Lets break this down and see how we could theoretically achieve a 6 figure income out of the forex:

• $100,000 = $8,300/mo (approx)
• $999,999 = $83,300/mo (approx)

So, in order to make six figures, you need to make $8,300 per month on the low end of this scale and $83,300 per month on the higher end of this scale. This is very possible with the forex market, but a lot depends on:

1. How much capital you have, and
2. Your level of skill & experience

If you’re well capitalized, you should be able to make your daily trades without assuming too much risk so that you can reach your goals.

I’ve written extensively about managing risk, being well capitalized, etc in other posts on this website. Here are two that should help you determine how much money you’ll need to trade with, based on your risk profile and how much you want to make (that is, between the range of $8,300 and $83,300 per month).

How much money should I start trading currencies with?

FX Trading In Action – An example of making money in forex trading

Read through these articles to learn and understand more about how to plan your trades and determine how much capital you’ll need to trade safely.

Best of luck!

Answer:
Theoretically, yes.

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:

1. Choose to target a more realistic return (like 10%, 15% or even 40% in one year), or
2. 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!

Answer:
The short answer to this question is: yes!

Once you become accustomed to putting on trades, you will develop the habit of setting up your trades so that you do not have to be present to execute them. Typically, this is achieved with the entry order, a limit order and a stop loss specification. After analyzing the markets, you will have developed a certain idea as to where it will be going (up or down) and as such, you’ll be able to place such orders and then literally, walk away from your trading station and charts and carry on with other activities in the day.

If the market moves in your favor, your order will automatically be activated and hopefully, if there’s a profit triggered should the market hit your limit order, you will see your account increase by your targeted profit-taking amount without you even being present!

This is the power of what the forex market can offer in the way of trading part time. Once you’re skilled enough, you’ll be able to trade this market without too much of a commitment of time on your part.

Generally speaking, the bulk of your time will be spent analyzing charts to make decisions about where the market’s going so that you can place orders.

Now, there is one caveat here: if you plan on being a day trader, getting in and out of trades on the lower time-frame charts, then you’ll most likely be glued to your seat and computer screen for hours on end, each day. Because those charts are so erratic and move far too quickly, you will not be able to take the time to plan a trade in the same fashion as you would if you were trading an hour chart or longer. That said, some traders enjoy the chaos of the smaller time frames and that’s perfectly fine. If you’re that kind of trader, you will enjoy getting in and out of trades within minutes or even seconds, just to scalp for a pip here and a pip there along the way. I’ve tried this, and it worked (I was able to capture a lot of pips), but it was extremely stressful and so I do not prefer to trade this way!

Overall, if you intend to plan your trades out and then execute them via “future orders,” then you’ll really be able to experience just how “part time” this market can really be.

Answer:
That’s a good question. For most investors, the forex market represents an opportunity to create a side income. In fact, if done correctly, forex investing can match and exceed your current income. At the $300 – $500 per day mark, you could realize an income of $6,000 – $10,000 per month. That is, over 20 trading days in any given month, you can realize this sort of potential.

But, the big question on everybody’s mind is: how?

It is true that the forex market does have plenty to offer, but for all the rewards available, there are plenty of risks as well. That said, you can create a daily income of $300 per day if that is what you want out of this market, but you must be aware of sound principles of forex investing if you hope to make your dream a reality. In particular, you need to understand:

1. the rules of being well-capitalized
2. how risk:reward ratios will affect your outcome
3. the difference between standard, mini and micro accounts
4. how to place stop losses and limits
5. how to control your emotions
6. how to read charts (the technical aspects) and be aware of market conditions (the fundamental aspects)

We’ve written a useful article on this topic, How To Trade Currency and make $5,000 per month part time, which discusses how to make $250 per day. In the end, whether you want to make $250, $300 or $500 – the principles and distinctions are the same.

Good luck with your investing!

Sound familiar?

We all know that FX Investing is risky – that’s not a secret. But, most people struggle to make money in this market because they fail to seek out a good education. Now, if a trader jumps into this market without the necessary skills required to sustain himself much less succeed, can the market be truly to blame?

I think not.

If an untrained surgeon tries to perform surgery on you (and, subsequently puts your life in danger), would you conclude that surgery is dangerous, so much so, that it would never be an option? I think not. Dealing with the poorly trained surgeon would be the unthinkable option, not surgery in and of itself.

