach this level.

And, as bank accounts are not leveraged, you will trade with more peace of mind. But you should start small at the beginning.

Those who don’t believe in what I explained above can spend some time and money on forex trading at least through having small live accounts with retail forex brokers.

I am 100% sure that they will remember what I’ve explained above, and will be back to this site after wasting lots of time and money. The reason is that most novice traders start trading with real money before they do the above two things: (1) developing proper techniques and (2) discipline.

How can you become a consistently profitable forex trader?

Unlike what most people think, it is not possible to start making money right after learning the forex trading basics and a trading strategy.

There is something very important that most people don’t consider:

To learn how to trade forex, become a consistently profitable trader and hopefully a millionaire, first you have to find a mentor who teaches you the currency trading techniques and help you to develop the discipline in yourself.

Additionally, you’d better to have an income that covers your expenses and leaves you some free time to sit at the computer and learn how to trade with peace of mind.

You can make any money through forex trading and any other kinds of trading when you DON’T HAVE TO make money and you don’t have financial problems. Therefore, having a source of income is a big help.

False forex success stories

Most people think that they can learn to make money through forex trading within a very short time, and become a full-time forex trader who makes thousands or even millions of dollars.

This is is not true at all.

There are so many false forex millionaires stories over the internet.

Be careful not to be deceived by them.

None of the real millionaires or billionaires, like george soros, have made their wealth through forex or stock trading without following strong strategies. However, they are experienced business people who make a lot of money through several sources of income they have.

Then they invest a portion of their wealth in currency, stock, real estate… markets to increase their wealth: A short term investment strategy that makes you a millionaire

This is how they’ve become millionaires or billionaires. Their increase their wealth through forex or stock trading while they have other sources of income.

Therefore, if you like to become a millionaire, first you have to have a good source of income that makes a reasonable amount of money that not only covers your expenses, but also leaves some money for your trading and investments.

Then you can start learning how to trade.

You have to keep on learning and practicing until you become a consistently profitable trader. That’s why we enable our trading students to develop a source of income too.

The hassles of following too many trading strategies

Some traders the hard way of following too many trading strategies, robots and time-frames, and sitting at the computer for several hours per day.

That is the hard way which can hardly take you to your destination.

The simpler and easier way is learning the forex trading basics, and then a simple and strong trading strategy.

Then you have to master your trading strategy through demo trading.

When you succeed to make profit consistently for 12 consecutive months at least, you can open a small live account and start practicing with it.

If you can make profit consistently for 12 consecutive months with your live account too, the way you could make profit with your demo account, then all you have to do is that you keep on trading with your live account to grow it, or adding some more money to it. But don’t make your account too big. You will be faced with lots of negative emotions when you are still new and you want to trade with a too big account.

A source of income is really good

To become a full-time forex traders who makes money consistently, you have to spend some time. I already explained it above.

If you don’t have an income currently, or if your income is not enough to give you time and mind freedom to learn forex, you should develop a source of income that covers your life and enable you to open a live account in the currency market when it is the time.

You can keep making money with your source of income until you are ready to open a trading account. If your income is enough to trade through a bank account later when you are ready to do it, it will be even better.

Trading through a bank account will have a lot more advantages compared to trading through forex brokers.

The only problem of trading through a bank account is that you have to have a lot of money because banks don’t offer any leverage.

Therefore, to become able to trade through a bank account, you have to have a lot of money already.

That is why I emphasized on having a strong source of income earlier in this article.

If you want to become a millionaire forex trader, you must have a good income and backup.

Turning a small $5000 account into a million dollar account is possible theoretically.

You can do it slowly and surely when you become a consistently profitable trader and you have enough patience. However, you have to be a patient and disciplined forex trader to do it. And, you can’t do it alone. You need the mentors technical and emotional support.

Do it the right way:

You need to become a professional trader through learning the best and most accurate technical and fundamental analysis techniques. This is the only thing that makes you a professional trader who can consistently make profit.

When they become consistently profitable forex traders eventually, they have enough money to open live accounts or even professional live forex trading accounts with the banks to trade professionally and increase the money they make.

This is how they can become millionaire forex traders while they also have some other good sources of income to support their forex and stock trading investments.

So, the answer of this question that whether it is possible to become a millionaire through forex trading is in the facts that I explained in detail above.

Be careful not to be deceived by the scam mentors or brokers. They are there to make money from your losses, not to make you a millionaire.

How much money can you make from forex trading?

The question of how much money you can make currency trading is a big one that is asked online quite often, so much so that I decided to write an entire 2,000+ word article on it.

See, while this question is incredibly broad, the money you can make from trading forex can be estimated depending on how much money you have, the leverage you’re using, etc.

So, how much money can you make from forex trading?

You can make anywhere from hundreds to thousands of dollars a day trading forex; the bigger your bankroll and equity, the more you can invest therefore the more profits you can reach. While there are plenty of forex traders who do very well, the reality is that most forex traders lose money.

The answer to ‘how much money can you make from forex trading’ is unlimited amounts of money, although perhaps the better question is ‘how much money will you make from trading forex?’

So, how much money can you make with forex trading?

There is no way to predict exactly how much you should make each day in forex trading. The key is to set earning goals that are realistic for your economic situation, how much time you have to invest, your skillset, etc.

Obviously, the better you get at trading forex, the more money you will make. This statement does not come without a warning; as mentioned previously (and many times on this site), most forex traders fail.

The answer to ‘how much money can you make from forex trading’ is unlimited.

Yes, most forex traders come out with negative results.

That said, there’s no reason to get scared if you are willing to put the time and effort into learning how to trade forex.

With the right resources and practice, it is entirely possible to make a full-time living solely off of forex trading (and you don’t have to be rich, either!)

People are drawn to forex for reasons such as:

• Forex requires a lot less starting capital than stock trading (or other investing)


• You can trade forex 24 hours a day, 5 days a week


• Forex is extremely volatile, which means you have the potential to make a much greater return on your investments (compared to other financial investing)


• There are a large variety of strategies and methods you can utilize to trade forex, and you will likely find one that works for you

For these reasons and more, forex is seen as an attractive option to make some money online – however, because forex is so volatile and there is an opportunity to make so much money, you can also lose substantial sums of cash.

As long as you have a realistic view of the dangers of forex trading, you can focus on avoiding these risks and achieving the success that so many others have found with currency trading.

This post will answer the following questions:

• How much do forex traders make?


• How much do forex traders make a day?


• How much do professional forex traders make?


• How much do professional forex traders make A day?


• How much money can you make trading forex?


• How much money do I need to start forex trading?

This article is intended to provide a practical depiction of how much the average forex trader can expect to make, and also how much professional forex traders usually make.

Also, I hope this post can put to rest some of the fantasies you may have about forex trading, thanks to the faux-marketing and forex scams out there. Unfortunately, a 20% return is not doable every single month – any system or ‘forex robot’ claiming otherwise is lying to you.

Use these answers as inspiration and goals to work towards – with the right amount of hard work and dedication, anyone can reach these levels of success.

How much do forex traders make?

The average forex trader can expect to make no more than 5% of your account size back every month.

So, if you happened to have a great month and you gain 5%, that means:

• If you trade with $10,000, you made $500.


• If you trade with $5,000, you made $250.


• If you trade with $1,000, you made $50.

Not to worry – many great forex traders grow their bankroll over time and eventually get to a point where they have an account with hundreds of thousands of dollars.

• Bill lipschutz, one of the top forex traders out today, started trading with $12,000


• Ed seykota started trading with $5,000


• Randy mckay started trading with just $2,000!

Becoming a successful trader is a process, not an overnight occurrence; if you aren’t coming into the forex game with heaps of money, it will take some time before you are one of the big dogs.

