The reality of making money in trading Forex

Trading Discussion
1

Alright, I haven�t put much time and effort into this whole thing at all yet. But before I go any further I need to understand if this is a worthy venture.

After talking to my father about trading Forex and asking whether I should get into it, he told me this� (ill admit that he is an engineer and has never been any sort of risk taker at all)

�remember when your step son wanted to be a professional basketball player? You told him that the odds of becoming a professional sports star were 1000�s to 1, very slim, and that his efforts should be placed somewhere with a greater possibility of return. Well this is just like that!�

Now I am all for �living the dream� and believing in ones self. But I�m also a realist. I don�t live in the clouds, I know there are no get rich quick schemes and that there are some things that even though they may be attainable, have a margin for unatainability, and therefore are a great risk.

This venture into pipland will require much TIME, EFFORT, AND MONEY! I have a family of 6 and I owe it to them to not invest in anything that is not a fairly sure thing.

So here goes it.

I come to the table with�

I�m 30 years old.
I graduated high school and 1 sem college.
When I tried I got great grades in school and A�s & B�s in college.
I definitely have a fairly high IQ. (developed, not born with)
I am very good at problem solving skills.
I own a business which is up on the rise. BUNDLE UP AND SAVE WITH PURPLE RAIN SC INC
I have great computer skills.
I am very non emotional when making decisions.
I�m willing to study for 2-3 years before investing a dime.

So this is what I have. Like I said, I am willing to study and play demo account for quite awhile but again, this requires hours and hours in front of the computer and away from my family and business.

SO I ASK: What are the true odds of becoming successful in Forex Trading? I know I have heard that 10% make money. This would be crazy good odds. It leaves much room for the get rich quick folk, the lazy folk, and the slow folk. This seems the same odds as making it in business. 90% of businesses FAIL!

So how many do you believe actually make at least $40,000/year? 1%, .5%, .1%? I cant believe that any more than 1 out of a hundred are doing this well. Im thinking more like 1 out of a thousand.

Also I haven�t found any sources documented for the statement �10% make money with Forex.� Please post a link if you have one.

Thanks all for your time. Again, I just don�t want to steal time and money from my family on a venture that even if I give it my all day in and out, is very very very likely to fail?

Sincerely,

Mike Lewthwaite aka PipVentures

2

If you want to succeed there will have to shift your mind. You seem like a pretty busy fella already and the likely hood you could succeed with your busy lifestyle in 2-3 years may be unlikely. I know a lot of people that are doing well and have a busy life, but they have time dedicated to forex. What time do you have dedicated to forex? One of my good buddies is finally hitting some success in forex, but he has been trading for seven years now and his account is almost in the six digits, go him!

Also, don’t think in terms of dollars. Think in terms of ROI! What ROI are you going for? It wouldn’t be a difficult task to get a decent annual ROI. Lets say 25%, pretty good eh? I for one think that would be quite easy to achieve. So to answer your question, you would need 160,000 to make 40,000 a year. If you are succeeding in forex you’ll be making way more than 40g. That is of course you are shooting for 25% annual return. Which I think in a few years on a limited time table could be quite possible!

I for one am going for 1000% ROI every year. However, I don’t have 6 children, a carrier, or many bills to pay. So of course I can dedicated 20-40 hours a week to forex.

If you can afford 10 hours a week, nearly 1 and half hours a day, I am sure you can be a decent trader in a few years. I am also skeptical about those figures about who fails and who makes it. We all lose money and many of us blow our first account(s). It is just part of trading, something you try to over come with time.

3

You’ve already taken the first steps.

My suggestion for your next step is to read babypips.com’s School of Pipsology. Take as long as you need to read through it; 1 month, 3 months, at your own pace. Then you’ll know what Forex is really all about and can make your own decision if you want to proceed any further.

You can also open a demo account somewhere so you have a visual to look at as you read the lessons.

Find a comfortable place here in the forums where you enjoy spending some time every few days catching up on the discussions and learning what others are experiencing.

I bet others have more to add (because I know there is more to add), but I really need to get back to my own reading and research.

Take care!

4

I’m a little different from others. I don’t believe the notion of joining Forex simply to loose your first account. That came from a lack of a plan. What do you plan??? STUDY, STUDY, AND STUDY SOME MORE!!! Once you THINK you have it down, study some more!!! After all, the monies you earn didn’t come to you to be thrown away, right?

As someone stated above, read the “school” at babypips.com. No, won’t be easy, will be a long road, but, whether you loose or win is up to you!

You already know, many have done this before. Why should you be any different? Do your homework, develop a solid style/system of trading (one YOU develop, not someone else’s trading plan), and go for it!