The same logic applies to many other areas of life… For instance, cars are not dangerous. It’s the people who drive them that creates all the nuisance (I’m thinking of drunk drivers, people trying to drive and send blackberry text messages at the same time, sleepy drivers, etc).

If you truly want to make it big in fx investing, the first area of improvement you should target is your mindset. So, here is the BIG secret you’ve been waiting for:

The number one trick to succeeding in this market (like the pros) is to adjust your mindset.

Now, what does this actually mean? Well, if you are able to successfully adjust your mindset, you will have no problems exhibiting the following qualities:

• Emotional control
• Realistic expectations
• Discipline

Emotional Control
Being able to put a lid on useless emotional eruptions (good or bad) as your trades progress is vital to succeeding in this market. At first, your emotions will render you giddy one day and completely deflated the next – all forex traders go through this phase. You will be tested in ways that you cannot even imagine. Prior to trading with actual money, I used to hear this advice all the time. And, foolishly, I never thought it would apply to me. I know better now! Believe me, emotional chaos will wreak havoc on you – this applies to everybody. You will fall down as a result, scrape your knees and get hurt. That’s a given. What is in your control, however, is how you choose to react to the inevitable mess. The true test lies in whether you get up and trade again, despite the fact that your idealistic trading world will be extinguished. That’s the real determining factor between succeeding and failing in this market. If you’re the sort of trader I hope you are, you will eventually get back up and ride the horse again. And if you do, you will serve yourself very well to keep your emotions in check, whether you win or loose trades or both!

Realistic Expectations
I’ve talked about how this market can produce unbelievable returns (double, even triple digit returns). That said, if you are making a 100% this year, you must be the sort of trader who exhibits all the qualities of a winning FX Trader, in particular the three qualities I am discussing here. Hence, the case of realistic expectations. Lets work backwards, however, so you can understand more about just how important your expectations are. If you had $10,000 in your account, would you be considered wise or foolish if you expected to be able to double this amount in one month using a mini account?

Well, lets find out shall we? Read my analysis in the link below and then come back to this article…

View Analysis Here (scroll down to the blockquote in blue italics)

… Welcome back!

If you grasp what I’m talking about in the analysis above, you will quickly see why successful traders only make up 10% of all traders in this market. Most traders get into trades like these without considering exactly what they are doing. With enough time and experience, you’ll understand the numbers of fx investing so well, that you won’t have to do such and in-depth analysis for all your trades. In the beginning, however, you really ought to be doing this for yourself. Case in point: force yourself to have realistic expectations.

Discipline
The final characteristic that I believe is worth mentioning is discipline. You will be tempted to get into all sorts of trades (in particular, the sort of trades like I discussed in the analysis above). If you fail to analyze your trades before getting into them and also lack the discipline to stay out altogether if the trade is not sensible, you will be sure to fall into the major group of traders (I.e.: the 90% who struggle). And, if you’re not emotional at first, you will soon realize how quickly than can change – be sure of that!

On the flip side of this is the sort of trader who controls his emotions and respects his trading capital far too much to ever enter any trade without analyzing it first. For a trader like this, discipline not only means trading according to a pre-determined schedule, but it also means trading with rules, being able to trump emotions, etc. In being disciplined, you will preserve your trading capital long enough to stay in the game and ultimately, really have a chance of growing it. You’ll want to have your capital handy when you start to become skilled at trading… The greatest tragedy is the learn this market while loosing all your money and then arriving at the finish line with plenty of skill (that could make you money) and no capital to use that skill set with! This is the reason why learning on a paper account is so key.

If you ever stray away from your resolve to be the sort of ‘tough nut’ I propose you should be in this article, pull up this post again re-read these words to set yourself straight once again. This market is very slippery, and it is tricky not just for beginning traders, but all traders alike. It does get easier with time, but we all make mistakes (even the veterans who make a lot of money in the fx forex market). If you stick to what I propose in this article, however, your odds for success will really tip in your favour and in end, you want to improve your odds as much as possible!

ANSWER:
That’s a great question. Many beginning traders who attempt to make big money currency trading fall into the trap of ‘unrealistic expectations’ and I will take this opportunity to show you what I mean.

The currency trading market has received a lot of attention over the years due to all the wonderful benefits it has to offer, including accessibility and trading volume in particular. You have no doubt read about (or heard of) people who are making five, even six figures every month in this market.