Obviously, how much money you can earn in forex trading varies greatly, and the amount of money you do make will change every single month – you might have a fantastic month, turning profits of 30%, just to lose 40% your next month.

This is where strategy and proper risk management comes in – although leverage in forex is great, you do have to proceed with caution if you hope to stay in the game for the long run.

Keep your risk low (especially when starting, don’t risk more than 1% of your capital ever), and make trades that have great risk/reward ratios!

How much do forex traders make A day?

If the average forex trader makes about 1% to 5% a month trading, then following this logic, this works out to returns of 0% to 0.15% a day.

The question of ‘how much do forex traders make a day’ is especially broad – while everyone likes to come out profitable every single day, this is just not how it works.

The goal is to be profitable overall, which means at the end of the month (or any span of time) you want to be up.

If you are trading long-term, you will have some bad days.

All you can do is keep going and trading according to strategy, aiming to be profitable over the long-term.

There is no set amount of how much forex traders will make in a day, although it’s not uncommon for certain traders to have daily goals they try to hit.

Now that you are familiar with how much money forex traders make and how much money forex traders make in a day, let’s take a look at how much money professional forex traders make.

How much do professional forex traders make?

Professional forex traders can make a 5-10% return on their capital monthly – the catch is that their accounts are usually huge, well over a million dollars, so that a 10% return can mean hundreds of thousands of dollars every single month.

Obviously, as with all forex trading, the returns will vary widely – even professional forex traders have off months, and then spectacular months where they make up to 50% of their capital back!

Use these big returns as motivation to keep growing your forex trading account.Use these big returns as motivation to keep growing your forex trading account.

How much do professional forex traders make A day?

While we all wish we could have as successful a day trading forex as george soros once did, this is unlikely to ever occur.

That said, there are some professional forex traders who are making heaps of money every single day (think more returns in a day then you have in your entire account!)

Speaking conservatively, a professional forex trader can expect to make anywhere from 0% to 1% of their capital.

Obviously, these are just hypotheticals – but there are certainly some forex pro’s out there making this kind of money.

Again, use this as motivation to keep moving forward! Everyone has to start somewhere.

How much money can you make trading forex?

I hope this post gave you an idea of how much both the average and professional forex trader might make – it’s worth mentioning again that these numbers vary greatly, and I’m sure there will be some people who read this post will disagree strongly (feel free to leave a comment)!

Every forex trader uses a different forex strategy and has different approaches to trading; because of this, questions such as ‘how much money can you make off forex trading?’ are hard to provide a concrete answer for.

If there was one specific strategy for forex trading that worked, every single trader would be successful – obviously, this is not the case.

In order to reach the levels of success that many average and professional forex traders have obtained, you need to create realistic goals and have legitimate grasps of risk/reward ratio, risk management, money management, stop loss, etc.

Risk management is arguably the most important part of forex trading – this is how you stay in the forex game for years to come.

If a forex trader is making crazy 20% returns, that means they are probably risking much more of their capital then they should.

Remember, the key is long-term growth and success.

Utilizing proper risk management is how you stay afloat for years to come and is how you can live off of trading forex full-time!

How much money do I need to start forex trading?

How much money do you need to trade forex? It depends.

As I mentioned earlier, some of the most well-known forex traders today started with accounts of just a few thousand dollars.

This puts to rest the idea that you need to already be rich in order to make big enough returns on currency trading – this is simply untrue.

Not only myself but many of my friends and colleagues started trading part-time with just a few thousand dollars and grew it to accounts of hundreds of thousands of dollars.

So, how much money do you need to trade forex? As much as you have.

If you only have $500, fine – go for it. You certainly won’t make enough to go full-time, but over time you can grow it into something substantial.

That said, I do recommend having at least a couple grand – $2,000 – which I think is the sweet spot for starting trading. While this isn’t enough to quit your day job and trade the forex markets full time, this is enough to get you started and has been proven to be enough to grow into a big-time successful account.

Just make sure that however much money you’re investing in currency trading, you can afford to lose it.

If you do want a chance to make returns on your investment and not lose your money, you must take the time to learn how to properly trade forex and make profitable trades.

Learn to trade forex

Figuring out the best strategy for you is the key to trading forex successfully – if you don’t know any strategies or simply want to learn how to trade forex, definitely make sure to properly educate yourself before investing any real money into the markets.

For those who want a program that will teach you everything you need to know to get started in forex and more, go read our post on a mentorship program that is both valuable and affordable.

Also, if you haven’t already, make sure to grab our free forex trading fortunes PDF – enter your details below to get your copy sent straight to your email today!

How much money can you make from forex trading?

You can really make an unlimited amount of money from forex trading, although typically, anywhere from 1% to 10% returns on capital are expected, per month.

How much do forex traders make?

The average forex trader will usually make no more than 5% returns on their capital, per month.

How much do forex traders make A day?

The average forex trader will usually make anywhere from 0% to 0.15% returns, per day – the number varies.

How much do professional forex traders make?

Professional forex traders usually aim for 5% to 10% returns on their capital, per month.

How much do professional forex traders make A day?

Professional forex traders make up to 1% a day returns, give or take. The number varies.

How much money do I need to start forex trading?

The number varies; you can start with $100 or $1,000,000 – the more money you have, the more profit you can make.

I’m a full-time forex trader, happily making money from the comfort of my own home.

I help others find financial freedom and success with forex trading.

Can a beginner make money with forex

Many people get started with forex trading for the wrong reason. They believe that is a way for them to get rich quick. As with any legitimate trading avenue, however, this is not the case. The short answer to whether a beginner can make money with forex would be ‎‎‎‎‘yes’.

This doesn’t mean that every new trader will make money or that it will be an easy process. Forex is an industry that is advantageous to individuals who understand the specifics and inner workings of it. On that note, let’s take a look at what it takes for a beginner trader to make money with forex:

1) mastering the basics of forex trading

To be a good forex trader, you first need to equip yourself with the necessary tools. Here is what you need to know about the fundamentals of forex trading:

A good broker is essential

The key to starting off with an advantage is to choose the broker that is right for you. It is best to stick with a broker that is licensed by the futures commission merchant and regulated by the commodity futures trading commission. Depending on where you live, you may need to find a broker that is affiliated with an authoritative agency that pertinent to the region.

The other thing to consider when looking for a broker is low spreads. Spreads are the difference between the purchase price and selling price of the currency. They are calculated as pips. In certain trading industries, brokers make their money via commissions. With forex, however, the brokers rely on spreads.

Due to the fractional price deviations with forex trading, traders need their brokers to offer them leverage. You should decide on a broker that gives you the option of either low or high leverage. Depending on the situation, you may need to make use of either of these.

Many brokers need to borrow large sums of money to equip their traders with leverage. They acquire these loans from banks and other large lending organizations. You should look for brokers that are backed by reputable banks to minimize fallout in the future.

Adopting a strategy

The strategies in forex trading are based on either fundamental analysis or technical analysis. Fundamental analysis typically depends on news reports regarding the various factors impacting currency. Technical analysis, on the other hand, is about identifying the various price trends in the market. Traders can choose to use a strategy that consists solely of these types of analysis or they use one that is a combination of the two. In the end, it is about finding and using a strategy that is in accordance with your trading style.

2) how beginners can make money with forex

Now that you know what is needed, how can you make money with forex as a beginner? Here are a few guidelines:

Start with a demo account

Most brokers offer traders the opportunity to use a demo account, at least for a limited period of time. A demo account lets you make practice trades without actually investing any real money. This helps you to learn how trades are made and also gives you an opportunity to test out your strategy. All of this prepares you to make your first trade and improves the chance of you being successful.

