can you make 5-10% per week on your capital trading forex?
Practically, it’s a little more complicated. Trying to get those types of returns in 1 week will expose you to a lot of risk, to be sure, but it’s still possible.
Lets explore what a 5% – 10% per week really means, shall we?
We’ll go with 10% for the purposes of this illustration. If you were to make a 10% ROI each week from your forex trading, that means you’ll make a 40% ROI per month. Furthermore, that equates to a 480% ROI over the entire year.
So, what you’re really trying to do is multiply your account 5X essentially, within the space of one year.
Is it possible? Again, yes… But, how much risk are you willing to take on? You could run through a string of trades and win each one, thus effectively realizing huge gains in your account. But then again, you could have a few winners and then a few losers thereafter. The losing trades, will of course, create draw downs in your trading account, the likes of which could severely slow down your progress (if you’re trading with this much of a risk factor).
In reality, most traders who try to be too ambitious with their trading end up “blowing up” their accounts instead of fattening them up.
A better approach is to either:
- Choose to target a more realistic return (like 10%, 15% or even 40% in one year), or
- Work backwards and then captilize your account accordingly.
In the latter case, what I essentially mean by this is to decide how much money you want to make. For instance, lets say you want to turn a $20,000 account into $100,000 this year. In this case, what you really want is to realize $80,000 profit.
But, will it work?
To make $80,000 over the span of the year, you’ll have to clear roughly $6,700 per month in profits (after all your pluses and minuses are accounted for). That equates to $335 over 20 trading days.
Now, here’s where it gets a little tricky… $335 represents roughly 1.7% of $20,000 (which is what your trading account will be starting at). So, if you were to loose your first trade, and your stop loss was at the 1.7% mark, you’d loose 1.7% of your account just on the first trade! Keep in mind that many skilled traders aim to keep their losses within 1% and usually not more than 1.5%, so this would be considered risky.
That said, if you were to win a few trades as you start out, your account balance will increase and if your daily profit target still remains at $335, you’ll see that risk percentage decrease. Now, you can resolve to keep your daily profit taking at $335 (a good idea, to minimize your risk), or you could keep on increasing your daily target to match the 1.5% mark, lets say, so that you make the $80,000 sooner than within 12 months, as originally planned (but then, you’ll of course, assume a lot more risk).
So, the choice is yours… Do you see how it’s possible, but still somewhat risky?
Well, at the end of the day, this is what forex trading is all about! Take from this what you may… And, like all other aspects of forex trading, you have to make that decision for yourself, based on the information you receive.
Best of luck!
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