Well, lets look at what it really means to make 5 figures in the fx forex market. $500 per day equates to $10,000 per month (as there are 20 trading days in a calendar month). So, essentially, what you are really asking is how to double your money, at least as far as the first month goes.

Lets analyze this further and see if it will work…

ANALYSIS
Lets assume you decide to do 1 trade per day (so, 20 trades for the month) in order to reach your goal of $500 per day. In addition, with $10,000 of starting capital, you are better off starting with a mini account (versus a standard account). Now, in a mini account each mini lot yields $1 per pip captured (on average). This fluctuates, of course, based on the currency pairs but we will assume it is $1 for this analysis. Now, at $1/pip captured, you will have to capture 500 pips per day.

Ask yourself: is this realistic?

Unfortunately, it is not. And, if you attempt to do this, you will be taking on far too much risk to warrant doing it in the first place. So, that leaves you with another alternative: increase the number of mini lots traded each day in order to increase your net gain per pip captured. You will then cut down on the number of pips you’ll need to capture on a daily basis.

Here are some possibilities:

• 2 mini lots – 250 pips needed
• 5 mini lots – 100 pips needed
• 7 mini lots – 70 pips needed (approx)
• 10 mini lots – 50 pips needed

In looking at these estimates above, 50 – 70 pips/day looks like a better target. In another words, I believe it’s possible to capture 50-70 pips/day in this market, realistically speaking, as opposed to 500 pip per day.

Now, I’m not saying that it is not possible to get 100 pips/day or even 500 (especially on days when there’s a fundamental announcement). In addition, scalpers jump in and out of this market constantly, grabbing 1, 2 even 5-10 pips at a time and they do this all day long… Their daily pip capture adds up, for sure. But still, when you look at the highs and lows of a typical day in the major markets, you will see that while the markets do tend to have quite a spread, it still pays to be conservative. And remember, there will be days when you look for trades and you simply won’t find any opportunities. Foolish traders forget this, which is ultimately very dangerous because they end up seeing what they want to see, all due to the fact that they have a daily goal to service (like making 500 pips/day). Do you see where I’m going with this? Realistic expectations help you trade better, which preserves your capital in the long run. Needless to say, preserving capital equates to being able to make profits down the road because it keeps you in the game longer. Trust me on this!

Getting back to the analysis…

So, lets say we’re confident we can find 70 pips/day trading the Euro and the Pound. That’s 7 mini lots we would be trading, which means:

$7 profit/pip captured if the market favours us

… OR …

$7 loss/pip if the market turns against us.

Fine. Now, we have to look at risk. If you’re working at a ratio of 1:1.5 (aiming to make $1.50 for every $1.00 risked), then you would be risking about $330/trade (or, 47 pips). $500 approximately is about 1.5x the amount of $330 (I‘m using round figures here instead of actual numbers for simplicity). In risking 47 pips (I.e.: in creating stop losses that are 47 pips wide, I would feel comfortable because that‘s enough room for the market to move within before I would get prematurely stopped out – so that looks good). The next point I would need to address is the percentage of risk I’d be taking on to make a trade like this. That is, if I ended up loosing $330 on this trade (as opposed to making $500), what % of my trading capital would be lost (or, drawn down)? As it turns out, a $330 represents a 3.3% loss of capital and this is not good. At this rate, my entire account would be drained in only 30 trades! That’s a bad sign and a red flag that should immediately put a STOP to any trades from occurring.

Lets get back to the original question now…

You want to make $500 per day out of your $10,000 capital, but in doing so, you would be taking on far too much risk. You would either need to:

1. Increase your capital, or
2. Aim to make less each day

Just in case you’re wondering, a $330 loss represents 2.2% of $15,000 and about 1.7% of $20,000. In another words, you would need at least $20,000 in your account to justify the sort of trading you’re intending to do (in my humble, conservative opinion that I developed from blowing up my own account when I first started). And, just to ruffle your feathers a little more… 1.7% is still too high for my liking. I would not go past 1%, which represents a starting account of at least $33,000.

Yes, you read it correctly: you need a nice little chunk of cash to really make some decent money in the currency trading market.

Do the math with $250/day in profits or even $350 and see how your risk levels fare. If it falls within the 1% – 2% mark (depending on your own risk tolerance), then you’ll have a better plan (assuming you are willing to make $350/day or even $250/day as opposed to $500 – for now)… I’d say that’s not a bad place to start!