Do research

When you don’t have experience at your disposal, you need to utilize the next best thing: knowledge. Fortunately, the forex market has been well researched along with the many strategies that you can use. Reading books, joining forums, and asking questions are all essential to learning how to trade better. It will give you a better idea of just how this form of trading works.

Trade with the trend

When you are just getting started, your greatest advantage will be to trade with the trend. Trading against the trade could offer better profits but tends to be a riskier option. This is why you should follow the trend unless you have strong evidence to go against it.

3) forex trading mistakes to avoid

One of the reasons that beginner traders tend to fail is because they make too many mistakes and are unable to recover from them. Here are some of the common ones to avoid:

• Not being patient and playing the long game when necessary


• Making too-large trades


• Letting emotion cloud your trades


• Focusing on making profit rather than preventing losses


• Trying to get rich quick

A beginner can make money with forex but you need to understand that it is not simple. It requires study, effort, and most important of all, patience. Only then will you begin to make profits.

5 harsh realities of making money in forex

Are you sick and tired of self-proclaimed trading experts (internet marketers) telling you how easy it is to make money from forex?

You know that forex is not easy.

The problem is that most sites wont tell you how hard forex can be. In fact most sites say forex is easy. Most forex websites do not tell you the truth about forex.

Harsh reality 1: forex is never quick and easy

Most new traders think forex will be easy.

They see advertisements promising quick and automated riches with a forex robot or something equally irresistible. They dive right in blind to the dangers and they get hurt.

Big surprise….. FOREX IS NOT EASY!

In fact anybody who tells you forex is easy is lying. Check out this ad below:

Would you buy this product?

You could be a lawyer in 30 days, you could work for a prestigious law firm earning a six figure income.

You would not buy the product because you know its a lie. Getting a law degree requires half a decade of study. There is no way you can become a master lawyer in under a month.

Forex might not be as hard as law but the same concept holds true. No product is going to make you a master trader in a few weeks. No EA (forex robot) is going to make you consistent profits while you sleep. Forex just isn’t that easy!

If you are here for easy riches, got to a casino, you will have better chances there!

Harsh reality 2: most systems are useless

Most traders waste time searching for the perfect trading system.

When looking for a system the first stop is usually popular forex forums. If you see a system with great feedback and many users it must work right?

Most trading systems on popular forex forums are created by inexperienced traders. The systems may work well for a few weeks, or even for a few months, but they fail in the long run.

This is especially true of indicator based systems. Indicators are sensitive to changes in market conditions. Some indicator based systems give amazing signals in trending markets but fail in ranging markets. The problem is that most indicator based systems are not adaptable to changing market conditions. So a system that works this week might not work next week. If a trading system has not been forward tested for over a year you cannot trust its effectiveness.

If you go down the path of hunting for forex systems you have already failed. You will embark on a long, fruitless search and find nothing.

My advice is to start with the basics, learn how to read price action and how to place support and resistance areas. Once you learn those two things you will not need to find a trading system.

Harsh reality 3: demo trading won’t prepare you for live trading

Imagine a mean looking, tattooed biker approaches you. He pulls out a shotgun, points it at your chest and demands your wallet. What would you do? Chances are you would probably hand over your wallet pretty quickly.

Now imagine an scrawny little eight year old kid approaches you. He pulls out a water pistol, points it at you and asks for your wallet. What would you do? You would probably laugh.

This may sound absurd but there is a correlation. When you trade a demo account you are not using real money. So the fear and apprehension of risking real money does not impact your performance.

A demo account is like the little kid above, it is play money, you can laugh it off and move on.

A real account is like the biker above, the fear and the intimidation of trading real money impacts your actions.

Psychological factors may seem insignificant but they are very significant. Most new traders perform extremely well on demo accounts but fail abysmally on live accounts. Psychology matters and demo accounts do not prepare you for real trading.

Demo accounts do have their use. They are great for familiarizing yourself with a trading platform and learning basic trading concepts. They are also good for basic testing of a trading system.

Harsh reality 4: you need time

So many websites tell you that you can trade forex successfully with less than one hour of work per week.

The reality is that you need to invest a lot of time into becoming a profitable trader. If you can only find a few hours each week to dedicate to forex you should probably give up.

Learning to become a consistently profitable trader takes a lot of time. You need to be prepared to set aside several hours a week to study forex. According to scientists it takes 10,000 hours of practice to master something. I doubt you need 10,000 hours to become a profitable trader. However, you will need more than two hours per week.

The good news is that once you are profitable it is possible to cut your trading time down to a few hours per week. Currently I trade around two hours per day four days a week.

Harsh reality 5: adapt or die

The forex market is constantly changing. You need to be able to adapt or you will never make it.

With a constantly changing market a trader need to be able to make changes on the fly and adapt to current situations. So, a good trade knows how to adapt quickly to a changing market.

When the market throws something unexpected at you, you need to be able to analyse the best course of action and make a decision quickly.

My trading method is based on price action. Right now I concentrate almost exclusively on reversal trading. This is because since 2010 the average daily range of forex pairs has dropped. GBP/JPY used to range 280 pips per day and know it ranges 120 pips.

When markets are not ranging breakout trading becomes hard. My trading method was adapted from trading breakouts to trading reversals in 2010. When pairs start to range again I will probably adapt to market conditions and begin to trade breakouts.

A good trader needs to be ready to adapt quickly to changing markets.

So, should you bother trading forex?

Well, that is up to you. We all know that the vast majority of new traders fail. They fail because they expect no stress, fast and easy riches.

You cannot change the harsh realities above. However, you can accept them and get on with it anyway.

Trading is tough but you need to be tougher. You need to work hard and you need to persevere.

Can you make it a little easier? Yes…….

The next step

The reason I first started www.Forex4noobs.Com was to help new traders become professional traders. That is why this site is packed with stuff to help you along the road from beginner to pro. So if you want to get on the right path take a look around the site.

If you are completely new to forex you should start with or basic forex education section.

If you know the basics you should check out our free forex course. In the video course I show you many important things you wont learn anywhere else. I show you how to put together a highly effective trading plan, money management plan and trading diary. I even explain how to put together a trading strategy.

For free analysis and trade ideas check in to this blog regularly.

Finally if you want a proven trading strategy along with a private members forum where we discuss trades check out the advanced forex price action course. It is closed to new members right now but if you throw your email in I will contact you in the next few weeks about getting access.

Forex trading: how to actually make money as a beginner

(partner content) there are a lot of markets where individuals can trade — crypto, stock, bond, commodities. However, there is a significant difference between these and forex.

Forex daily volume is slightly over seven trillion, which is more than all the other markets combined. With this article, you are going to learn just how exactly can you make a small part of those seven trillion yours. Consider it an oversimplified, yet still effective tutorial on how to properly trade on the forex market.

What is forex and how does it work?

Forex is where the world governments, international banks and pretty much everyone else trade currencies. It’s a single exchange-free market created by the thousands of the trading networks. However, you don’t really need to know exactly how it works — just like you don’t need to know the internet transfer protocols or how your mobile phone receives the latest cat memes.

All you need to know is how you can enter this market. You are going to need just three things:

• A forex broker. The company that is going to provide you with access to the market. For beginners, we recommend justforexbroker;


• A forex terminal. The software that will let you communicate your trades to your broker. If you are going with justforex, consider metatrader 4;


• A trading strategy. A basic set of rules that you will follow when trading. We will explore this below.

Of course, you are also going to need a computer or a mobile phone with internet access.

What are the major currencies?

Your best bet when it comes to forex trading is major currencies. They have very small spreads, offer great trading conditions and often the brokers themselves provide detailed market analytics for these pairs. Granted, you probably won’t make tons of money, but even small winnings are a great result for beginners.

