Millionaire forex trader

Beginner Questions
1

Theres a thread which asks the question if trading forex is like gambling. In the thread, an important subject was brought up.

The question was, are there any forex traders that have made millions in this market? In all the “other” markets (equities, futures, bond, etc.) you can easily find instances where individuals have amassed fortunes. Some have done it with a small initial account balance.

Considering the leverage available in the forex markets, you would think that there would be many individuals who have been able to amass such fortunes.

The question I have, is that true? Do you know someone, or read of someone, that has made a fortune in the forex market?

If not, why is that the case?

Thank you in advance for your reply.

2

There is a great book called Millionaire Traders by Kathy Lien and Boris Schlossberg which is about exactly that. It covers all types of markets but the majority of the traders that were interviewed for the book made their fortunes in the Forex Market. It’s definitely worth reading!

3

:smiley: its precisely because of the leverage that smart traders are able to take money from dumb traders.

Just because someone is able to make significant returns trading forex does not mean that you can, so why do care if others are successful ?

4

A lot of traders make a big mistake of focusing on what others are doing, rather than on what they themselves are doing, as soon as I started focusing on what I was doing, things started to come together.

Not to be confused with looking at what others are doing and using they’re systems and learning from others etc, it’s more of focusing on what your objectives and targets are.

5

George Soros Vs. The British Pound
The British pound shadowed the German mark leading up to the 1990s even though the two countries were very different economically.
Germany was the stronger country but Britain wanted to keep the value of the pound above 2.7 marks.
Attempts to do this left Britain with high interest rates and high inflation, but it demanded a fixed rate of 2.7 marks to a pound as a condition of entering the European Exchange Rate Mechanism.
Many speculators, George Soros chief among them, wondered how long fixed exchange rates could fight market forces, and they began to take up short positions against the pound.
Soros borrowed heavily to bet more on a drop in the pound.
Britain raised its interest rates to double digits to try to attract investors. The government was hoping to alleviate the selling pressure by creating more buying pressure.
Paying out interest costs money, however, and the British government realized that it would lose billions trying to artificially prop up the pound.
It withdrew from the ERM and the value of the pound plummeted against the mark.
Soros made at least $1 billion off this one trade.

6

One of the traders mentioned in this book is Ashkan Bolour. I’ve actually had the privilege of meeting him in person at a Candle Stick Trading Seminar in Los Angeles. The guy is incredible, from start up trader to millionaire in 5 years.

The point is, there are many successful, profitable forex traders. If you continue to work at it, you could be there one day. For this reason, Forex is not gambling.

7

There are some traders at forex factory who are doing very well. One guy (Jacko is the name I think) trades $2k/pip and is a millionaire.

8

A $2k lot size ($200 a pip) would make you $1m a year at 20 pips a day averaged out. :smiley:

9

When I started out I thought it was gambling but over time I kept studying (I was addicted to forex) and now I’m profitable although I don’t have much capitol so I’m slowly building up my account size through compounding.

Actually come July I’ll be done with college and I’m taking a year off to prepare for grad school. During this time I’m going to try and be a full time trader with my income solely from forex. I’m not a millionaire but I have savings and we’ll see where it takes me.

10

Would you continue trading if you found out that NO ONE is succesful at it?

11

Thank you for all your replies.

Being a noobie, it gets frustrating when your not at the point of being able to be consistently profitable. It’s reassuring to know that it is possible to make a fortune in this market, because it has been done by others. It’s a motivational boost when you want to throw in the towel.

I’m not really looking at others performance, nor am I looking for a holy grail. I personally think the only way I will be successful in this business is if I, on my own figure out a way to be consistently profitable.

Time will tell.

12

Aim for independence first, i.e. packing in being a salary slave, then if you can do that - it will come.

13

Thats an interesting question, but the short answer is YES, although I suspect I would be in the minority.

14

I don’t understand why so many are concerned with the amount others are making. We all know you can make money if your trade properly. So if there was never a Forex Millonaire then be the first. Money isn’t everything its just paper.

15

I’m just not fully comprehending the forex market. I guess thats why I asked if people actually make a lot of money in this market.

In the equity/futures/bond markets, there is a centralized exchange. There are market makers whose duty is to maintain liquidity in the market. In effect, if you enter in a trade your guranteed to have a regulated institution take the other side.

The forex market, does not have a centralized exchange. I use a broker that states they get quotes directly from banks and stream them onto their platform. They also state that they are not a dealing desk.

If I decide to put on a trade and it gets filled almost immediately, who is on the other side? What effect does my buying have on the actual market?

Hypothetically, say I decide to buy $10,000,000 of the EUR/USD pair. Will my purchase through my retail broker have any effect on the movement of the pair. Let’s just assume that 10,000,000 is an amount that would normally move the pair.

Usually in a trade, there is a winner and a loser. There is always two sides. Who provides the instant liquidity in the retail forex markets?

Theoretically, my concern is that brokers can stream whatever quotes they so choose, and in doing so, if a trader takes a big position, the broker can move the pair against their trade, causing that trader a loss.

I’m not saying this happens, but if there are traders that are making millions in the retail forex market, than my concerns would not be valid.

I’d like to state that I have a lack of knowledge, so if my post is ridiculous I apologize to all the experienced forex traders.

16

Lol…are you serious? Surely its not everything but I’m sure its the reason we trade.

17

anyone who thinks money is just paper is more then welcome to deposit some of their excess paper in my paypal account

18

Not sure if you trust Wikipedia but : Foreign exchange market - Wikipedia

19

I’d just like to point out that the FX market is decentralized in the sense that many banks make up the interbank level. Instead of a single exchange, you have multiple exchanges (aka banks) that deal with each other. Volume flows between these banks freely. This is kind of the reason why the FX market is so gargantuan. You have federal, international, and investment banks doing business at the top, all adding liquidity to the market.

Individual brokers are kind of the “retail” sector of the market. They accrue a certain amount of volume from their individual investors and, in turn, use this to negotiate better spreads from the interbank level.