One thing that is certainly true about trading is that it has substantially evolved in the past decades. As this happens, more markets also have become accessible. The Forex market is just among those that have become more accessible to people in the past years. Aside from being accessible, it is also among the most attractive which now results in a lot of people getting interested in trading Forex online.
Such opportunity provided several people with an effective means for them to earn extra money along the way. For some, Forex trading became a hobby for them. For others, it served as a part-time activity they enjoy while also adding to the income they generate. Regardless, the fact remains that money is generated through this opportunity. With that in mind, it won’t be surprising if others wonder if it is also possible to make a living out of this trading activity.
Is it Possible?
Rolf Schlotmannn, a trader and entrepreneur, answered that making a living by Forex trading is possible. However, he also emphasized that only less than one percent of traders are able to make profits through it as based on retail broker and research data. This data is justifiable and still has the likelihood to increase if only the average trader would change the way they approach trading.
To emphasize again, Forex trading is just like any other profession. You need to prepare yourself in all ways to start working in trading and for you to be a profitable trader.
You need to have the motivation which is crucial considering all the setbacks and challenges you are likely to encounter along the way. To know how to trade Forex for a living, you need to start with learning the basics, following the financial markets, analyzing your trading performance, collecting all important data and tracking your trades.
So, if you truly want to know how to make a living by trading in the Forex market, you need to be prepared.
What You Need To Do to Make a Living through Forex Trading?
1. Start with Proper Research
It’s been established doing Forex trading for a living is possible. Still, it must be remembered that every money-making opportunity comes with risks, which is where research will play an important role. Information must be digested if you want to learn how to trade and make a living out of it. For information to be obtained, thorough research must be done. Through research, you will be able to increase your knowledge on foreign exchange, volatility, leverage and the conditions of the countries whose currencies you are trading.
2. Have Goals and Stick to Them
Goals and having one is an important element on how to trade Forex for a living and succeed in it. After equipping yourself with all the knowledge about Forex trading and the market, you will need to make your own goals. These will guide you on what you need to do to be profitable in the long run.
3. Your Trading Capital – How Much Do You Need to Make a Living from it?
To make a living out of trading, you must have enough capital, but what is enough when it comes to trading capital? To start making a living through Forex trading, you must know that it won’t help if you are under-capital. If you want to start making money through trading, you must be willing to have an opening balance of at least $100. Of course, if you wish to know how to make a steady stream of income by trading, you must start with an opening balance that is above this amount.
Although the amount of disposable cash needed to trade full time is different from person to person, one fact remains. A decent amount of cash is necessary for you to start trading, effectively manage your risk on each trade and generate enough money that can support yourself.
4.Understand How the Bankers Trade
Learning the basics along with those mentioned above is not the only things you need to be knowledgeable about regarding how to make consistent money through Forex trading. It is also important for you to have an understanding on how bankers trade and execute as well as make their trading decisions.
Why is it important? That’s because bank traders account to 92% of the entire Forex volumes even if there is only about 5% of them making up the population of Forex traders. Hence, their trading decisions matters significantly on how a trade will come out in the end. If you want to increase your chance for profit, you need to know how they trade so you’ll know the best trade move to perform.
5. Choose Your Trading Broker Well
Choosing your own broker is just like selecting the right service provider. Your broker needs to be chosen carefully for a large aspect of your trading career relies on these experts. As someone wanting to make as much profits in trading for a living, you want to ensure that your investment is in good hands. Picking a fake or unreliable broker by accident or negligence is a sure way to sink your investment.
Your broker must be chosen based on your goals as well. To ensure you are selecting the right broker, getting yourself an expert opinion will certainly help.
6. Start by Registering from the Most Basic Account Type
The type of account you choose is a vital element on how to make a living by trading in Forex market. If you want to become a successful and profitable trader, you must start from a mini or beginner’s account. This will prevent you from losing much by preventing you to invest a large amount. Your risk of loss is still high because of your lack of experience since you are only a beginner. Choosing a mini account instead of others can help control the possibility of losing a significant amount along the way while also preserving your interest.
7. Begin by Depositing Small Sums and Follow through with Organic Gains
Beginner traders are advised to start with small sums when depositing into their account. There is also a rule about opting to use organic gains than choosing to put in greater deposits to add into your investment and use for trading. Organic gains are the returns you generate from trading. Using organic gains substantially help in minimizing your risk of losing while also giving you enough room to enhance your expertise. It is also not advised to trade using greater deposits because it does not guarantee ample returns all the time.
8. Have a Trading Method You can Use for a Long Term and Perfect it
Many people enter the trading market with one goal in mind – to make money fast. These people often chase the best means that can generate that money quickly. Unfortunately, this is not a good mentality to have when entering the Forex market. If you truly want to generate consistent money to support yourself through trading, you need to find the best method to generate money for a long time. One good method you can consider is the Price Action trading method.
Once you have chosen the trading method that works for you and help achieve your goals, you need to master using it. That’s when a demo trading can be useful. Getting a demo account is the key to not just mastering your chosen trading method. It is also the key to learning more about the market, gaining more understanding and making yourself more confident in every trade move you make.
9. Trade on the Daily Charts and on Higher Time Frames
As one expert has said that it is a must to master trading the daily charts if you truly want to know how to make a living as a Forex trader. The daily chart is providing the combination of frequency and accuracy of the price action trading. This means that this chart can give you a more relevant and accurate and clearer view of the price action in a market. The trade-worthy setups that the chart provides every month is already helpful enough for you to make a steady stream of income.
Trading on higher time frames is also a better option than trading on lower time frames. This is because in this option, there are fewer signals that you may encounter along the way. More importantly, making money is easier with trade on higher time frames.
Aside from following those steps above, there are still some few basic things you must keep in mind to guide you towards successfully making consistent money by trading Forex. The most basic of all is the need for a trading plan which will be your blueprint for success. Plus, your trading plan must be combined with the correct mindset to increase your chance to succeed.
It also helps to have a mentor who can help you master the art of Forex trading by your side. Successful traders already have the skills and knowledge you require to learn how to make consistent income by trading. Getting their help will surely help you achieve your trading goals faster.