The major currencies are:

• US dollar (USD)


• Euro (EUR)


• British pound (GBP)


• Canadian dollar (CAD)


• Japanese yen (JPY)

The currency pairs that combine USD with one of other four major currencies form major currency pairs. For example, EUR/USD or USD/CAD. Each currency pair has a constantly changing value that shows how much of one currency one unit of the other currency is worth. For example, if GBP/USD is being traded at 1.5400, you can buy 1 GBP with 1.54 USD.

The most popular currency pairs and their names in the FX community

There are other currency pairs that don’t involve USD at first glance — like GBP/JPY. However, you will find that they have higher spreads and volatility than major currencies.

How to pick a forex trading strategy

A trading strategy is basically a set of rules you have to follow to succeed on the forex market. Commonly, it can be defined as a set of market conditions and corresponding trades you have to do to make money off them.

The definitive forex strategy for beginners is price action. Originally designed by james16, this collection of price chart patterns and recommendations is the definitive forex trading guide. That said, the original thread is somewhat overwhelming these days.

An example of price action patterns, which determine the traders’ actions

There are other trading strategies that are no less viable — like scalping. However, proper scalping is a complicated task, and the risk of making a mistake is extremely high. Since mistakes on forex will commonly lead to a loss, we do not recommend this strategy for beginners.

How to make money on forex

Making money on forex is easy, and you should be able to do it as long as you think with your head and do not go in blind. With a good forex broker, a terminal you know, and a viable strategy, you can succeed easily.

That said, do make sure that your forex broker is reliable and is not going to scam you out of your money. A good recommendation is justforex — an international broker with decent trading conditions and spectacular support team that will always be able to help you out.

What is forex and how to make money with it?

Currency or forex trading has received a lot of attentions in the past few years.

However, let’s see whether it is what people really think, or it is something completely different.

What is forex?

Forex is the knowledge and art of trading different currencies against each other and making profit through it.

Each country has its own currency, and the currency of different countries can be bought and sold against each other.

Forex traders are those who make money through buying and selling different currencies against each other.

Forex is not a new business, and its history is as old as the history of money.

However, computer and internet have enabled people to trade forex from home and through the personal computers.

There are two kinds of forex traders

Forex trading is different from the money exchange business.

A money exchange business also deals with the currencies.

But it is different from forex trading and forex traders are not money exchangers.

Forex traders are those who buy and sell currencies against each other to make profit.

They don’t to offer a money exchange service to people.

1) retail forex traders:

Retail forex traders are the ones who trade forex from home and through the retail brokers.

They are the ones who lose a lot of money and give up on forex trading sooner than later.

Most people think that it is possible to have a fixed monthly income through forex trading, and so they start doing it from home.

However, forex trading looks easy at the beginning and when you look at the price charts.

Indeed, there is no retail forex trader who can make money consistently from trading the currencies from home and through the retail brokers.

It is becoming harder and harder to make money through forex trading and as a retail forex trader.

Brokers get greedier all the time and try to cheat their clients more.

Indeed, I have never seen a consistently profitable retail FX trader who trade currencies through the retail brokers.

By the way, I forgot to tell you who forex brokers are.

They are the companies that connect you to the currency market to enable you to buy and sell currencies through your personal computer and the internet.

2) professional forex traders

Professional forex traders are the ones who either trade for the banks or the hedge funds and financial companies, or if they trade for their own, they do it through the bank accounts and with a reasonably big capital, not through the retail forex brokers and with a small trading account.

They don’t trade every day, because they only take the big trading opportunities to increase their wealth and capital.

Indeed, currency trading is not a source of income for them.

It is an investment opportunity to increase their wealth.

Learn more about these forex traders:

So, the first thing you have to keep in mind is that forex is not what the brokers and forex signal websites advertise over the internet.

Therefore, make sure not to waste your time and money on it, with the hope of creating a source of income that makes money for you every month, consistently.

It doesn’t work like that at all.

Forex trading can’t be as your main source of income and full-time job. Period.

If you don’t believe this, you will be back to this article and this website after a while of wasting time and money.

So make sure to bookmark this page to come back here when you remember me and this article after losing some money and wasting a lot of time.

I hope you don’t rick too much.

How can you make money with forex?

Does what I explained above mean that you can never make any money through forex and currency trading?

Indeed, currency and stock markets are great investment opportunities.

But please note that they are investment opportunities, not sources of income.

It means, you can invest a portion of your capital in currency market to increase your capital, as you do the same with the real estate and stock markets.

To do that, first you have to have a reasonable amount of capital that you can invest a portion of it in the currency market to increase your wealth and capital.

This is how forex trading and currency market can benefit you.

Day trading with shorter time-frames

If someone tells you that he makes money every day while sitting at the computer and trading the currencies against each other through the shorter time-frames, then you should make sure to ignore him, because he is lying.

Now, as I mentioned above, forex is a good investment opportunity that enables you to invest some money and increase your wealth and capital.

What if you don’t have any money to do this now?

If you don’t have any money and capital to invest in the forex market, then you have to create a reliable and strong source of income to make money consistently.

Forex can’t be this source of income at all.

Therefore, if you are unemployed and you have no job and income, or you have a job, but your income is not enough and you want to make more money, and you think that forex trading is the solution, you are wrong.

I explained about the reasons above.

The first step

What you have to do first, is creating a reliable and strong source of income.

When you made enough money, you can invest a portion of it in the currency, stock and real estate markets to make more money and increase your capital.

If you aren’t ready to do that now, then stay away from the forex market, because you can’t make any money through it with a small $500, $1000 or even $10,000 account with a retail forex broker.

This is the most important piece of advice we always give to our website’s followers.

Now, if you are ready to start from the beginning and establish a reliable and strong source of income, I suggest you to read the below articles to understand what I mean by a reliable and strong source of income:

The below article explains how our investments strategy works.

If followed properly, it can make a lot of profit in long-term in the forex market.

This is the strategy you have to follow when you have already earned enough money through the reliable and strong source of income I talked about it above: A short term investment strategy that makes you a millionaire

Don’t trust the fund and account managers

There are some people who claim to be skillful and profitable forex traders.

They offer you to give them some money to trade in the currency market and return some profit or interest to you every month.

These are the ones you should avoid as well.

The ones who are not scams, don’t know what forex trading is in long-term.

They have been lucky to make some profit for a short while.

Therefore, now they think they are professional forex traders who can double and triple the accounts every month.

What will happen is that they will wipe out the whole account and all the money will be blown up.

So, if you are looking for making money through forex, make sure not to give your hard-earned money to anybody.

Also you don’t risk your money to trade forex on your own.

For newbie forex traders

For a newbie, forex and currency market is nothing but a money sucker.

It only wastes your time and money. That is it.

Now, if you are really after making money and getting rich, you can follow a clear and straight-forward wealth building strategy: A wealth building strategy to create wealth from nothing

Forex market can make you richer only when you are already rich.

Now you know what forex is and how professional forex traders make money

Therefore, you won’t make any mistakes and you won’t lose any money in this market.

You are lucky if you have found this article before risking any money in forex trading.

I know some people who haven’t been as lucky as you.

They lost their shirts before they learn that forex trading was not what they thought.

Make sure you follow us on this site, if you are serious about getting rich without losing any money and wasting any time.

