Making money on Forex and trading for a living

[gasanvill]

[B]Hey guys,
[/B]
I wanted to make a post about the journey to making money on Forex and trading for a living. The reason for writing this is because every once in a while I see threads like: “Is Impossible to make money on Forex” or “Forex is a scam, and you can´t make money”. So, as a profitable and professional forex trader I am here to talk about this topic, give some tips and hopefully be helpful for newbies and also for more experienced traders. I am not here to prove anything, I am just here to tell you my experience.

Personally, those kinds of threads really upset me because it can be very easy for a newbie to read that and lose all motivation. So if anybody has failed on this market, it doesn´t mean that is not possible to make money. It only means that YOU FAILED. Losing people always blame someone else. Winners fail, but understand that is their fault and start over again until they make it.

I have been trading forex for almost 10 years , and I have failed many times, I blew accounts and I even gave up trading for a year. But then I came back, put all my effort until I finally became consistently profitable. That period of my life took me like 3 years, and it was only the beginning of a long journey.

I trade my own funds and manage a considerable amount of money from other people. I have a very comfortable live from trading. This doesn´t guarantee future success, but I am constantly reviewing my strategy, improving it and adapting to new market conditions. I have the freedom to spend time developing new strategies and back up plans.

[B]The first step: Became profitable
[/B]
This is the first step that will take you 2-3 years, depending how much time you dedicate. Or if you want to put it in hours, I would say around 2,000 of study and practice. Some people need more, some people need less. If you have a day job, you won´t have the pressure to make money so your only worry is to study and practice.

I am not going to give the details of my strategy here, but I can tell you what worked for me: Trend Trading. The 5 principles that I follow:
[B]
-When price is going up, I look for places to buy
-When price is going down, I look for places to sell
-Let winners ride
-Cut losses short
-Follow strict money management rules[/B]

I don´t want to go into further details, cause is not the purpose of this thread, but if you incorporate those things into your system, you will notice a significant change. Just keep it simple. The good thing about having a very simple system is that if it goes wrong, it’s easy to see what happened. When one trades a very complex system, there are many ways it can fail and one gets all tied up in knots trying to determine what needs to be done to fix it.

[B]Being profitable and Trading for a living: 2 different things[/B]

So, first: We have to understand the difference between being consistently profitable and trading for a living. Yes you can make consistent money, but can you live from it? Can you sit in front a monitor 8 hours a day? Can you accept that there will be months that you will be breakeven or losing money?
Trading for a living with your own funds is one of the most difficult things that exist. Psychologically is brutal, because if you don´t make money then you can´t pay bills, buy food, etc. And it gets worst if you are married and have family to support.

Ok, So I am going to divide trading for a living into 3 different paths that you can choose, once you have a proven record that you are profitable:

[B]1) Trade with your own funds:[/B] This is the hardest way. If you make money you eat, if you don´t make money, you are dead. My first year I quit my job I trade with my own funds and it was by far the most difficult, challenging, stressful and frustrating activity I have ever being involved. I made money, yes, but I was constantly in a bad mood, or have a good day and then a bad day. It wasn´t healthy. If you want to go this way, then is fine, but with a plan for moving forward from this stage. Let me give you some advices that will make your life less painful: a) Save at least for 1 year of expenses. So you don´t have the pressure to make money every month. b) Start with a considerable amount of capital. Let´s say 100k. If you make 50% a year, then is a good amount of money.

[B]2) Trade with your own funds and also start a forex school or give forex lessons (paid).[/B] This is the reason you see many forex gurus or forex online courses. Because some professional traders want to have also a fixed income, well is not totally fixed because it depends of how many students you get, but is less variable than income for trading. People often say that if you can´t win, then you can teach, and that gurus are a scam. NO THEY ARE NOT. At least not all of them, and certainly not because of that reason. Let me tell you that this guru thing happens not only in trading, I have seen it in other speculative activities, like online poker. So the reason for teaching is this: Having less variable income, and adding more fixed income. If you ever are going to pay for a course or attend a seminar (a paid one) make your research and make sure that the trader speaking has a good record.
[B]
3) Trade your own funds and manage other people money.[/B] Here is where you can reach heaven. This is by far, the most rewarding activity if you are patience enough. Once you manage a considerable amount of money, then be prepared for the big bucks. This is the category I am, so I will be more specific about it:

