Forex truth is that it is possible to make happen trading forex for a living. How much money you need to have as a beginner in Forex trading is a good question.
There are certain problems traders make all the time which prevents them to become full time trader.
I will answer to you on the Forex trading question how much money you need to start trading Forex for a living but I will tell you a little bit more about trading for a living.
You will see what you need to do before going full time trading in order to succeed.
It is not easy but it is hard. Learning how to trade takes time and patience.
Do not think that only to open trading station and open new trade is the only thing that matters in trading.
The market is a pool of many traders, with less experience and those who are master in trading. You need to find your place among them and start making money for a living.
Trading as a side job is easier than trading for a living because you have less stress. You are not forced to make money to cover your life expenses.
Trading Forex for a living requires constant flow of money into your account. You need to pay the bills because the bills will not wait for the right moment when you will have money.
The stress that forces you to make money leads to uncontrolled trading which usually leads to losing money by trading.
- 1 Define Your Goals for Trading Forex for a Living
- 2 Calculate Your Monthly Expenses
- 3 Build Your Career Towards Trading Forex for a Living
- 4 Not Having Enough Money is Why Most Traders Cannot Make Trading Forex for a Living
- 5 Don’t Quit Your Day Job
- 6 Conclusion
- 7 FREE WORKSHOP
Define Your Goals for Trading Forex for a Living
The goal defined will make the road with necessary steps you need to take. Those steps will be smaller goals you need to fulfill in order to accomplish the main goal.
Smaller steps are easier to follow and they will help you to stay motivated. When you are motivated you can move forward and not making beginner trading mistakes.
If you set to high step that is hard to reach you could lose motivation and start making beginner mistakes.
When you have the main goal divided into smaller steps you can start trading Forex for a living.
To start defining your goals set your goal as a yearly goal to reach certain percent by trading.
That can be 20% of your initial capital, and 20% is pretty decent amount. I am not talking 20% for living costs but beyond that.
I mean you need to make for living costs which you spent each month and 20% additionally which will grow your account.
Smaller goals can be monthly where you cover your monthly expenses and making 1-2% of your initial account balance.
Calculate Your Monthly Expenses
This topic is the first one you should cover when calculating the amount of money you need for trading Forex for a living.
Monthly costs for:
- loan payments
- recreational expenses
- incidental expenses
After you set the amount of money you need then you can continue with setting your goals.
If you think a little about this topic you will see that living costs are not the same if you live in US where life costs are much higher than in countries with smaller living costs.
The monthly expenses are higher in US than in Croatia, for example. Croatia have $800 average monthly salary and living costs are around $600.
In the US, average monthly living costs are around 1,200 which is double than in Croatia. Thus, the trader in US need to make more money each month by trading.
If you like to party or enjoy traveling, your living costs will increase and you will need to make more money by trading.
You need to think about the costs because you want to make money for current living costs and maybe for something more that you do not have right now.
Many trader wants to travel when they start Forex trading for a living. Traveling costs are additional cost to their current living monthly expenses and they need to include it in monthly goals.
Build Your Career Towards Trading Forex for a Living
Building wealth is a long term commitment and you should not hunt for get rich quick idea.
Your wealth growth should be consistent over time. You should be consistent in trading and follow your trading strategy.
Using to big risk in your trading just to satisfy your need for ideal lifestyle should not be in your trading strategy.
You need to build your knowledge and experience by trading and trading. Learning from your mistakes you have made during trading is one of the best steps to improve trading results.
Also keep learning about the markets and start building trading strategy where you will invest money all the time and increase your trading capital. Also, your gains will compound your trading balance which will give you more money on each trade you make.
Reading more and more and testing more and more you will increase your knowledge.
Through time you will see and understand how the market works. You will see all what you have learned in a different way.
The way that will help you understand in which direction you should go and which strategy will work the best.
You will find out where do you make mistakes and how to prevent them. Self evaluation will be on of the key steps toward success.