In this below 23 minutes video, we have talked about the history of trading at the beginning. Then we have explained about the currency trading basics. This video covers the below topics:

1. The currency market and the world of exchange


2. The modern exchange


3. The modern stock exchange


4. The history of stock exchanges


5. What is liquidity?


6. Rating of quality


7. The agreed minimum quantity which can be traded which is “LOT” in currency trading.


8. Different kinds of exchange: commodity, stock, currency


9. International transactions: US dollar, euro, british pound, japanese yen, swiss franc


10. What is “foreign exchange”?


11. Who works on the currency markets? Central banks of countries, financial companies and brokerage houses, private individuals like forex traders


12. The markets working days and times


13. Currency pairs


14. Point or pip


15. Margin and leverage


16. Trading platforms


17. Bid and ask prices


18. Spread


19. Long and short positions


20. Stop loss and target (take profit) orders

How do you make money through forex trading?

You buy or sell a currency against another one when you come to this conclusion that their value is going to change against each other and consequently your trade will make profit for you.

For example when you buy EUR against USD, it is because you think that the EUR’s value is going to go up against USD after a while.

Therefore, (1) you pay USD to buy EUR and then (2) you hold the EUR you have bought for a while (3) to wait for the EUR’s value to go up against USD. Then (4) you sell the EUR you have bought to collect the profit you have made.

For example, you buy €100,000 against USD when the EUR to USD rate is 1.0590. Therefore, you have to pay $105,900 to buy €100,000:

You expect the EUR’s value to go up against USD and you are fortunate enough to see that it really goes up after a while and let’s say it reaches 1.0690. Therefore, you decide to sell the EUR you have bought to collect your profit. As the rate is now 1.0690, you will receive $106,900 when you sell the €100,000 you had bought:

Therefore, you have made a $1,000 profit:

It can be the other way round if EUR’s value goes down instead of going up. For example, if it goes down and reaches 1.0490, and then you sell the EUR you have bought, you will lose $1,000 because you have paid $105,900 to buy €100,000 while the EUR to USD rate was 1.0590. Now it is depreciated to 1.0490, and so, you will receive $104,900 if you sell your €100,000:

This is how you can make or lose money through forex trading.

How can you buy and sell currencies against each other?

1) there are some brokers who facilitate the trades for you by providing a trading platform software that can be installed on your computer, and connecting the software to currency market. They charge you some fees for each of the trades you do.

To make the work easier for, brokers pair the currencies against each other and create currency pairs.

There are a lot of things you have to learn about the brokers before you open an account with them. Many of them are not reliable and can make you lose money. So be careful.

2) you can trade the currencies against each other through a bank account as well.

Now that I have almost explained what forex is, I’d like to explain what forex is not.

What forex is not?

Some people have some wrong impressions about forex trading.

Forex is not a get-rich-quick scheme

If you become a professional forex trader who can make profit consistently, you can make a lot of money from forex trading. But you can do that only when you become a consistently profitable trader who knows a lot of things about trading and knows how to manage and limit his risks.

It takes time and effort to reach this level. You cannot start making money through forex trading overnight and just by following a friend who is also a beginner and probably has been able to make some successful trades on a demo or a small live account.

A forex trader is called a consistently profitable forex trader if he can make money consistently for several consecutive months and years. He should be able to repeat his success, not that he doubles his account through one successful trade and then keep losing money.

No doubt that even a professional trader loses money sometimes, but the difference is (1) his losses are much smaller than his gains, and (2) he can easily recover his losses. Additionally, (3) the number of his successful trades is higher than the losing ones, and he can repeat this pattern over and over for several months and years.

Keep in mind that trading can be risky and there are some people who have lost their shirt in trading. Most or all of the professional forex and stock traders, have at least one good source of income and use the trading to increase their wealth, not as their main source of income. Indeed, they force their money to make more money for them through the ways like stock or currency trading or other kinds of investments. Therefore, don’t look at forex trading as a main source of income. You have to have a good backup.

Hope I have been able to explain in brief what forex is. Keep following us on this website if you like to become a professional trader who also has some good and stable sources of income and uses the trading as a way to increase his wealth.

How does forex work?

Most of those who ask “how does forex work?”, don’t care about the technical aspect of forex trading. They want to know whether it really makes money or not.

People start learning how to trade forex, because they want to make money. Many of them want to make a living through forex trading and look for having a source of income through forex trading. They want to become full time forex traders who trade forex to make a living.

Some others look at forex trading as an investment opportunity to increase their wealth.

Now the question is whether forex really works for these people or not.

Before I answer this question, I’d like to explain a little about the technical aspect or forex trading and how forex works behind the scene.

How does forex work technically?

Forex or foreign currency exchange is the business of exchanging the currencies against each other for the purpose of making profit. This is what forex traders do. They buy and sell the currencies against each other to make profit when one currency’s value goes up or down against the other one.

Some others, offer a currency exchanging service to those who need to convert a currency to another. For example, tourists have to buy the destination country’s currency. The money exchange agency charges some fees to exchange the currencies to each other for them. You can do this through the banks too, but the private money exchange agencies are used to offer better prices: how to run and manage a money exchange business that makes money

Forex trading is not something new. Its history is as old as the history of money. But the way that retail forex traders trade currencies now, is somehow new. It is done electronically and through the internet. It is almost 100% automatic and it needs no human touch to complete the exchanging process.

To trade currencies against each other as a retail forex trader, you have to open an account with a forex broker. More professional traders, trade through the bank accounts that needs more capital. They buy and sell currencies against each other through a trading platform software, or through their online banking account.

Here, I’d like to focus on this question that how does forex work to make money for forex traders. And, how forex traders can make money with it and whether it is really possible to make money with forex or not.

How does forex work to make money for retail traders?

Theoretically, retail forex traders try to predict whether a currency’s value will go up or down against the other currencies. If they conclude that the value of currency A is going to go up against currency B, then they will buy currency A against currency B. It means they pay currency B to receive currency A.

In case they are correct and the value of currency A really and reasonably goes up against currency B after a while, they will convert currency A to currency B. The price difference makes some profit for them. This is how forex trading makes money for forex traders theoretically.

Now the question is whether this process results in profit in reality and actually or not. Can the forex traders make money consistently? Is forex trading a good and stable source of income? Does it really make money as a full time job?

There is no doubt that the currency market is a big opportunity to make money. There are so many who make a lot of money through this market.

However, to make money through currency trading, a retail trader has to have two things:

1. He has to master a trading strategy.


2. He has to have money to trade with and make more money (profit).

Mastering a trading strategy

There is no special and clear way to master a trading strategy. While it is hard and complicated for most people, some others can do it after a while of learning and practicing. I personally believe that mastering a trading strategy and then making money as a professional trader has four stages:

1. You have to choose a trading strategy and learn the related basics and technical parts.


2. You have to demo trade the trading strategy until you become a consistently profitable demo trader who makes profit on the demo account consistently and consecutively. To make sure that you have reached this level, you have to repeat your success for 6 consecutive months at least.


3. After becoming a consistently profitable demo trader, you have to try the same trading strategy on a small live account to make sure that you can repeat your success with real money too. To make sure that you have gained such an ability, you have to repeat your success at least for 6 consecutive months here too.


4. You can trade with a bigger account to make a reasonable amount of profit. If you can afford, you can even trade through a bank account that needs more capital, because banks usually don’t offer any leverage.

Nobody knows how long it takes to pass the first 3 stages and reach the stage 4. It is different from person to person. However, something which is clear is that nobody can pass these stages without spending enough time and energy. You have to spend time to become a consistently profitable demo and then live trader. You have to practice with peace of mind.

Financial freedom

Now, it is time to refer to the beginning of this article that says “people start learning how to trade forex, because they want to make money…”

Whether you like to make a living through forex trading or you want to look at it as an investment opportunity to increase your wealth, you have to be financially free while you are trying the master your trading strategy and pass the 4 stages I outlined above.

