can you make a living off forex trading? that’s a question I have been asked many times by beginner forex traders. Here’s my answer;
Have you tried any other business before? If yes, then have you been making a living out of it?
If No, why do you want to try forex trading? Oh, you want to have multiple streams of income.
That is good? If you succeeded in your other businesses. you can bring that mentality into the forex trading business.
Just so you know, you may learn a lot more in 1 day while trading your money than you have learned in 5 years in your previous business.
That is the ugly truth.
Oh, I have not forgotten you: if you have not succeeded in any business or even tried any business. You can make a living in forex. Just remember that it’s a risky game and you could lose all your money.
Notice how I did not say you can lose all your funds while talking about people above who have tried other kinds of businesses before.
Do you know why? They already know, and they have experience doing business.
Businesses are all about losing and winning. Risk and reward.
Making your wins count is key.
Can You Make a Living out of Forex Trading?
YES,? you can. That is the simple answer. I feel like saying YES and just stopping.
But the simple YES answer is more than that. Let me explain:
It is not as straightforward to make consistent profits. 90% of forex traders lose money, and this is a conservative estimate.
As they say: “The best way to end up with $2000 in forex is to start with $4000”.
Also: don’t expect to be able to earn a meaningful income with only a couple of $100 or $500. You’ll need a decent starting balance to be able to have those kinds of profits that will make consistent income with no rush or silly risks.
To get a monthly income of $2000, you should be trading with anything between $40k and $80k. Of course, this depends on your trading strategy.
- 5% monthly on $40k is $2k
- 5% monthly on $80k is $4k
Now assume you make 10% or even 20% some months.
Because not all months will be the same but at least every month with at least 5% ROI should give you a living from trading with very low risks.
That’s why it’s technically wrong to expect a steady income from forex trading. each month’s results will be different. the target should be consistent profits.
Related: 18 Classified Forex Trading Tips –
Now imagine trading with just 500usd or 1000usd, can that make you a living using the calculation above? I doubt it.
What Can You Buy With 5usd in Your Country?
Do you have 2 kids? Will 100usd make you a living monthly? will it cover your bills?
What about the school fee and tuition for your children? What about your energy bills?
You see it is not possible with just 100usd or 1000usd capital.
Except you want to trade and that will make you a gambler.
How much does George Soro make yearly?
20% is okay for him I think because he’s a billionaire. can you imagine how much capital he is trading?
Therefore, capital is the most important thing combined with your strategy if you are serious about making a living trading forex.
The reality is that the forex market is for large sophisticated investment vehicles like banks. Anyone that tells you that you can make a living by trading the forex market with less than 2000usd is simply not telling the real truth.
Maybe if they compound the profit they make for years or trade aggressively, who knows they could make a living someday but not today!!
Trading forex is a business and should be treated like one, not a game where you put money to see what happens; if you have the gambler mindset you will be losing money and putting other people’s funds at risk, don’t treat forex like the casino.
With forex trading, you need a huge credit which I will call leverage.
The problem is most people looking to make an income from Forex are underfunded. They have a small starting capital.
The Forex Market is not consistent and there will be days that are better than others. So, it will be very hard to get a steady income.
To make matters worse, to make up for the small starting capital, a lot of traders will employ risky money management strategies that can get them into trouble very quickly.
Just remember you will make a living trading forex but it won’t just be because you are the best trader in the world.
It will happen because the conditions are favourable, the right starting capital, the right trading strategy, and the right trading mentality.
In conclusion, making a living from forex trading is possible, but it requires a lot of hard work, patience, and discipline.
The forex market is not for everyone, and traders must understand the risks involved before investing their hard-earned money. Success in forex trading depends on having a solid strategy, sufficient capital, and a trader’s mindset.
While it is technically possible to make a steady income from forex trading, traders must understand that the market is unpredictable, and every month’s results will be different. In short, forex trading is a business that requires careful planning, discipline, and a long-term approach.