If you want to start trading Forex for a living you need to start somewhere. The best is to start small and make your way forward toward the success.
By starting small I mean invest small amount of money and trade. See how do you trade, are there positive results and how do you behave when you are profitable and when you lose money.
At the start you do not need to make a lot of money but small steps will show you will you be profitable or not. If you make $10 per week or a month you can say that you are profitable. Even that amount is not to much it is plus and not minus, and that is what it counts.
To build palace you need one stone next to another. You do not build the whole palace with one stone.
Your trading account balance is the same. It grows through time and with many profitable trades.
Not Having Enough Money is Why Most Traders Cannot Make Trading Forex for a Living
To make money you need to have money.
Having small amount of money, like $100 or $500 or even $10,000, is not enough. Small amount of money is usually why traders fail.
You cannot be under capitalized and hope to make huge sum of money. That is not the way how trading works.
You can try to make that happen but mostly traders lose that money. The reason is in over trading and over sizing which causes loss of money.
Read more: Why Forex Traders Fail? The Root Cause?
If you take $50,000 as average yearly income which is needed to cover all life costs you can calculate how much you need to make with trading.
If you start with $10,000 you need to make 500% return each year. And that is large amount of money.
And that is not all what you need to do. You need to be consistent each month to cover your costs.
To put all this in normal frame you need to calculate how much you would need to start trading for a living.
With $100,000 you would need 50% each year to get $50,000 to cover your costs.
You Can Approach in Two Ways
One way is to reduce your living costs by sharing living costs with someone. Is that you friend, room mate, wife or husband, parents, it does not matter. You could reduce the costs by half and start trading for a living with small amount of money.
Second way is to increase your starting capital to $500,000 where $50,000 is 10%. 10% is doable and possible. It is percentage that average trader look to make each year.
Read more: How Much Does the Average Forex Trader Make
To make this calculation on another yearly return instead $50,000 you can take 10% of any amount you have as a yearly cost.
If you have $20,000 as a yearly cost you would need $200,000 for trading for a living.
Save Extra Money for Trading Forex for a Living
It is not easy to save $500,000 just for trading where you do not have 100% assurance of making money.
You need to save extra money just in case something happens. If you lose all what you invest you need to have something on the side to cover your costs.
If you have daily job you should put some extra money on a side and build that amount to certain amount. Maybe you can cut some expenses and put that amount aside or you can find part time job over the internet.
The amount you save as a side income should be calculated in a way where it will sustain your yearly living costs.
The usual amount you should have saved is yearly costs so if something happens to your income source you will have enough to live for the next year. Throughout the year you will eventually find another source of income.
It can happen that with trading you lose everything you have invested. You need to protect yourself and invest only what you can afford to lose.
Don’t Quit Your Day Job
Even you have in your mind to quit your daily job, do not do it until you are completely ready for it. That means you have covered all the steps I have explained in this post.
If you quit your daily job without clear defined goals you will eventually lose your money because the only thing in your mind will be to make money and get rich.
If you do not have enough money on your trading account you will lose your money because over trading and over sizing will destroy your account.
Not having enough savings for the whole year can lead you to being frustrated when losing strike comes in a way in trading because you need to make money to cover your expenses.
Daily job gives you some security until you cover all above steps and feel free of stress. Trading requires that you trade without emotions, following your trading strategy step by step and not moving from it.
Even you lose some money by trading your regular income from daily job will make you secure and you will not fear even you lose some trades.
State of your mind is important in Forex trading and being calm you will control your emotions. The results will come and your trading account will grow.
It is tempting to start trading Forex for a living because of possible returns and benefits.
You need to make a plan with specific goals that are defined and which will help you to reach your final goal. And that is Forex trading for a living.
Do not think it will be easy but it is realistic. Many have succeeded and they live from Forex trading.
You are the only one who is standing in a way becoming full time Forex trader.
For beginners who does not know how and where to start with trading
In the workshop I will tell you
what steps to do in order
to transform yourself into a trader