Financial freedom creates the peace of mind you need to spend enough time on learning and practicing. When you are not financially free and you have to make money as soon as possible, you will not have the peace of mind you need to focus on learning and practicing, and you push yourself to start making money as soon as possible.

Therefore, you will open a live account even before you become a consistently profitable demo trader. Then you will push yourself to make money with your live account. But, as you haven’t completed the learning stages yet, you will make a lot of mistakes, and so, you will lose money.

Most traders wipe out their live accounts at least a few times. Unfortunately, many of them start trading with the money they cannot afford to lose. Finally, they give up after wasting a lot of time and money.

You can’t make money through trading, when you HAVE TO make money. This is one of the big differences that trading has with the other money making opportunities: trading strategies don’t work if you don’t choose the right living strategy

How does forex work practically?

Therefore, we can say that making money through forex trading has two main stages:

1. Mastering a trading strategy


2. Having enough money to trade and invest

According to what I explained above, both of these stages are dependent on “money”. You have to have money to master your trading strategy. Then, you have to have enough money to open a reasonable live account. You can start with a small account, but it takes you a lot of time to turn it into a reasonably big and professional account.

Therefore, having a good and strong source of income is a must. This is how forex works. It is not only with forex. It is the same with any trading and investment opportunity, be it currencies, stocks, real estate and…

Forex trading as a full time job to make a living with

Forex or stock trading can’t be known as full time jobs that you can make a living with. They are good and strong investment and money making opportunities, but you shouldn’t look at them as full time jobs. The first and the most important reason is that making money through trading is not just dependent on you, your abilities and activities as the trader. It depends on the markets too.

Sometimes the markets become too slow for several months, and so, you can’t locate a trade setup to make money. Sometimes the markets become too volatile and cause some big losses. You need to have a good and strong source of income and a reliable backup to support your trading venture, otherwise you will be in trouble.

While forex trading is a great opportunity to make a fortune, it is not a business that you can make a living with in long term. It is the same with stock trading and real estate investment. They can help you increase your wealth and grow your capital dramatically. But it is too hard to rely on them as the main sources of income under the normal conditions.

Concluding

It is great that you are after making money through forex trading. But you should consider the facts I explained above to avoid wasting any time and money. As I explained above, having a good and strong source of income is a must for those who want to learn to make money through forex trading, and also for those who have already mastered their trading strategies.

That is why we not only teach our followers the trading techniques, but also help them to establish a good and strong source of income. This is how forex works.

How much do forex traders make per month?

How much do forex traders make per month? What is the monthly earnings potential of the average forex trader? If you’re reading this article, you’re probably fairly new to forex trading, so I don’t want to misguide you.

In fact, I’m going to tell you some hard truths that you probably don’t want to hear, but they are absolutely necessary to learn if you ever want to become a successful forex trader. Your initial reaction may be discouragement, but there is a light at the end of the tunnel.

Please fight the urge to roll your eyes and move on to something more uplifting. Sometimes the truth hurts, but I will absolutely guarantee that if you don’t listen to what I’m about to tell you, you will NEVER be a successful, long-term forex trader.

So how much do forex traders really make per month?

This question is a little misleading for a couple of reasons:

1. Most forex traders are not profitable


2. No profitable trader in any market makes the same percentage of profit each month

These are the questions you NEED to ask:

Why are most forex traders unprofitable?

Despite what you may have heard about how easy it is to make money in the forex market, the truth is that most traders fail. It is also true that you will probably fail at trading, but you don’t have to. The real reason traders fail is probably not what you think.

This is why traders actually fail:

Greed

Most new forex traders have unrealistic profit expectations. They think it will be possible to make 25% – 50% or more month to month. They have dreams of turning their small account into a very large account in just a few years.

This is totally unrealistic. If it were possible we would all be doing it. Most successful traders make a much lower average monthly profit (3%-7% is common). If you’ve averaged 10% or better for more than a year, you’re a rockstar in the trading world.

Take this into consideration:

If you could sustain a 10% average monthly gain, you would more than triple your account every year.

By averaging 6%, you would more than double your account every year.

Starting with $5,000, and averaging only 3% per month, your account would grow to over $170,000 in 10 years.

Warren buffet became a billionaire trader averaging only 30% per YEAR!

I’m not saying it’s impossible to make 25% or more in a month. I’ve done it, and many others have done it. I’m saying its impossible to MAINTAIN such a high average monthly gain. In order to shoot for such a high goal, you will be pressured to take bad trades, overtrade, and overleverage (which brings me to my next point).

Overleveraging

Poor money management is one of the worst account killers for new traders. This goes back to greed, because traders typically overleverage while shooting for unrealistic profit targets.

You should be risking a small percentage of your account on each trade, and you should be risking the same amount on each trade. I recommend never risking more than 2% per trade. Many successful forex traders risk 1% or less per trade, and some very successful and experienced traders risk 3%.

Risking more than a small amount per trade is a death sentence for your trading account because all trading systems go through periods of drawdown. If you’re risking too much during one of these periods, you will, at least, wipe out much of your progress, if not completely wipe out your account.

Consider these two examples:

If you lost 10 consecutive trades, risking 2% per trade, your account would be down about 18%. You would need to earn about 22% of the remaining account just to get back to your starting balance.

If you lost 10 consecutive trades, risking 10% per trade, your account would be down by more than 65%. You would need to earn nearly triple the remaining account (187%) just to get back to your starting balance.

Not only does responsible money management help preserve your capital during losing streaks, it also helps to keep you trading your edge mechanically. That’s because losing 1% or 2% on a trade does not sting nearly as much as losing 5%, 10%, etc….

It’s easier to deal with the losses, psychologically speaking. You’re more likely to pull the trigger on the next trade, and let your edge work itself out over time. And that’s exactly what you need to do, if you know you have a profitable trading method working for you.

Insufficient testing

I cannot stress this point enough. Testing is the backbone of a successful trading program. Most new traders are too impatient and undisciplined to thoroughly test new strategies. I think this, again, goes back to greed, because we all want to fire our bosses as soon as possible. You want to get that account snowballing quickly, but this is a costly, rookie mistake.

The problem is that, without sufficient testing of your trading system or any new trading setup, you’re not going to know how it will hold up during changing market conditions. You need to know if your trading system can stay profitable through increasing/decreasing volatility, growing/shrinking average daily range, impactful news events, etc….

I would not even consider a new trading strategy unless it had proven itself to be profitable after, at least, a couple hundred backtesting trades – either through my trading platform or using a backtesting software, such as forex tester 3.

Next, I would forward test (with a demo or micro account) the new strategy for, at least, a few months. The more time you spend doing this the better off you will be down the road because you will have absolute confidence in a system that has proven to be profitable over time.

Knowing exactly what your system is capable of, and proving to yourself that your trading system is profitable over months or (preferably) years worth of different market conditions will go a long way in helping you to mechanically trade the edge that your system gives you – even when you’re experiencing a losing streak.

Lack of discipline

I’ve mentioned discipline a few times already, and it’s an import factor in profitable trading. It’s another psychological aspect of trading that can either make you or break you. Most new traders lack discipline in every aspect of their trading, from testing to execution.

It takes discipline, as well as patience, to properly test a new trading strategy. Most traders don’t have the discipline to do any manual backtesting at all. They simply learn a new trading method, and demo trade it for a week or two, or worse, they go straight to live trading.

It takes discipline to keep trading when you’re losing. If you’ve done your due diligence, then you already know for sure that you’re trading a consistently profitable trading system. With discipline, you will be able to keep pulling the trigger on the next trade and let your edge play out over time.

Sometimes you just have a bad feeling about a trade, although it meets your criteria. It takes discipline to mechanically trade every setup that comes along, but it’s a must. As soon as you start trading subjectively, you’ve abandoned your edge and you’re gambling.