After trading with my own money I decided to expand myself and started a little forex fund. Usually there are two types of commissions that you win in a fund: management fee and performance fee. The management fee usually is 2% per year and you get paid regardless if you make or lose money, so it is a fixed salary. And performance fee is 20% of winnings. If you run a little fund with 10million dollars and you make 20% a year, then you get paid more than 200,000 dollars on management fee and 400,000 in performance fee. Not bad.

To make 20% is a really achievable goal, and the risk will be very low too. You can expect a drawdown of 5-7%. Quite opposite that if you are a retail trader with a small account, you need to increase your exposure in order to make more money. If big hedge funds make 20% a year is because they take very little risk. Usually they have like 50 positions with less than 2% risked in global. The less thing you wanna do is show your investors a drawdown of more than 10%.

One of the keys to succeed is to let the fund grow. That is why your investor profile must be a guy that wants to invest for the long term, like a 50 year old man that wants to make a little fund for his retirement, so his not going to take out money every month. He is going to leave it there for at least 10 years, allowing the fund to grow. If you give an investor 30% of returns per year, he will trust you their children for the weekend.

All this aspects of managing people funds are aligned perfectly with what professional traders at investement banks and at big hedge funds do. They have a regular salary based on management fees and a big bonus at the end of the year if they make money. And also, most of the winnings are reinvested so that allows the fund to grow. Retail traders do the opposite: They constantly withdraw money because they need to live, so they don´t allow it to grow. They over expose themselves because their small account, and when a big downswing hits them…its over.

The difficult part when starting a fund is to raise money. You need to have a record of being profitable. But you can start with family, friends and then move to new investors as your fund grows. Is a difficult path, I am not going to lie you, but if you are patience then the reward will come. By the way, once you are managing a considerable amount of money, split the fund into 3 brokers.

Right now I spend 20% of my time trading, 60% of my time looking for new investors, and 20% developing new trading strategies so I can have a back up plan. I have removed almost 100% the psychological aspect of making money every day, so I can focus on improving my strategy, study the market and increase the size of the fund. I´ve had difficult times, but since I have more than 1 strategy I can reevaluate things and recover. This will assure you to survive in the long term.

So I laugh when I read here people complaining because they can´t make money after 2 years trying, and that forex is a scam. They don´t even understand that making consistent money is only the beginning of a long journey. Is only the tip of the iceberg.

I really wish to newbies good luck in this journey, is a long and difficult one, but if you put all your effort you can make money and have a very comfortable life. And to answer the question: Can you make money from Forex?[B] YES YOU CAN.[/B]

Cheers,

[dianajs]

It’s really good to read such a positive post. Frankly, I’ve been trading for a while so I wouldn’t say I am a newbie, but I still lose motivation when I read the threads you are referring to. I firmly believe one can make money off forex, even to the point of actually becoming a fulltime trader, but like any other job that requires lots of studying, it takes time and effort and it’s not something that can be achieved over the course of a few weeks, or even a few months.

[bearish]

So far I am not yet treat forex as full time business but still have offline job with salary, and forex busness is only way to get additional income forme, although not always able increasing money but sometime loss occur, but so far still enjoy in this business, I see positive side about forex which this opened for everyone and we have same opportunity to become good tarder.

[Forex_Verified]

[B]Hey guys,
[/B]
I wanted to make a post about the journey to making money on Forex and trading for a living. The reason for writing this is because every once in a while I see threads like: “Is Impossible to make money on Forex” or “Forex is a scam, and you can´t make money”. So, as a profitable and professional forex trader I am here to talk about this topic, give some tips and hopefully be helpful for newbies and also for more experienced traders. I am not here to prove anything, I am just here to tell you my experience.

Personally, those kinds of threads really upset me because it can be very easy for a newbie to read that and lose all motivation. So if anybody has failed on this market, it doesn´t mean that is not possible to make money. It only means that YOU FAILED. Losing people always blame someone else. Winners fail, but understand that is their fault and start over again until they make it.

