I haven’t been trading for a very long time but I could say that I’ve invested quite a bit of time on this already. However, I can’t say that my results are spectacular to even consider doing this full time. Is trading forex full time a myth or is it really doable?
I would say yes because there are people who choose forex trading as a profession. Getting the required skill would take time though. My friend knows someone but it took him years to become professional and be consistently profitable.
Yes, it is feasible, with a good plan in place, and the necessary education on how to trade properly and proficiently to become a competent trader, the first objective.
In order to make a living, money makes money. IMO, you would need an account size to manage a monthly amount that would cover all your outgoings and expenditures.
For example, a 24% APR is achievable for experienced traders. Which means an AVERAGE monthly profit of 2% is the aim. Of course, be aware that profits are not income, as some months will be losses.
So, let’s say $2,000 is your monthly expenditure, you should aim to bring in FX profits around $2,500 on average to cover unexpected events.
That means having an account size that will support your outgoings, without drawdowns affecting your lifestyle. For extreme safety, a $100,000 account should be the minimum starter size, which allows for 2.5% losses any one month without any concern.
I’m aiming to reach a $50,000 account in six years by adding $7,500 a year from my current income, which will compound to that approximate level. I’m confident that this amount would be sufficient to support a $2,500 lifestyle - at least for several years !!
Which is not easy, is it? And why most retail traders give up.
An excellent summary of reality.
And this is one of the reasons I decided to look at mining (or more specifically farming - Chia tokens. With an investment about the size of your intended annual add from current income, I believe I will be able to maintain a Chia farm with about 2,000 plots with a time to payback of less than 15 months. Income is likely to be around $250 per month. If I get that far, I will really be able to see if that can be scaled out to a serious production rate. It is as risky as crypto itself, and could go two ways - to zero (in which case I will have the biggest home NAS drive in the UK) or back to where it started or beyond, in which case time to payback will shrink to about 3 months. Most of our UK properties don’t net that amount of income each month, and for all the hassle and leveraged mortgage risk, I rather fancy a crypto income stream as we deleverage our property and reduce its income stream
Income is dependent on strategy. You need a stable strategy which is consistently profitable over the long term to have the ability to plan your life around profits.
I’m not completely sure how but it always seems impossible to take a strategy that has a return of X% and simply double the size of positions and get back 2X%…
I think we need to be flexible when talking about strategy. IMO, there’s not one cap that fits our style of trading. For example my Ichimoku delivered the goods in 2020, but 2021 has been a struggle.
Therefore I used my backup strategy of scalping breakouts, but with limited risk until I understood in some depth how the markets moved - or more accurately, how markets should move. A pure price action strategy, with a trend direction bias.
Why? and What?
I believe today’s markets react more quickly to anything relating to Covid and economic fundamentals. There are many contra movements, which, IMO, are being utilised by financial institutions to gain an edge. Which means, job security could be a concern.
I’m also influnced by my pro trader friend who has developed around six EAs which are utilised for different marketing conditions. He’s consistently profitable, and his drawdowns are minimal. He manages one of my live accounts, as I believe robotic trading - which are used by the financial institutions - will be the new norm for retail traders.
Fortunately, I can also indulge FX trading indices as a hobby on a minimal account size. And that is a great challenge of money management and risk exposure control. I’m also trading a live prop firm evaluation, which I have a year to succeed.
Keep going. take care, and best of luck.