Note: there is limited room for some subjectivity in some aspects of trading when you become much more experienced, but you should strive to trade as mechanically as possible even then.

Lack of discipline can also lead you into catastrophic behaviors, such as overleveraging (which I mentioned above) and revenge trading. Revenge trading is when you re-enter the market because you’re trying to earn back money that you’ve just lost – not because your trading system has provided another quality entry trigger.

Overtrading could be mentioned in the same breath. Successful, disciplined traders trade less, because they only take the best trade setups. They have the discipline to wait for the market and their trading system(s) to provide them with quality setups, rather than trying to force bad setups to meet some unrealistic profit target.

System hopping

If you’re a new forex trader, it’s absolutely necessary to find a consistently profitable trading system to start testing. As of right now, there are three profitable trading systems reviewed on this website that I have personally traded and recommend. However, I mostly use day trading forex live now.

Note: read my full reviews of these trading systems to see which one will fit your trading style and schedule, as each of these systems are completely different.

If you’ve been trading for a year or two, the truth is that you’ve probably already traded a few profitable trading systems. You just were not confident enough in them, or disciplined enough to let their edge play out over time.

You probably didn’t test long enough, started trading your hard earned money, lost a bunch of it, blamed the trading system you were using, and moved on to the next system. This is a constant, destructive cycle that a large majority of unsuccessful traders are trapped in.

There is no “holy grail” in trading. The point is to find a system that makes sense to you, and test it to see if it actually works. Just as importantly, you need to test it to prove to yourself that it will be profitable in the long term.

You’re looking for something that will provide you a verified edge in the market. You need to have an unwavering belief in the trading system that you are using. Once you do, you simply have to continue to trade the edge that your system provides for you with discipline.

Many traders unwittingly give up on profitable trading systems because they don’t trade them long enough, or with enough discipline, to let the edge work out for them. Even the best traders in the world lose lots of trades, but they have the discipline to let their edge play out.

What is a realistic average monthly profit expectation for a successful trader?

This question is more in line with the way you should be thinking, although its answer may be just as discouraging: it depends on the trader, their trading system, the market, etc….

Successful traders simply trade the edge that their trading system(s) give them, and take what they can get. They don’t set goals and they don’t force trades to meet those goals.

A really good year for a successful trader might look like this:

January +5%
february -2%
march +9%
april +12%
may +3%
june +9%
july +15%
august +20%
september +7%
october -4%
november +5%
december +5%

A trader with this record, if no money was withdrawn from the account along the way, would have earned over 120% – more than doubling their starting balance! Their average monthly profit percentage would be 7%.

Even as I’m writing this I can picture the amateur traders saying to themselves, “that’s not enough! I’ll never be able to do this for a living at that rate.” that is greed and impatience doing what they do to every inexperienced trader.

You could make more than what is depicted in the example above, but if you don’t change your attitude and expectations, you will most likely make much less. Instead of asking yourself, “how much can I make per month as a forex trader?” you should be asking yourself, “am I willing to do what it takes to become a successful forex trader?”

Still looking for a profitable trading system? I've tested 10+ systems. Only 3 were profitable! Learn more about my #1 recommended trading system, day trading forex live.

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16 comments

Hi there,
I just want to thank you for taking your time to educate us newbie (& losing) traders.

I enjoyed your ebook “how to choose better support and resistance levels“.
I like your site, (not that its particularly important, but the font you use in your articles and site are very nice. I look forward to wading through your articles, and give your recommended trading systems a try out.

Thanks for the kind words, J! I’m glad you enjoyed the ebook. Let me know if you have any questions.

I’m new to forex trading & was thinking of start live trading with $500.
I will add $50 to my account every month.
Target monthly return 6 %

Thanks for commenting! Are you using a profitable trading system? If you’ve got a good trading system, targeting an average of 6% per month is certainly realistic – especially if you’re risking 2% per trade.

Since you’re just starting out, I wouldn’t recommend 2% per trade, though. You should risk the smallest amount that your broker will allow, and slowly build up your risk once you prove that you’re profitable.

Some people would tell you to demo trade first, which is actually not a bad idea. However, I find that you gain more realistic experience risking real money – even if it’s a small amount. It’s just different psychologically.

Your plan sounds good to me. Just make sure you’ve got a good trading system, and follow the rules faithfully. Good luck!

Hi thank you for your article

No problem. Thanks for reading.

Hi chris
thank you for the helpful article.
But I’m a little bit confused about the realistic monthly returnees, if I could average 6% monthly (from the comment above) and it’s certainly realistic, as you replied, isn’t this more than 50% annual average returnes? I thought this is impossible, specially doing it constantly!

Could you please clarify, thank you.

Thanks for reading. I never said making 50% annually is impossible. I know for a fact that it’s possible.

Hi chris hope you can help me on this one , have you aver seen traders who actually trade using a 1:1 risk reward ratio .. Of course witha hit rate above 50% .. And well in the en d they are actually profitable ?? Or succesful traders always use a higher risk to reward ratio?

Sure. That’s essentially what scalpers do. I know some scalpers are successful, although I haven’t personally met or spoken to any.

In my experience, it’s best to shoot for the highest reward to risk ratio that you can consistently achieve with your trading system. In DTFL, we target 2:1 reward to risk, although we sometimes close trades early for various reasons.

I’ve successfully traded other systems where the reward is targetted dynamically. If you can make a static 1:1 work for you, go for it. I haven’t been able to.

How is it going?Happy new year in advance.Wish you a prosperous and fruitful year ahead!Have you heard of compound interest where monthly return is being accumulated over time?Well,here is my anticipation for the new year 2018.

Starting with an account balance of $500,30% monthly return.That will be 500 x 1.3^12 = $11,649. Is it achievable?

Hope you will suggest good tips or advice.Stay healthy and happy trading! Cheers !

Sorry for the late response and thanks for the kind words. It’s been busy over here due to the holidays.

I’ve heard of compounding returns, of course. That’s the goal of most traders. However, shooting for 30% per month is unrealistic, IMO.

Most new traders would be lucky to make 30% per year and keep it. Sure you can make 30% in a month by taking too much risk. In fact, when I first started, I nearly doubled my account in a month on several occasions. I gave it all back, though.

If you can’t hold on to it, what’s the point? My advice is that you learn to trade first. Don’t focus on returns as much in the beginning. See what you can make risking 1% – 2% of your account per trade or less (start with a much lower percentage while practicing).

If you find that you can make consistent (I mean over months and years) returns, start adding money to your account whenever you can. You can even get other investors to help you fund a significant account as long as you can prove that you make consistent returns.

Just my 2 cents. That’s probably not what you wanted to hear, but I’m trying to help you skip those rookie mistakes.

Hi chris, thanks for this article
it really wake me up to prevent most rookie’s mistake, and I hope I can do those points you mentioned above over time.

I’ve also read couple time that to get 10% profit/per month on consistent basis would be considered great even for pro trader.
But I wonder about the calculation, hope you can make this clear for me :p

– let’s say I take 1 trade a day, so about 20 trades a month
– my risk to reward ratio for every trade is 1:2
– every trade I risk 1%, so for every winning trade I get 2% profit
– my average winning percentage is only 50%
– I’m not compounding my profit, so my 1% risk towards initial capital is always the same amount
– I win 50% (10 trades) and lose 50% (10 trades)
– for winning trades I get 10 x 2% = 20%
– for losing trades I suffer 10 x 1% = 10%
– at the end I got 20%-10% = 10% profit that month

So my question is why is it hard even for pro trader to get more than 10% a month? And months with 2 digit profit % is not sustainable for the long run, maybe only 1-3 months per year (my understanding from your article).