I have been trading forex for almost 10 years , and I have failed many times, I blew accounts and I even gave up trading for a year. But then I came back, put all my effort until I finally became consistently profitable. That period of my life took me like 3 years, and it was only the beginning of a long journey.

I trade my own funds and manage a considerable amount of money from other people. I have a very comfortable live from trading. This doesn´t guarantee future success, but I am constantly reviewing my strategy, improving it and adapting to new market conditions. I have the freedom to spend time developing new strategies and back up plans.

[B]The first step: Became profitable
[/B]
This is the first step that will take you 2-3 years, depending how much time you dedicate. Or if you want to put it in hours, I would say around 2,000 of study and practice. Some people need more, some people need less. If you have a day job, you won´t have the pressure to make money so your only worry is to study and practice.

I am not going to give the details of my strategy here, but I can tell you what worked for me: Trend Trading. The 5 principles that I follow:
[B]
-When price is going up, I look for places to buy
-When price is going down, I look for places to sell
-Let winners ride
-Cut losses short
-Follow strict money management rules[/B]

I don´t want to go into further details, cause is not the purpose of this thread, but if you incorporate those things into your system, you will notice a significant change. Just keep it simple. The good thing about having a very simple system is that if it goes wrong, it’s easy to see what happened. When one trades a very complex system, there are many ways it can fail and one gets all tied up in knots trying to determine what needs to be done to fix it.

[B]Being profitable and Trading for a living: 2 different things[/B]

So, first: We have to understand the difference between being consistently profitable and trading for a living. Yes you can make consistent money, but can you live from it? Can you sit in front a monitor 8 hours a day? Can you accept that there will be months that you will be breakeven or losing money?
Trading for a living with your own funds is one of the most difficult things that exist. Psychologically is brutal, because if you don´t make money then you can´t pay bills, buy food, etc. And it gets worst if you are married and have family to support.

Ok, So I am going to divide trading for a living into 3 different paths that you can choose, once you have a proven record that you are profitable:

[B]1) Trade with your own funds:[/B] This is the hardest way. If you make money you eat, if you don´t make money, you are dead. My first year I quit my job I trade with my own funds and it was by far the most difficult, challenging, stressful and frustrating activity I have ever being involved. I made money, yes, but I was constantly in a bad mood, or have a good day and then a bad day. It wasn´t healthy. If you want to go this way, then is fine, but with a plan for moving forward from this stage. Let me give you some advices that will make your life less painful: a) Save at least for 1 year of expenses. So you don´t have the pressure to make money every month. b) Start with a considerable amount of capital. Let´s say 100k. If you make 50% a year, then is a good amount of money.

[B]2) Trade with your own funds and also start a forex school or give forex lessons (paid).[/B] This is the reason you see many forex gurus or forex online courses. Because some professional traders want to have also a fixed income, well is not totally fixed because it depends of how many students you get, but is less variable than income for trading. People often say that if you can´t win, then you can teach, and that gurus are a scam. NO THEY ARE NOT. At least not all of them, and certainly not because of that reason. Let me tell you that this guru thing happens not only in trading, I have seen it in other speculative activities, like online poker. So the reason for teaching is this: Having less variable income, and adding more fixed income. If you ever are going to pay for a course or attend a seminar (a paid one) make your research and make sure that the trader speaking has a good record.
[B]
3) Trade your own funds and manage other people money.[/B] Here is where you can reach heaven. This is by far, the most rewarding activity if you are patience enough. Once you manage a considerable amount of money, then be prepared for the big bucks. This is the category I am, so I will be more specific about it:

After trading with my own money I decided to expand myself and started a little forex fund. Usually there are two types of commissions that you win in a fund: management fee and performance fee. The management fee usually is 2% per year and you get paid regardless if you make or lose money, so it is a fixed salary. And performance fee is 20% of winnings. If you run a little fund with 10million dollars and you make 20% a year, then you get paid more than 200,000 dollars on management fee and 400,000 in performance fee. Not bad.