What are the odds on being successful in Forex trading? Well, you’ve stated, you have a successful business now. WHY do you have a successful business? SAME THING APPLIES with your trading. YOU! make the odds, not someone telling you what the odds are.

5

Hi , like yourself Im new to this but I have a lot of time ,24/7 if need be
but from all the reading etc if done it seems to me that as long as you preserve your capital, and avoid like the plague any one who has a magic box of tricks to sell you should bee ok!
I may be wrong but by sticking to the most simple set of indicators that you understand the best , (for me its prices ma,s macd , & rsi ) and be patient ,use alerts on your charts programme to save you forcing any trades and only only only trade when everything says go and then be cautious with the cash you will turn a profit.
Currently Im on a demo and in 8 months I ve netted a 65% profit,
so yes you can do ok but patience is the key at least it is for me .
hope it helps.
ttfn
jrs

6

Thanks for all the posts.

As far as the shift in mind, I am a very optimistic guy. As I said though, I just have to know all the facts before starting this little mini carreer.

It’s funny I just talked to a friend of mine out of state and I mentioned Forex as a way to make money. He said 'Oh my roomate does that, talk to him"

Smalll world, so i talked to him and turns out he lost 1000 real quick from not being carefull. He still believes in forex trading though and is now trading micro lots to get his skills up. He is slowly being able to consistently make a profit.

[U]Heres the thing guys:[/U]

If you told my I could be a succesfull engineer I would say, sure. I would look at others who got their bachelors and got engineering jobs. There are engineer’s all over the place I have several friends who are engineer’s.

BUT… I dont know any successfull daytraders. I have never talked to people and had them say. “Oh yes, our son billy is a successful Forex Trader”, or “my uncle does that and makes a lot of money”, or “oh yeah, my good friend does that and really provides for himself.”

So you see my hesitation. Now this could be the case for 2 reasons.

  1. It could be because individual retail forex trading is relatively new.
  2. It could be because onlly the elite are able make money on Forex and you dont know any friends or relatives who know successful traders for the same reason you dont know any friends or relatives who know professional basketball players. There arent many!

So can you guys tell me what is the reason, or if im missing another answer?

Thanks again,

Mike

7

I’m a novice when it comes to FX, and I don’t want to come off as giving advice to a starter as I’m very much one myself…but I think I understand where you are at psychologically.

All I wanted to say (before I get back to my daily studies), is that Forex, like professional basketball…will always have very few people involved compared to the overall world population.

I know you would like to know some one who is succesful at day trading, but the odds of that happening are enormously slim…I suggest if you do bump into one, ask him/her to show you the ropes and offer to pay…chances are they’ll do it for free (pride and ego). But, for the most part, you will have to be that one person who stands out above all the rest.

I think this pretty much goes for any financially succesful profession.

Forex is new, and you will have to just trust that you will be succesful at it with the assistence of distant help from forums (like babypips) and self-teaching. Like I said, I’m a novice at this, and I havn’t made one real dime…but I can clearly see how advantageous it is to have this invaluable skill for the rest of my life.

I say take the plunge. Go for it. Go through the baby pip school here…And like others said if you like it, you will know (either in time or instinctively)…if you don’t, you will naturally find yourself moving away from it all. Either choice is ok. As long as you gave it a shot to see if this is for you.

You never know. It might be. And you will forever thank yourself for the decision.

8

hi, there are many traders making a good living out of forex, i suspect most are not lurking in online forums but if you want to check out one guy type “Jacko’s Forex House of Pleasure and Pain” into google and have a read of his journal at forex factory. Gives me inspiration anyway :slight_smile:

9

Individual forex trading in its current incarnation - easy online trading available for small retail traders - may be relatively new, but forex trading has been available for quite a while for those with the resources.

Your second point is probably more on target.

There’s also another element in the mix - the paranoia of successful traders. Elite basketball players cannot hide what they do, but elite traders can, and often do.

10

Hi Pipventures.

Firstly, let me say i understand your concerns…It’s reassuring that you have them.

I think you really only have one question to answer…are you prepared to COMMIT to the time needed to learn Forex?

As you own your own business, you can always earn more money, but the time you spend learning Forex away from your family can never be recovered…even if learning the Forex is for their eventual betterment.

Should you decide YES, then put every ounce of free time and effort into learning the way this works…Don’t worry about the invisible Forex millionaires, each person measures their own success in different ways.