For my example, I think my risk ratio 1:2 is moderate, risking 1% every trade is average, 20 trades a month is moderate between daytrader and swing trader, and 50% winning percentage is quite low for pro trader (I think pro trader should be on 60% – 70% winning percentage) and it still produce in ideal calculation roughly 10% a month.
So even though I’ve read couple times about ‘even pro trader hardly to get 10% a month consistently’ I still don’t understand the thought process behind it.

Please pardon me if I have weird logic on my simple calculation because I’m a newbie and still do paper trading.
It would be great if you can share your two cents about it.

I’m glad you’re finding this site useful and thanks for your question.

A 50% strike-rate with a 2:1 reward-to-risk ratio is like the holy grail of trading. Most experienced traders who use a 2:1 reward-to-risk ratio (high reward-rate) trading system have a strike-rate closer to 40%, in my experience.

Your strike rate can generally go up if you use a lower reward-to-risk ratio (high strike-rate) trading system because it’s easier to be right for a shorter amount of time.

I’m not advocating a high strike-rate system, though. In fact, I use a high reward-rate system myself. There are definitely pros that achieve 60%-70% (I’ve even seen 80%) with high strike-rate systems, but the profit percentage probably wouldn’t blow your mind.

Another thing you have to keep in mind is that typically when traders are bragging about high strike-rates, they are including small wins and early exits (not all of those wins were a full 2:1 profit target hit).

Lastly, 20 good, qualified trades in a single month are more than most good trading systems will produce. You don’t want to force yourself to take a trade every day. You have to take the qualified trades as they come. Sometimes that’s 1 or 2 in a week. At times, you may take multiple trades in a day.

The key is to be consistent. You need to try to take every qualified trade that comes along according to your trading plan but not more. New traders usually trade way too much. Experienced traders stay out of the market until the moment is just right. That means fewer but better quality trades and more profit.

The truth is that when you consider trading with your own hard-earned cash, brokers, fees, and everything else that you have to deal with as a trader apart from your trading system (and that’s assuming you’ve actually got a profitable trading system), you’re lucky if you end up with a slight edge at all. But a slight edge is all it takes if you’re persistent.

I don’t want to discourage you. Maybe you’ll beat the odds. If you’re not successful right away, though, just remember what you learned here. Be happy with small, consistent gains and build from there. Good luck!

Woww thank you so much for your reply chris. I wasn’t expecting such a detail answer, I’ll keep in mind. Really appreciate it sir!

No, you didn’t discourage me at all, instead I think it’s better to know bitter truth about trading world ASAP before I walk further. And the deeper I’m into this world the more I realise that I know nothing haha.

My focus for now isn’t profit but to protect my capital from losing. So which one is better in your opinion
1. Paper trading until at least I can protect my capital
2. Or open micro account so I get the taste of real tension (if it go into zero, it’s OK for me as I’ll take it as tuition fee)

Thanks again chris, it’s so kind of you to spare your time answering newbies like me.
Wish you the best ^^

No problem, adam. Glad I can help. To answer your question, you need a good trading system and trading plan first and foremost. If you don’t have those, you’re just gambling.

Maybe you already have a great trading system and a solid trading plan that you can stick to. If so, you should definitely demo trade (or paper trade) it first for a couple of reasons. The main reason is that you need to build confidence in your trading system and trading plan so that you can keep pulling the trigger when the drawdowns come (and they will come). No system is impervious to it.

That being said, you should start trading a small, live account (using the smallest trade/lot size your broker allows) as soon as you can. No amount of practice can prepare most people for risking their real, hard-earned cash. That’s usually when the psychological mistakes start happening.

Once you’re consistently profitable trading small amounts of your real money, gradually increase your trading size to 1% or 2% at the most. Some people risk more per trade, but I wouldn’t recommend it. Risk too much and you’ll wipe your account out during your first drawdown.

So, let's see, what we have: forex trading may be profitable for hedge funds or unusually skilled currency traders, but for average retail traders, forex trading can lead to huge losses. At can you make money off of forex

Contents of the article

• Actual forex bonuses


• Can forex trading make you rich?
  
  
  
  • Key takeaways
  
  
  
  


• Excessive leverage


• Asymmetric risk to reward


• Platform or system malfunction


• Can you really become a millionaire from forex...


• Can I become a millionaire through forex trading?
  
  
  
  • What are those conditions?
  
  
  
  
  • Behavior, life and work style
  
  
  
  


• How can you become a consistently profitable...
  
  
  
  • False forex success stories
  
  
  • The hassles of following too many trading...
  
  
  • A source of income is really good
  
  
  • Do it the right way:
  
  
  
  


• How much money can you make from forex trading?


• So, how much money can you make with forex...


• How much do forex traders make?


• How much do forex traders make A day?


• How much do professional forex traders make?


• How much do professional forex traders make A day?


• How much money can you make trading forex?


• How much money do I need to start forex trading?


• Learn to trade forex
  
  
  
  • How much money can you make from forex trading?
  
  
  • How much do forex traders make?
  
  
  • How much do forex traders make A day?
  
  
  • How much do professional forex traders make?
  
  
  • How much do professional forex traders make A day?
  
  
  • How much money do I need to start forex trading?
  
  
  
  


• Can a beginner make money with forex


• 1) mastering the basics of forex trading
  
  
  
  • A good broker is essential
  
  
  • Adopting a strategy
  
  
  
  


• 2) how beginners can make money with forex
  
  
  
  • Start with a demo account
  
  
  • Do research
  
  
  • Trade with the trend
  
  
  
  


• 3) forex trading mistakes to avoid


• 5 harsh realities of making money in forex


• Harsh reality 1: forex is never quick and easy


• Harsh reality 2: most systems are useless


• Harsh reality 3: demo trading won’t prepare you...


• Harsh reality 4: you need time


• Harsh reality 5: adapt or die


• So, should you bother trading forex?


• The next step


• Forex trading: how to actually make money as a...


• (partner content) there are a lot of markets...


• What is forex and how does it work?


• What are the major currencies?


• How to pick a forex trading strategy


• How to make money on forex


• What is forex and how to make money with it?


• What is forex?
  
  
  
  • There are two kinds of forex traders
    
    
    
    • 1) retail forex traders:
    
    
    • 2) professional forex traders
    
    
    
    
  
  
  
  


• How can you make money with forex?
  
  
  
  • Day trading with shorter time-frames
  
  
  • The first step
  
  
  • Don’t trust the fund and account managers
  
  
  • For newbie forex traders
  
  
  
  


• How do you make money through forex trading?
  
  
  
  • How can you buy and sell currencies against each...
  
  
  • What forex is not?
    
    
    
    • Forex is not a get-rich-quick scheme
    
    
    
    
  
  
  
  


• How does forex work?
  
  
  
  • How does forex work technically?
  
  
  • How does forex work to make money for retail...
  
  
  • Mastering a trading strategy
    
    
    
    • Financial freedom
    
    
    
    
  
  
  
  


• How does forex work practically?
  
  
  
  • Forex trading as a full time job to make a living...
  
  
  
  


• Concluding


• How much do forex traders make per month?


• So how much do forex traders really make per...
  
  
  
  • Why are most forex traders unprofitable?
  
  
  • Greed
  
  
  • Overleveraging
  
  
  • Insufficient testing
  
  
  • Lack of discipline
  
  
  • System hopping
  
  
  • What is a realistic average monthly profit...
    
    
    
    • Related posts
    
    
    
    
  
  
  
  


• 7 things each trader must accept to trade...


• Dealing with the psychological highs and lows of...


• Are women better traders than men?
  
  
  
  • 16 comments