Despite all of this, the currency market is not a trading opportunity you want to turn your back on.

Ironic as it may sound, the market that has left a sour taste in the palettes of many traders still holds great promise. After all, for every defeated investor who populates the failing group, there is a small group of investors who fit squarely into the successful group. It stands to reason: if 10% of forex traders are succeeding beyond the wildest dreams of most investors, there must be a secret to their success. And indeed, there is.

If you currently find yourself in the failing group, consider this…

Your failures should not warrant that you to walk away from this market, but rather, they should leave you questioning how the elite 10% of forex traders find their success, and more importantly, how you can duplicate that success. As with anything in life – and the currency market is no exception – perseverance in the face of adversity trumps everything else.

The currency market is, indeed, a challenge… But, for better or for worse, it is still very lucrative. And for that reason alone, you cannot afford to look away.

Quite frankly, the forex market offers traders a very good proposition in exchange for the risk it demands in return. But, don‘t take my word for it… The following are three very good reasons to support my argument:

(1) An excellent ROI
Some traders aim to make a 20% return on their money each year. Others aim higher – they look to get 100%, 200% or perhaps even 300% returns for the year. And, just the same: others go for 10%. Whatever the goal, this market lets you decide how much profit you want to realize.

Now, you can argue that it‘s not easy as I‘m making it seem; that getting double, even triple digit returns for the year is hard work! Well, it is… I won‘t deny it. But, that is no reason to look past this market. The key with the forex market is to develop the skill of being able to capture the same amount of pips (or better) every month, whether it be 10 pips or 100.

That means, after all the additions and subtractions to your account throughout the month, if you can net the same amount of pips on a consistent basis, you will soon find yourself in that group of elite traders. With a consistent amount of pips captured each month, a whole new world of incredible returns can open up for you. You want to see a 100% return each and every year on your money – well guess what, it’s not only possible, people are doing it in this market everyday!

Can your local bank do the same (or, other investment classes for that matter)? Should you still diversify your investments? Of course! But, as soon as you understand what this market can truly offer you, the question of giving it up will never enter your mind. Instead, you will ask different (better) questions, like: how can I improve my trading psychology to win, or, what trading strategies can I implement to succeed and reach my goals, etc. See the difference?

(2) Equity growth
Returns and equity growth go hand in hand but I’m mentioning it separately to emphasize the point that the forex market is truly a money-making market (and, not the loosing proposition that you might be tempted to believe)! It is true that some traders are doubling their money in this market each every year, year-in and year-out… Can you imagine just how much capital they are building up by doing this? And, if that capital remains untouched for the most part (aside from a small draw of income), the compounding effects of growth can be quite extraordinary. See my post for an example of forex currency trading in action and see the power of compounding first hand (scroll down, halfway through the post). In this article, I demonstrate how $10,000 becomes over $10 Million in only 10 years!

By sticking around and mastering the market in the face of adversity, such individuals are enjoying a handsome payday. Wouldn’t you like to be on that end of the spectrum?

(3) Lifestyle Freedom
There are three aspects of lifestyle freedom that you can obtain by succeeding in the forex market:

1. Time freedom
2. Work freedom, and
3. Geographical freedom.

By setting up specific trading systems and strategies, you can limit the amount of time you spend trading and still make the same amount of money each month. In addition, if you are making all the money you need, you won’t need to continue working (unless you want to). And finally, all you need to trade is a laptop and an internet connection. You can be anywhere in the world, so long as you have a reliable laptop and connection to the Internet. Can you imagine the possibilities of what such a lifestyle could offer you? Your problems will start changing from what to do for tonight’s dinner to which bistro to have dinner at, while you’re frolicking around in the south of France (or, any other destination of your choosing… you fill in the blank(s)! See my article on the currency trading lifestyle.

To be sure, this market offers plenty of potential to those who take the time and develop a thick skin to master it. If you’re committed to this market – and overcome the necessary hurdles – your risks will start to fall and at the same time, your rewards will steadily increase.

