Can You Trade 20 in Forex

Can You Trade Forex For A Living?

By Louis H-P on November 7, 2018


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4
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To trade Forex for a living appeals to many, which begs the question is it possible? The short answer is yes day trading is possible and explains why many attempt it! Despite the challenges, there are solutions for those with the right approach. Find these out and whether you can trade Forex for a living!

What you need to know

Trade Forex for a livingIf you want to trade Forex for a living you should see it as a project, which in its
first instance requires learning how to trade.
This is not a
get rich quick

scheme. Few traders really make it, as they set out without

understanding the importance of discipline, patience
and being realistic around the capital needed. Opening an account with just $200
will not get you far
if you intend to pay the electricity bill each month.
Hardest of all is discovering a strategy which works for you.
A
solid
price action trading
method is critical

and will evolve with time.
The market never stays the same, so why should your trading strategy not evolve?

Make daily charts your friend

Lazy trading consists of
implementing a strategy and then letting it play out for you.
It is the positive opposite of over-trading. To do so means
understanding how to use the daily/weekly charts.
Learning not to over-analyse opportunities presented to you, but
trusting your trading strategy should become second nature.
Learning the weekly charts first, which are less stressful than daily charts
will allow you to make smaller, less costly mistakes.
Best of all, this can take as little as 5 minutes a day once you get the hang of it. Once comfortable with weekly charts,
you should look to progress to the weekly ones!

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Keep the day job

Until you are profitable over a substantial period of time, potentially a year or two,
it is advisable to keep your day job!
 Generating enough profit to take money out of your trading business to pay the billscreates pressure and stress. This is on top of creating enough profit to re-invest and grow your business.You could have a bad month or a one-off event
(such as a financial crisis)

which wipes out a large part of your capital.
Your attempt to trade Forex for a living will have been bought to a crashing halt before it even started in earnest!

Studies show that a single person must earn £18,400 a year in the UK to have a normal life. A parent in a working couple with two children must earn £20,000. You
must not underestimate the pressure
of trading on the Forex market. If the pressure to make ends meet is too big,
you might end up entering into bad trades.
Whereas if your main source of income is something else than Forex trading, you can execute trades
without any pressure to perform.

Trading capital needed to trade Forex for a living

You need capital to trade Forex for a LivingHaving a large amount of funds to trade should create larger profits.
Realistically you will need hundreds of thousands to trade Forex for a living.
For example, having a £1,000,000 portfolio and placing a 2% position which makes you a 5% return is £1,000 profit for that trade! A £200,000 portfolio where you place a 2% position, with a 5% return is £200 profit. The number of successful trades you place will decide how much capital you need.
There is a saying that you need money to make money!

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Be wary of leverage

For those with smaller portfolios, the
temptation to use leverage can be hard to resist.
This can cause problems. The need to meet funding requirements could
push you into taking more risk than you should.
This can lead to bad trades and loss of capital.
Without your capital, you can’t trade Forex for a living.

Risk management

Managing risk is important to trade Forex for a LivingLearning to see risk management as
your priority rather than frustrating potential opportunities will keep you in the game! The
larger the risk does not necessarily mean the larger the reward,
but it can mean large losses. If a trade has a downside risk of 10% with an upside potential of 30%, then the 20% differential is attractive. This
risk-based approach
will mean you will
pick only the most worthwhile trades. Trading can only be profitable if you don’t start by losing money first!

We regularly
preach discipline
as without it,
you will makemistakes.
One of these is the tendency to over-trade. The desire to get involved and have your say can often lead to
nipping a positive opportunity in the bud.
Letting your trading strategy play out should be automatic!

Conclusion

To trade Forex for a living you
will need a trading plan.
This is
no different to having a business plan for any normal business. You will need capital to trade with, as well as income to cover your costs.
Patience will be needed to educate yourself for what is required.
Above all, you will need to learn from your mistakes.
A loser is someone who never learns from their mistakes.
A winner is someone who learns from their mistakes so as to never make them again.
Do you think you have it in you to trade Forex for a living?










Can You Trade 20 in Forex

Source: https://thelazytrader.com/articles/learn-to-trade/can-you-trade-forex-for-a-living/

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