I am a newbiew in Forex but am very comitted to master trading, I don’t mind spend 70 hours/week or more to master Forex trading. In fact I don’t see learning Forex as working ,it is fun for me and enjoyable.
A little about me :
I am a small business owner. I lost a lot of money and a house in mutual fund and stock trading in 2008. I was totally devastated because of this. This occurence has caused me to be a very risk averse person.
Lost a lot of money because :
Over confidence
I used money that I can’t afford to lose
Emotional factors
Money management
Noob skill in trading.
Other classic noob mistakes
Lessons learned , it’s a lesson that I will never forget for life because the experience was so painful, The desire to be a full time, profitable trader never completely ceased though.
I now want to go back into trading after 5 years.
What I am going to do :
I will focus on psychology, RR and money management. I will try everything to enforce discipline.
I will pick a simple, yet proven trading system at Forex Factory. Trading Made Simple @ Forex Factory
and will stick to this system only until I master it, won’t waste my time playing/experimenting with other systems.
I will quit my small business and get into forex full time. The business has not been profitable for the last 3 years anyway and I don’t enjoy it but with trading it feels different, it doesn’t feel like work at all.It feels fun.
What I have :
I have $ 125.000 saving. $ 80.000 will be enough to cover my expenseses for 2 years. After 2 years of learning Forex , I will be left with $ 45.000.
Questions :
Is it possible for me to make consistent $ 5000/Mo through Forex after 2 years or hopefully 1 year using seed money of $ 45.000?
I will only learn and apply 1 proven trading system , Trading Made Simple @ Forex Factory
I will focus on psychology, RR and money management. I will try everything to enforce discipline.
Cool that you already have the mindset that your going to lose almost 50% of your Investment, How do you know that already/?
If you didnt handle it well the last time you lost, what makes you think you wont In FOrex, because really, its a totally different animal, and it WILL bit your entire head off without notice…
I do not want to keep you away from trading your money, but seriously:
Your are talking about making more than 11% return evey month on a regular basis… I think it’s a bit crazy and would mean taking to much risk (cf your other investments…). 5% would already be a more legitimate target?
Though you would get $2,500 every month… Do you know what the taxes are on profits in your country? In mine, it is at least 30%, so you would get $1,800 a month in the end. Without any of the benefits of working in a company.
If you work 70h a week on this, you will get emotional on your trading, and that’s when you will make mistakes.
Thus I would recommend to keep your job (or find a better one that suit you more), learn about trading and financial markets (and not take directly an existing trading system…), and send 30min to 1hour a day to look at the market and place your trades. Demo account first, and then small money, to avoid the emotional part.
And then you might be able to see how much you earn, and if you could become a “professional” trader.
But still, I argue that spending all your time on your computer watching the market will lead you to be more emotional about your trades, and thus you will make more mistakes and earn less money than if your keep your job. But that’s only my advice!
As a small business owner consider this. Your starting a new company, and you have $45,000 in start up funds. How long will it take you to grow your business 133% returns per year (uncompounded) as a start up? How long does it take to get your operations ramped up and efficient? How about your costs of doing business and overhead? How about proving your business plan is viable? Targeting the correct market and consumer?
substitute company/business for trading and you have your answer.
Making $5000 per month is not too hard these days with increased leverage and in particular high volatility. The problem is making $5000 consistently every month. I have worked in the financial markets for the past 9 years and have seen people make and loss a lot of money including myself. Consistency is key.
If I was looking to invest 45k i would look at allocating a % of it in a steady growth fund and self directing the rest. I personally have most my savings in a trading account that is managed by a fund manager who I know for some time and I can trust. The account is set up so that if the value of it goes below 80% he is automatically disconnected. So far I am very happy with it and I can login and check the account at any time. It made 55% last year so I am considering put much in it this year.
In conclusion an invest of 45K would yield $2062.50 a month in the first year and $3196 in the 2nd year based on the last few years performance.
You need to be cool…
Give the time on learning for 4/5 months without investing a real money.
We all here are in different threads. Come there and see how much you understand.
The answer to your question depends on who you are and how you trade. Getting that amount every month after 2 years is possible, but requires alot of balls and risk. You have to be a very smart person and learn all there is to know about forex in just two years. Technically, it is possible, but it depends on you.
Why do people think that trading is all about money. They think that if they have big money to invest they will make big returns. Making money from trading is all about knowledge. Keep your money in the bank and learn how to trade first. Consider paying a professional trader to teach you how to trade. You don’t need 45k to make 4000 per month, you can make 4000 per month within 12 months from a starting balance of 1000 if you know how to trade.
Have you for example ever looked at account data from a retail forex brokerage ?
Have you read any peer reviewed papers from researchers who did ?
Have you read the quarterly reports published by forex brokers regarding the profitability of their clients ?
Have you read financial reports of major financial institutions who trade foreign exchange and seen their returns ?
Have you studied long term returns of CTA’s who trade forex, and seen their typical returns ?
Have you looked at the results of forex traders on platforms such as myfxbook, collective 2 etc ?
If you have, give me one example, just one, of anyone capable of achieving a consistent 10% per month, on any sized account. Good luck trying to find one
How long it takes depends on many things. Your trading skill, the risk you want to place yourself at, your average weekly earnings in R, your trading equity, etc…
1.) You dont need to invest 45000 to make consistent 5k
2.) Why on earth would you even start off going live after 2 years with 45,000? You are still in the high probability of blowing cash up.(been trading only for 2 years in a game where 95% fail)
You’re better off finding a strategy (you said you found one, thats good) and demoing it untill you triple you’re demo account then go live with 5,000 ( you might end up blowing the account but atleast you didn’t lose 45k). The point i’m trying to make is a lot of traders lose fortunes before they start making consistent profits, don’t be one of them. Based on your psychology, fear and greed (and trading forex market!) it can be extremely expensive before you start seeing the light in the Forex market. At the same time it can be a big blessing, if and only if you learn to preserve your capital for when the time is right.
To answer your question, in order to make 5k per month profit it takes 2-4 years and screen time… But learning curve can be shortened by logging trades, using an emotion log and reading Mark Douglass trading psychology. Good luck
“The point I’m trying to make is a lot of traders lose fortunes before they start making consistent profits, don’t be one of them. Based on your psychology, fear and greed (and trading forex market!) it can be extremely expensive before you start seeing the light in the Forex market. At the same time it can be a big blessing, if and only if you learn to preserve your capital for when the time is right.”
And yes I fully agree with you too. I have traded for just 3 months and I know how to be profitable. I know I can easily be since I am profitable 65% of my trades. Still I bust my account. Why? Because I was not ready and probably I am not ready yet.
Hope a micro account as soon as possible: YES!
Invest more than 250$ before you know you can be profitable: NO!
Being profitable: It is not about having a winning system. It is about sticking to it and to the basic trading rules. For you this is maybe easy for someone this could take years.
I hope you get better what I meant now. Sure I wasn’t clear at all.