You wake up early everyday (around 7:30/8:00 am) and enjoy a beautiful breakfast on your patio that overlooks the ocean. You take in the warm, breezy air and soak up every ounce of your relaxing lifestyle. Around 8:30, you head on over to your computer where you’ve installed your foreign currency charting software and you take a look at the forex market for the day’s potential trades. After about 20 minutes of sizing up the market, you see three potential trading opportunities. Two are not quite ready to go as yet and one is presenting itself such that you can plan out and execute a trade right away, but your entry would most likely occur later on in the day. Since you live on the east coast and are dealing with Eastern Standard Time, you can trade at 8:30 am every day and participate in the US session. By 10:00am, you have entered all three trades and now it’s just a matter of waiting to see how they play out. By this point in your trading career, you are confident in creating, executing and sticking with a trading plan so you have no need to sit in front of your computer, waiting for your trades to complete.

So, you head on out and enjoy the rest of your morning. Since you went for nice swim yesterday, you decide that today you will go for a run on the beach with your dog. You arrive back to your place an hour later and find that one of your trades completed. Unfortunately, you find that you incurred a loss but you are not upset because you are comfortable with the fact that it just goes with the territory of trading. Shrugging off the outcome, you hop into the shower and think about what you’ll do for the rest of the day… Perhaps catch a matinee? Spend time with your spouse/partner if they are not working? See some friends? As soon as you jump out of the shower, you find that your two other trades have now completed. Another one has incurred a loss, however one worked out as plan and captured plenty of pips for you. Overall, you are looking at a net gain for the day and it’s not even noon yet. Today, your net gain totals $460 and on average, you are netting about $500/day (or, $10,000/month). You are very happy, indeed…

Could you live this lifestyle?

Many people dream about being a successful currency trader. If you can see yourself living the sort of lifestyle described above, it is very realistic and possible to achieve that goal. That said, there are certain factors that play into becoming a successful foreign currency trader.

These are the five key areas that you need to excel in if you want to be a successful currency trader:

Get a good Forex Education
Take the time to learn about the forex market and how to trade it. There is plenty of quality forex trading education available, more so than ever before. Take the time to learn what works so that you can short-circuit your learning curve and accelerate towards successful trading.

Practice with a Demo Account
Forex Education will take you so far. You will need to practice, loose money (yes, you read correctly) and make plenty of mistakes before you can become comfortable in this market. Unfortunately, this is how you learn to trade the foreign currency exchange market – by falling and getting right back up.

Control your Emotions
How would you feel if you have incurred a string of losses (about $350 each) and your current trade is loosing yet again? If you are a skilled trader, you wouldn’t be phased at all. Most traders, on the other hand, freak out and feel the need to take action and put an end to the trade before it gets worse. They accept the developing loss out of fear, in the hopes to minimize the loss but in doing so, they miss out on huge opportunities. Skilled, well-practiced and especially emotionally-controlled traders are the few who succeed by doing the opposite; they let their trades complete as planned, which accounts for some of their loosing trades turning into big winners. Sometimes, a trade can look like it’s doomed to fail but until it hit’s the proposed stop loss, there is always the possibility of that trade succeeding. To close out the trade early (instead of letting your trade plan pan out) guarantees a loss and this is where so many traders loose big time. In addition to practicing such mental and emotional fortitude, skilled forex traders understand that the majority of trades can be lost and they can still make money in forex trading. As such, if a loss does indeed occur it does not upset them.

Be Disciplined
This skill goes in hand with emotional control. You must be prepared to create very strict trading rules and abide by them. You will be surprised just how many forex traders lie to themselves about discipline. When confronted, they claim to practice it. When in front of their trading stations, it is quite another story. Suddenly, stop losses are abandoned, accounts are overleveraged with high-stake trades, etc. There is a reason why only 10% of forex traders make money in the foreign currency exchange market and that is simply because these traders have the discipline follow all of their own rules.

Trading with enough Capital
You need a fair amount of money in the market to make a decent amount of profits. While it is true that one should pay attention to returns on investments and not actual dollars and cents, more often than not, traders want to create an income with their currency trading, which equates to profits that are $200, $500 or even as much as $1,000 per day. This is possible in the forex market. Unfortunately, what people fail to realize is that forex brokers indicate you can get started with as little as $300. But, this small amount of money will not get you the daily profits indicated above. Even if you had $5,000 in your account, you’d be hard pressed to see $500 or $1,000 per day unless you could capture an obscene amount of pips every day and limit the amount of lots/mini lots/micro lots you use. Well, unless there is a fundamental announcement, you are not going to see currency pairs move that much in one day! A good amount of capital to start with is $30,000 if you’re hoping to make $250 – $500 per day. If you have anything less this, aim to simply grow your account without actually trying to generate and income out of it. That means, if you were looking to get a 10% ROI each month on your account and it was $5,000 to begin with, you would then be aiming for only $500 for the entire month, which is very easy to do.

