Trading Forex: What Should You Be Aiming For?

Filed under: Learn Forex Trading |

Picture 2One of the most fundamental errors that beginners to forex trading make is that of overreaching. Do not try to give up your day job in your first three months of trading! This is a recipe for disaster, and will most likely result in blowing up your trading bank due to overreaching.

 

My own personal aim is to be able to make a 6% rise on my bank per month. I have yet to achieve this aim, but I believe that it is attainable and this is what I am striving towards. Why 6% you might ask? It might not sound like much, but if you can get a 6% rise on your bank per month, then after one year, you will have more than doubled your bank! This is the power of compounding.

 

In order to make a 6% rise on your bank per month, then realistically, you need to risk at least 1% of your bank per trade (and possibly up to 2%). Now, in order to give up your day job, you will need, in my opinion, at least a three-year track record of being consistently profitable. If you can start with a bank of say $10,000 and double this every year for three years, then after three years you will have $80,000! This is a good amount of money to give up your day job and trade with. You could take $30,000 of this as a base two-year salary, and continue to trade with the other $50,000. This would be a great position to get yourself in to, but to begin with, you have to work on that 6% per month. Try to do this on a demo account first for at least 6 months, and if you are successful, then think about moving to phase two of the plan and using real funds. But do not give up your day job! Make a long term plan – and try to stick to it. This is (what I believe to be) the road to success.

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