So, you want to become a Forex trader? Many people are attracted to Forex due to the persona and hype around making money, working when you want and doing something that is exciting and lucrative. The reality can be very different from what most expect though... As a full-time Forex trader, let me give you an insight into the life of a real Forex trader...
Not all is what it may seem
Forex trading is exciting... Or is it?
Most people will have a mix of excitement and nervousness when they first start trading. This emotional concoction will have adrenaline pumping through your veins, but this is nothing when compared to the rush of winning big or significantly increasing your account size. Unfortunately, winning big is not something that happens often for most traders. To be honest, most traders experience the initial adrenaline rush when they first start trading Forex but they soon have these positive feelings replaced by frustration, disappointment and discouragement...
The fact is, most traders fail. Forex trading is not exciting if you are on the losing team! Losing money over and over again is not fun and is damn-right frustrating. For some, they will lose life savings - how soul-destroying and irresponsible!
So, what can you do to keep Forex trading enjoyable and exciting?...
1. Never trade with more than you are willing to lose. Any cash in a trading account should be cash you are willing to let go - have the mindset that it is already lost and that you will not be getting it back.
2. Keep trading as a hobby until it is obvious that you have talent or acquired enough skill to take trading more seriously.
3. Educate yourself about risk and money management, strict risk management will keep trading steady and fun rather than emotionally devastating.
I will let you in on a little secret... Once you are a profitable trader, Forex no longer becomes about excitement. I have been trading for several years now, I wouldn't say that my daily life as a trader is exciting. Don't get me wrong though, I still have a rush when I make a fantastic trade or see a new strategy working but most of the time trading can be a bit tedious. With time, Forex trading becomes more about discipline and consistency rather than something that is emotionally rewarding. If you are having a daily emotional roller coaster, then you are likely doing something wrong.
Forex trading makes you rich... Or does it?
Forex traders are rich! They drive Lamborghini's and trade while sun-bathing in the Caribbean... If only this were true, my daily life would be a lot of fun!
Trading has made me wealthier than I ever imagined I would be but it does not provide a lavish life full of riches (especially when you have 4 kids, a wife and live near London!). Trading will make you rich but it is not a get rich quick scheme. Trading takes time and patience. You can see from my verified trading results that I gain anywhere from 20-100% per year on each of my accounts, depending on the trading strategy. Being profitable for a year will not change your net worth much but being profitable for 5 years plus may have a significant impact. Below is an example of someone starting with a small trading account and making a half-decent return each year. This could be someone that is working or a student, someone that is trading part-time as a money making hobby.
Starting Capital $5,000
Year 1, 43% return = $7,150
Year 2, 29% return = $9,224
Year 3, 63% return = $15,034
Year 4, 91% return = $28,716
Year 5, 32% return = $37,904
Year 6, 87% return = $70,881
Year 7, 49% return = $105,613
Year 8, 14% return = $120,399
Year 9, 77% return = $213,106
Year 10, 71% return = $364,412
The above is not meant to discourage you but to give you a better perspective and a more realistic expectation. If you really wanted to push the boat out and trade like my verified combined account - trading a number of strategies from a single account and increasing risk - you could see something like the following...
Starting Capital $5,000
Year 1, 143% return = $12,150
Year 2, 129% return = $27,824
Year 3, 163% return = $73,176
Year 4, 191% return = $212,942
Year 5, 132% return = $494,024
Year 6, 187% return = $1,417,850
Year 7, 149% return = $3,530,447
Year 8, 114% return = $7,555,157
Year 9, 177% return = $20,927,785
Year 10, 171% return = $56,714,298!
In short, Forex can provide financial freedom but we are talking about years rather than days, weeks or months... I should know, I have been trading for over 7 years now!
You can see my verified trading performance and returns on myfxbook - click here!
Forex trading allows you to be your own boss... Or does it?
Yes it does. I get to work from home, I am pretty flexible with my day and I work in my pyjamas. However, I rely on the market. There are certain hours I have to trade and there are certain times I cannot leave my desk. I also have to keep trading in order to make money. Trading whilst on the beach or having total freedom with time is not realistic, I need my desk and computer setup to trade. I can manage some trades from my phone while on the go but that is it, I need to be in the office for analysis and entry. Taking days off can result in missing profitable trades, sometimes the best trades of the month!
Saying all this, I don't have to work much and love what I do. I have not taken a sick day in the last 7 years, that should tell you how much I love this job. As a Forex trader you will have it far better than most but you may not have as much freedom as you may have thought.
So, what's it like being a full-time trader?
My daily routine differs from most traders as I also run a Forex trading room, work as a technical analyst for a FX broker and have my website and other business projects that I work on. Perhaps my routine will provide some insight into the daily life of a Forex trader though...
0500 - Wake-up and commute to the office i.e open 2 doors and sit at my desk
0515-0600 - Check any open positions, emails and news
0600-0700 - Prepare my charts for the day and update my trading room
0700-0800 - Provide analysis for TriumphFX
0800-0900 - Shower, breakfast, take the kids to school
0900-1200 - love-the-pips, emails, other projects
1200-1300 - lunch
1300-1500 - love-the-pips, emails, other projects
Every hour I check my charts for about 10 minutes. I open positions, manage current positions and close positions down. I do this every hour on the hour from 0600 to 1800.
If I solely traded, I probably would work an hour preparing for the day and then 10 minutes every hour as above. I would likely only have to work about an accumulation of 2-3 hours a day. My other commitments keep me busy the whole day though.
The sky's the limit! It's all about how profitable your strategy is, how much capital you have and how much you are willing to risk per trade. You can earn a lot of money but you generally need a lot of money to make a lot of money - trading is a game for the rich to get richer.
I get a "pay rise" each year (not many jobs offer that) - as my personal accounts grow, I am earning more and more.
How much you want to earn is really down to you. The key is to start small and increase your account and risk with time and experience. Once you can make a consistent return with a $100 account, increase this to $500, then $1,000, and so on...
A good trader can be earning around $100,000+ within 5 years of good performance, depending on commitment, starting capital, and risk.
Forex trading is very satisfying but can also be frustrating and discouraging. Ending the month with a profit is a great feeling but it will not leave you ecstatic as you will have to risk that money again the following month! I don't mean to be negative, I am rarely negative. I am just trying to be honest.
Being able to withdraw a large sum of profits once a year is fantastic.
Pride - there is a great sense of personal pride and self-achievement when you are in the 10% that can actually make money from trading.
Loneliness - trading can be lonely at times. It's not just the working by yourself, it's also that not many people understand or are interested in what you do for a living. Trading forums and social sites can help with this.
Keep active - sitting at a desk most of the day is not fun. Going for a run will not just make you feel better about yourself, it will also clear you mind after a losing streak and give you a healthier mindset.
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