If you go to a popular forex forums, you’ll see questions like this: ”
- Anyone Trading Forex For A Living?
- does anyone make a living trading forex?
- does anyone make a living day trading forex?
- does anyone make a living trading currencies for a living?
- can you make a living trading forex?
- how much money do forex traders make in a day?
The problem with these types of questions is that you’ll never get straight answers.
Someone may say they trade forex for a living but have you really looked into their live forex trading accounts and verified what they say about that?
You just cannot take things at “face value” and believe them.
Just to give you a few examples, here’s one I saw at babypips:
Is Anyone Making A Good Living Off Full Time Forex Trading?
I just want to hear that it can be done. All I seem to see posted online(and i’ve checked quit a few forums) is people trading with micro accounts hoping to hit it big, or just mere speculation of making a living if such and such profit from a demo account can be repeated with a real money account.
Is there anyone out there who is actually making a good living trading FOREX Full time?
My definition of a good living is making a income by trading FOREX of at least as much as what the average professional makes after working years in their career. In the United States that would be 75k–100k a year.
I imagine it would take at least 100k a year to be a Full time Day Trader and be able to make a decent salary, assuming 10% a month is reasonable and sustainable over long periods of time
And here’s another one I say at forexfactory:
How many trade Forex, fulltime, for a living?
... without a second income?The reason why I asked this is because Igrok told me the following:
“Like I said, I don’t really know anyone else making living almost entirely by trading FX for 15 years straight without being a part of some sort of brokerage firm of a bank. If you do really know someone else of this sort then, please, just let me know who the person is. All the experienced traders that I personally know from around the world usually do have some additional source of income besides making actual profits on the market whether it’s an IB fee, various commissions or any other sort of income not directly related to their trading performance.”
And you get answers like these:
I have been trading forex for five years now full time, currently I make $100,000 a month so I don’t need any additional income
How many traders trade forex full time without second income?
Answer: Probably about 1 %
Because 95 per cent are losers and 5 per cent are winners (Out of the 5 per cent winners I guess 4 per cent have second income)
The problem with this type of question is survivorship bias. You won’t be hearing from the thousands (millions?) who attempted full-time trading and lost everything. You’re only going to hear from those who are long-term successful (<5%), or short-term successful and haven’t yet joined the former or latter group (though statistics tells us which group they’re more likely to ultimately join..).
Only hearing from the successful ones paints the false picture that trading full-time is a worthwhile endeavor for most (when it clearly is not). Forums aren’t the only place that paint this picture, it’s all media: hundreds of trading books, thousands of trading websites, TV shows, etc. There’s a LOT of money to be made in selling the dream.. That’s why so many intermediate traders end up going that route (or at least partaking in it), Igrok, the PFX guys, it’s easy money.
I trade full-time, no secondary income. A word of advice to anyone attempting this – there’s a significant opportunity cost in choosing not to work full-time and advance one’s career. Make sure your profit goals account for such an opportunity cost.
Should You Trade Forex For A Living?
I really don’t know what type of situation you are in at the moment:
- your trading skills,
- your finances
- your goals
And I really have no right to tell you what to do with your choices in life especially what to do with your money but here are some facts that must be considered before you take that plunge.
# 1: Forex Trading Statistics Success Statistics Are SCARY!
If you’ve been reading or learning about forex trading, you’ll see statements like 95% of forex traders fail.
Now, that statistics does not stop new traders from wanting to enter the forex market. And they have their reason for doing that.
Some may read stories about a millionaire forex trader and decided to trade forex or some may read somewhere about how easy it is to trade forex and make money and how the forex market is 24 hr market blah blah blah and they want to try their hand in the forex market.
But I believe those nasty statistics because I’m also included in that. I may be very smart in some things in trading like price action trading and best price action trading setups but I fail in execution of doing the right things and that’s why I’m still in my day job grinding it daily.
What if you fail?
What do you do next when your most of you money is gone, exhausted?
You need to think about this.
#2: Forex Trading Is Not The Only Way To Make Money
At the end of the day, everybody wants adequate amount of money to sustain their lives. And money does come from many different avenues.
Look at your skills and experience and think, is there any other way where you can make money or not?
Maybe if you are really successful in that other area then you put some of “your risk money” into forex trading but you have your other business to support your regardless of what happens in forex trading.
When you start to trade forex for a living in the beginning, you are going to have to put up with having no regular paychecks.
You may have losing weeks and months, and this can stress you out and impact your trading performance when you don’t have income coming in from forex trading.
If you are one that don’t like losing money, then simply forget forex trading.
#3: Do You Have Sufficient Cash?
There are two types of cash you need:
- cash to live on
- cash to trade
Cash to live on meets your daily living expenses whilst cash to trade is the amount of money you have to deposit into your forex trading account to trade forex (so you can make money money).
Here’s the important thing: both of them have to be sufficient/adequate.
For my case, If I had $150,000 cash to live on and a $25,000 to find my forex trading account, I’d quit my job.
That $150,000 can last me at least 6 years someone in an Asian country where the cost of living is cheap and I can live like a king for $500-$1000 per month.
At least have sufficient cash to live on whilst you do trading. This eases the stress if you are not making money in the first few months of forex trading.
You need to be in a good frame of mind without money worries to impact on your trading performance.
And you need to have sufficient trading capital to start with.
I don’t think you should really start thinking about trading forex for a living when you only have a $5,000 trading account.
That’s too small in my opinion. Anything around $25,000 starting capital and above would be good.
#4: Are You Willing To Sacrifice Your Career To Trade Forex For A Living?
You may be young, just finished university and got a job and are making good money now but you want to quit and trade forex full time?
Think about this for a second:
- Are you really sure you want to quit your attractive job and trade forex full time?
- The forex market will always be there.
You only have one life and you can only do some things in life only once. The forex market as long as the earth keeps spinning around the sun, will most likely still be there even when you are 55 years old.
#5: Are You Willing To Do The Hard Yards?
Trading full time is not glamorous.
Making money is but not the act of trading and preparation, the study and the hours you have to sit and wait .
And most likely, you will do it alone for a very long time. Your wife or girlfriend can’t help you. Your friends will go to their day jobs but you will be alone for the day.
If you are social kind of guys, this may impact you. If you are not, you’d be ok, I guess.
Advantages of Trading Forex For A Living
The advantages of doing your own thing when you trade forex for a living:
- no alarm clock to wake you up,
- no commute in the mornings, no rush hour traffic,
- not arrogant bosses to contend
- don’t have to deal with work mates that gossip like girls.
These are the benefits of being a successful forex trade and trading for a living.
How Will You Get There?
Here’s what I think that will get you there.
- proper trading mindset/psychology
- proper risk management
- adequate trading account funds.
- a reliable forex trading strategy.
Can you do it?
I believe you can but believe me, it may not be that easy.
If it was, many of use will not be in our day jobs right now.
We’d be living the dream!