As you know, I am somewhat of a conversative currency trader myself so I’m a little weary of such things like robots and so forth. That said, I still promote FAB turbo here for the following reasons:

• It will place trades 24 hours per day (without any intervention needed from me)
• It runs off their Virtual Private Serve (meaning, you can turn off my computer and it will still work)
• It claims to have had a 95.9% winning/success rate over the last 9 years along with drawdowns of only 0.35%
• It seems of offer tight risk prevention settings
• A trading systems eliminates ‘the person’ and therefore emotions!
• Beginning as well as experienced traders can all jump in

Curious yourself? Try this system on a demo and/or micro account and see what it can do for you.

See live forex trades or request a copy.

In the case of starting small (with only $300)…

It is true that you can open a Forex Trading Account with a broker with as little as $300. But, as a general rule, you should plan to loose no more than 1 – 2% of your account balance in any given trade. 2% of a $300 account is $6. When you equate your looses to figures (rather than percentages), you can then easily see what sort of account you will be able to safely trade with (and thus, how much money your likely to make).

With a mini account, each pip is worth $1 (on average). What that means for you (with a $6 maximum allowable loss per trade) is that you would only be able to use stop losses at a maximum of 6 pips. Needless to say, this is not a good idea at all because you will be guaranteed to loose money in that a 6-pip stop loss provides very little (if any) wiggle room to account for market movements and you will be stopped out of your trade very quickly.

On a micro account, on the other hand, $6 losses allow for stop losses that are 60 pips in size, which is great because you can get away with as little as 30 pips for a stop loss and still come out ahead. In this case, a 30-pip stop loss will produce a $3 loss and only a 1% overall loss of trading capital. Doesn’t that look better?

Since the market is in constant motion, testing different price levels as it zig-zags around, you want to be able to stay out of it’s way. Stop losses that are 30 – 60 pips wide will provide all the wiggle room you need in order to stay out of the way of typical market movement, hence preventing you from being stopped out prematurely. In this way, you can win more trades, rather than loose them by getting stopped out too soon.

Therefore, if you have very little to start with as indicated above, stick to trading a miro account and look past dollars and cents in order to see the sort of returns that are possibles (see: FX Trading In Action – An example of making money in forex trading).

In the case of starting with a small bundle like $3,500…

If you apply the same formula that I’ve mentioned above (2% maximum loss per trade), you will see that 2% equates to a maximum allowable loss of $70 on any given trade. Since we have determined that 60-pip stop losses are more than enough, you could trade this much capital on a mini account. But before you do, you should consider one more factor and that is drawdowns (the depletion of your trading capital due to losses). What if you incur a string of losses before you see some profits? You will then have eroded away your capital, which could make a 60-pip stop loss (or, $60) equate to more than 2%. Due to this, it turns out that $3,500 is really almost just an ‘entry’ price that is needed to start a mini account. You are better off having about $5,000 in a mini account in order to be able to trade properly. By the same token, a 60-pip loss on a standard account would equate to $600. If that were to represent a 2% loss of the account balance, there should be at least $30,000 in that account (and, hopefully a lot more for the same reason as above) in order to justify and write-off such a loss. Do you see this?

To answer the question in general, you will be hard pressed to make $100 – $500 per day with only a couple hundred in your trading account (ie: in a micro account). You are more than likely going to require a highly funded mini account and/or a standard account with the minimums I’ve indicated above if you plan to protect and retain your capital long enough to get to the point where you make your daily income target.

My advice: become a pro at capturing pips by practicing on a demo and/or micro account. While you do that, save up as much trading capital as you possibly can.

In reality, if you only had $300 to start with, you would be looking to make $6 – $10/day at the 2% max loss formula. This is not a lot of money, but that is ok because you have to look at the numbers more closely. On a micro account (trading 1 micro lot), $6 profits equates to 60 pips captured. If you can capture 60 pips per day consistently without issue, you will be able to make a lot of money with a standard account. Even if you can only make 20 pips a day – consistently – there is a gold mine ahead of you! Case in point: once you master Forex Trading (even at the micro level), you can scale up later and reap huge profits.