Hundreds of thousands of people are literally conned into trading Forex every year by unscrupulous Forex brokers and Forex educators, because they’ve been led to believe that making money in Forex is the easiest thing in the world. After all, the Forex market is a perpetual bull market, with juicy trades available for you at all hours of the day, in both long and short directions, right? The reality is, the Forex markets are one of the toughest places to turn a profit, especially for someone who is just getting started in Forex. The only way that you’re going to survive as a beginner Forex trader is to be patient and aim for small, consistent returns while you build up your capital. By the end of this article, you’ll know how to get rich slow by trading Forex.
Why Getting Rich Quick Doesn’t Work In Forex
In Forex, just as in any other form of investing or trading, you need money to make money. The more money that you have to trade, the more money you can earn. If you’re getting started in Forex with just a few thousand dollars, then you won’t be making that much in Forex trading profits at the start, and that’s fine because you can always grow your profits with additional investments and by allowing your profits to compound. You don’t have to make 50-100% returns to get rich in Forex.
Building up a significant Forex trading income takes time and patience, but many people make the mistake of trying to shortcut the process by taking bigger risks. After all, if you can make 5% a month by trading on a 1 contract size, you can make 50% a month by moving up to 10 contracts, right? Unfortunately, this over simplified logic doesn’t work, because it doesn’t take into account the losses that you’ll have along the way. Many people wipe out their account in one or two trades this way, because they don’t have enough money in their account to withstand the losses.
How To Get Rich Slow Trading Forex
Instead of trying to get rich quickly by being too aggressive with your risk, there is a better way. Firstly, you’ll need a profitable Forex trading system or strategy, and if you don’t have one then the best way to get one sooner rather than later is to buy one. There are a few good ones in the market right now, and you’ll be able to differentiate them from the junk/scam type systems easily if you look for the more conservative ones in terms of returns. A typical profitable Forex trading system will deliver 5-10% returns a month consistently, and not promise you overly optimistic returns in a short period of time.
Once you have a profitable Forex trading system, start out by trading with a maximum of half the trading capital you intended to start out with. This serves to get you comfortable with the expected returns of your system so that you don’t pull the plug on your system prematurely later on. Many novice traders make the mistake of risking capital that is beyond their comfort level at the start, and then giving up on that system when the first losing streak comes. Every profitable Forex trading system has a losing streak sometime, but will always make back those losses and get back into profit eventually. Again, patience is the key here.
Once you’re comfortable with the performance of the system, you can begin to make additional deposits into your trading account at regular intervals. This way, your capital base will increase, and so will your Forex trading profits. Additionally, at the start you’ll want to leave your profits in your trading account to compound as well. If your system has an automatic money management calculator, great, just set it to between 2-4% of your trading account balance for the optimum results. Otherwise, you’ll want to manually update your trading size at least once a week to reflect your account balance: this will further increase your profit growth and accelerate your progress to the Forex trading income you desire.