How Much Money Do I Need to Make a Living From Trading Forex?

Filed under: Learn Forex Trading |

 

For today’s forex-related article, I would like to address the question of how much money you need to succes

sfully make a living from trading forex. This is obviously not an easy question to answer, and there is no hard and fast rule; but I can shed a little light on the subject.

 

If you had a large bank of, say, 100,000 GBP to trade with, then of course with the right trading methodology and money management skills, you could quite conceivably make, say, 20% gains per year, and thus make a nice little salary of 20,000 GBP.However, if you just jump right in with your 100,000 GBP without any trade experience, then you could just as easily lose the lot!

 

I would suggest that, regardless of how much money you have available to trade with, you should begin with a demo account using virtual funds. Trade with this first and try to be profitable over three months or more (if your trading methodology means you only take a few trades per month, then you should probably do a longer test). Make sure you make at least one hundred trades before moving on to a live account so that you know that your trading methodology is sound.

 

When you move on to a live account, fund it with 2000 GBP or so, whatever you can afford – but not too much. Continue your trading methodology as before and try to be profitable for a few months. If you are not successful, go back to the drawing board and review your methodology. If you are making consistent profits, then you can trade with a larger trading bank and start to make some real money. If you don’t have any more funds to trade with, then just keep it small and slowly build up your bank until it is big enough to start taking a salary out of it. It could take years if you start with a small trading bank – but the principle is always the same whether you have 100,000 GBP or 2000 GBP in your trading bank – you have to make consistent profits. If you can’t do that on a demo account, then I suggest that you leave your money where it is.

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