To make 20% is a really achievable goal, and the risk will be very low too. You can expect a drawdown of 5-7%. Quite opposite that if you are a retail trader with a small account, you need to increase your exposure in order to make more money. If big hedge funds make 20% a year is because they take very little risk. Usually they have like 50 positions with less than 2% risked in global. The less thing you wanna do is show your investors a drawdown of more than 10%.

One of the keys to succeed is to let the fund grow. That is why your investor profile must be a guy that wants to invest for the long term, like a 50 year old man that wants to make a little fund for his retirement, so his not going to take out money every month. He is going to leave it there for at least 10 years, allowing the fund to grow. If you give an investor 30% of returns per year, he will trust you their children for the weekend.

All this aspects of managing people funds are aligned perfectly with what professional traders at investement banks and at big hedge funds do. They have a regular salary based on management fees and a big bonus at the end of the year if they make money. And also, most of the winnings are reinvested so that allows the fund to grow. Retail traders do the opposite: They constantly withdraw money because they need to live, so they don´t allow it to grow. They over expose themselves because their small account, and when a big downswing hits them…its over.

The difficult part when starting a fund is to raise money. You need to have a record of being profitable. But you can start with family, friends and then move to new investors as your fund grows. Is a difficult path, I am not going to lie you, but if you are patience then the reward will come. By the way, once you are managing a considerable amount of money, split the fund into 3 brokers.

Right now I spend 20% of my time trading, 60% of my time looking for new investors, and 20% developing new trading strategies so I can have a back up plan. I have removed almost 100% the psychological aspect of making money every day, so I can focus on improving my strategy, study the market and increase the size of the fund. I´ve had difficult times, but since I have more than 1 strategy I can reevaluate things and recover. This will assure you to survive in the long term.

So I laugh when I read here people complaining because they can´t make money after 2 years trying, and that forex is a scam. They don´t even understand that making consistent money is only the beginning of a long journey. Is only the tip of the iceberg.

I really wish to newbies good luck in this journey, is a long and difficult one, but if you put all your effort you can make money and have a very comfortable life. And to answer the question: Can you make money from Forex?[B] YES YOU CAN.[/B]

Cheers,

That sums it up nicely. Well done!

[eddieb]

Very good article

[tonyro44]

This is the most truthful article i have read in a long time , well done by gasanvill.

That sums it up nicely. Well done!

[Cledid]

Great. forex is very hard to do. You should learn the forex and this article can help a lot to make good impression in Forex trading.

[Toekan]

[B]Hey guys,
[/B]
I wanted to make a post about the journey to making money on Forex and trading for a living.
[B] YES YOU CAN.[/B]

Cheers,

Good for you Gasanvill! Nice post! It is good to see something positive here…

[forexcrisp]

It is a great post indeed, I fully agree with the mentoring thing as its considered a side income besides trading.

[John085]

@thread starter, you may be right but it is not a must for every successful trader (successful trading on his account) may lead to a huge fund which he can manage. There are very less chances of getting huge funds by every successful trader.

[Emielio]

Great post! I’m currently in the position of making the decision whether becoming a fulltime trader or stick with my current job (freelance IT). I’ve been trading Forex for 7 years, with a lot of ups and downs…

Do you have a family to support? What was their reaction on you becoming a fulltime trader?

[bearish]

So far still comfortable to treat forex as part time for me, because forex trading is risky business, which we may losing money in forex trading transaction, I think as long as we comfortable to manage our business, forex also can treat only as part time, but this is about option, each trader they have own choice whether will treat forex as full time and trading for living or only as side business

[gasanvill]

Great post! I’m currently in the position of making the decision whether becoming a fulltime trader or stick with my current job (freelance IT). I’ve been trading Forex for 7 years, with a lot of ups and downs…

Do you have a family to support? What was their reaction on you becoming a fulltime trader?

Hello Emilio,
Thanks for your comments.

If you want to become a full time trader, then you should definitely take a look at the two suggestions I made in my first post, for people that want to quit their jobs and trade their own funds (1year of expenses and a big capital).