Do you have to be a millionaire to call yourself successful, or would an extra 10-20K a year make a palpable difference to your life?..extra holidays, better schools for the kids etc…

I personally think there are PLENTY of Forex successes out there, either too modest or too secretive of their own profitable system to “out” themselves in any forum.

Can you imagine what life for a successful Forex tarder would be like on a forum??? QUESTIONS< QUESTIONS< QUESTIONS…people offering to buy signals, open trading chat rooms…to be honest it would be a nightmare…i certainly wouldnt admit to it.

If you invested 20K, you could earn about $250 a day…from 5 pips…yes 5 pips!!!

Is it worth the effort???..Definitely.

11

Please

Please

Please

PLEASE

Start very small. With a $250 account, or the lowest you can go. Do not think that you will learn anything trading demo. The second you switch from demo to live you will almost certainly start loosing. It is 100% different, no matter what anyone tells you. You will almost certainly loose all of, or most of your first account so make it as small as possible, but not small to the point where you just don’t care. Just be carefull, and take everything people say with a grain of salt. Afterall, most people arn’t succesfull.

12

thank you that was a very positive reply and i have been encouraged by it!

13

I went from demo to live…I saw no difference :wink:

14

It takes hard work, I can’t even tell you how many hours I spent glancing over charts…because I stopped counting. And that’s after 5 years of business, real estate, economics, and finance for my BSc, and another year for my MSc in Real Estate. I probably spend more hours on learning about forex than for my MSc.

Like anything in life it takes effort, discipline, and dedication.

The thing about forex is that there is a TON of wrong information on the web. People who believe they can walk into a library and buy a book about heart surgery and then successfully do such an operation are called CRAZY. Yet somehow there’s this perception that by simply copying a system or reading some forex book you will somehow turn into a millionaire overnight. That’s simply nuts!!

To someone who’s good at it, it might seem easy…but he/she had to put in a lot of effort. 99.99999% aren’t born great traders. Read “Hedge Fund Market Wizards” and you’ll realise that every single one of the “great traders” were massive failures when they started out. I mean, you have guys who did all the usual mistakes when they started out…overleveraging their trades blowing massive sums. Yet the one trait they all have in common is they NEVER GAVE UP. And that goes for pretty much everything in life.

I loved that one story where one of those now-great fund managers started out by getting fired from one trading job over and over and over and over again. When the interviewer (Schwager) asked him if he ever thought about giving up the answer was “no”. THAT’S what will make you successful.

Start slowly, read the Babypips school, open a demo account, try different systems until you find one that works FOR YOU. Then back and forward test it for a few weeks/months on a demo account. Only once it’s proven to be profitable for a few months take it live by starting a small real money account. Trade that for a few weeks/months to get used to the psychological stress…and not matter how calm you are, stress does play an important role. I lead negotiations for multi-million $ sales of upscale hotels and that almost never stresses me out, yet the first time a trade I was really sure of didn’t work out it freaked me out :wink:

Slowly build up that live account and as confidence grows (because of good results…and ONLY then), seed it with some money from your regular business. Don’t dump it on there all at once, add a bit every month and only during months where you’re profitable. Work up your bankroll.

On a side note, don’t buy into signal services or EAs…if you want to be a TRADER you have to fully understand WHY you are taking a trade…otherwise you’re just a (blind) investor who isn’t in control.

Cliff notes: Yes, it’s worth it…but as with everything in life, it takes hard work.

15

Sometimes you don’t have to know how to trade in order to earn pips from trading.

16

An old thread, but not a bad one … I wonder what happened to PipVentures.

Yes, of course … like you can walk into a casino for the first time in your life and place five winning bets in a row.
Chances are though that you’ll leave the place with empty pockets … and a tummy full of complimentary food (which is more than the forex market will grant you). :20:

Cheers,
P.

17

This is a great thread, thanks. Been really careful not risking more than 2% per trade. It’s hard, but worthwhile in results in the long run. Again, thankyou.

18

Hi Mike, I’m Butterflyforex and also newbie in this site but looking into different problems raised in different sites is a great learning to me and to my business. Listening from you is also great and learning, too. I’ve there in that stage of questions and trials on trading especially here at FX but I’m a trader too at different product because I traded gold at Forexmetal where I earned much. Now, what I’m looking for is another additional venture in trading just like currency trading. I think it’s gonna be great trying to trade with it. Now, I’m looking for any forum that has relevance on it.

20

The reality of Forex trading is this: You don’t make money overnight, it takes atleast 1000 hours of screen time. You’re going to blowout your first account.

21

Yep, minimum.

Nah, not necessarily.
There’s quite a number of traders, right on this forum, who’ve never blown an account.

Cheers,
P.