Another thing you want to consider is to have a back up plan in case things go wrong. In my case I have 3 strategies, A, B and C, all of them profitable. Strategy A is better than the other two so it is my main strategy, and I have the other ones in case something happens. So what is the plan? For example there has been a couple of years where I started trading but had a long downswing (bigger than my historical downswing) indicating that some conditions in the market are not favorable for my mainly strategy. So I have to switch to my alternative B strategy, and I was able to recover and made some money at the end of the year. And there has been years where I made money trading only my main strategy. The important thing to remember is that making consistant money is not the only thing; you can not follow your strategy blindly and think that it will work forever. You have to be always analyzing, improving it and developing new strategies that help you when the bad times comes. That is the key to survive in the long term.

My family was skeptical at the beginning, which is totally understood because this is speculation so there is not guarantee of a regular salary, at least not at the beginning. But when you have good results, and people see that you are successful, then all the worries disappear. It takes time for family to get used to. In my case, I am married (not children yet) and I can tell you that the first years are the hardest one. Then it gets easy.

Good luck with your decision and plan every little detail.

Cheers,

[Jonathan_Makins]

Yeah, it’s open for all but that doesn’t mean, anyone can make money here! Reality is, only knowledgeable Forex traders are able to enjoy their live trading sessions! But obviously, anyone can be a successful Forex trader! Obviously, all of new Forex traders start their learning session from zero level! In addition, Professional traders get enough financial freedom here!

[bearish]

Yeah, it’s open for all but that doesn’t mean, anyone can make money here! Reality is, only knowledgeable Forex traders are able to enjoy their live trading sessions! But obviously, anyone can be a successful Forex trader! Obviously, all of new Forex traders start their learning session from zero level! In addition, Professional traders get enough financial freedom here!

Yes forex opened for everyone, all new trader they can learn forex, and I think now already easy to access forex and learn through internet, with reading from babypips on school section also as new trader can understand about forex, and with practice I think as newbie also obtained experience and start from experience they can learn more about trading fx

[_bob]

Yes forex opened for everyone, all new trader they can learn forex, and I think now already easy to access forex and learn through internet, with reading from babypips on school section also as new trader can understand about forex, and with practice I think as newbie also obtained experience and start from experience they can learn more about trading fx

Yes bearish, ice can be melted and re-used as water. Yet another pointless post saying nothing brought to you by the good people @ bearish and Co!

[lexys]

Yes bearish, ice can be melted and re-used as water. Yet another pointless post saying nothing brought to you by the good people @ bearish and Co!

Admittedly, the post to which he replied was just as fatuous - these two guys deserve each other: they should “get a room”, perhaps, where they can each inflate their post-count to their hearts’ content, without troubling the rest of us by filling the forum with meaningless nonsense.

[imbest]

Yes forex opened for everyone, all new trader they can learn forex, and I think now already easy to access forex and learn through internet, with reading from babypips on school section also as new trader can understand about forex, and with practice I think as newbie also obtained experience and start from experience they can learn more about trading fx

It is easy to get access on all tools of forex trading . Even learning knowledge and rules are given on all sites that are created for knowledge purpose. It is up to a trader’s interest and passion , how he learn forex . He has to work hard to get earning form forex trading. Babypips is an excellent forum to know all about forex. I am one of those who started from here.

[_bob]

Hey Lexy

It is easy to get access on all tools of forex trading . Even learning knowledge and rules are given on all sites that are created for knowledge purpose. It is up to a trader’s interest and passion , how he learn forex . He has to work hard to get earning form forex trading. Babypips is an excellent forum to know all about forex. I am one of those who started from here.

Looks like we got the triple play from the three wise men.

[bearish]

It is easy to get access on all tools of forex trading . Even learning knowledge and rules are given on all sites that are created for knowledge purpose. It is up to a trader’s interest and passion , how he learn forex . He has to work hard to get earning form forex trading. Babypips is an excellent forum to know all about forex. I am one of those who started from here.

Yes with gather together in forum forex community, might we also getting motivation because we are not alone here, and I think every us want to become success trader that able making trading for living and to achieved these goal hence we learn and keep learning