Are you thinking about becoming a forex trader?
Are you ready to learn all there is to know about the forex market?
Forex trading is the fastest-growing financial market in the world.
In fact, according to the World Bank, the forex market is the largest, most liquid market in the world.
But can you get rich with forex? Or is it just an expensive hobby?
In this post, we’ll look into some of the major advantages of forex trading that could boost your earnings potential, but also discuss some of the pitfalls that you should avoid.
Let’s get stuck in:
So, Can You Get Rich with Forex?
Yes, you can get rich with forex. There are thousands of people around the world who trade forex every day, and they make a living from this. However, it can be very difficult to do for the average retail trader.
There is a reason why most people try to get involved with forex.
People often like to speculate on the direction of different markets and currencies.
They also enjoy taking part in trends, which can lead them to find some of the best opportunities.
But, there is a big difference between being a speculator and actually becoming successful at forex.
It takes a lot of hard work to become profitable with forex.
In fact, some people lose more than they gain when trying to invest in the market.
That’s why we need to spend time learning about this before we decide to get started.
Why Does Everyone Tell Me I Can Get Rich with Forex?
In my experience, there are a lot of people who want to make money with forex trading. This is a very lucrative business, but you need to understand the risks involved.
Forex trading is risky and it has a high level of volatility. This means that your profits could be affected by the market movement. You can lose a lot of money in a short period of time, so you need to be careful.
However, most of the promoters of forex trading are selling their trading groups and trading education.
Of course, they simplify their trading skills to make things look easier.
In fact, in experienced hands – trading looks like a walk in a park.
But if you are completely new to it, you’re going to struggle with the basics until you grasp the concept.
A lot of these promoters are paid by brokers for everyone they get to sign up and deposit into a live trading account.
They can be paid £150 to £1,000 per account that has been opened.
So of course, they are going to tell you that you can get rich with forex.
But realistically, you’ll be growing your capital over time — not overnight.
The first thing that you should know is that this is not an easy business to be in.
The good news is that you can earn a great deal of money with forex trading.
However, it is not for everyone.
If you don’t have the right skills, you will lose your money in no time. You need to learn how to trade the market.
You also need to learn how to read the charts.
You need to know how to use the indicators.
You need to be able to analyze the market and trade accordingly. You also need to know how to manage your risk.
In order to start a successful forex trading, you must first know how to trade.
You can learn this from our forex trading articles (It’s free).
It is a great way to learn how to trade.
5 Things to Know Before You Start Trading Forex
If you want to make money online with forex trading, you need to know that it is not easy and that there are many things to consider before you start.
Here are 5 things you should know:
1. ALL forex traders LOSE money on some trades.
If you want to be successful in forex trading, you have to accept that all forex traders lose money on some trades. It’s part of the game.
If you manage your risk correctly, you can have a strike rate of 10% and still be profitable.
In fact, some of the best forex traders in the world practise active risk management and acknowledge it’s this part of trading that makes them the chunk of profits.
2. If You’re Not Comfortable Losing All Your Trading Capital, Then You Should Probably Stop Trading Now.
Here’s the thing:
If you are emotionally invested with the money, i.e) “I can’t afford to lose this money because it’ll bankrupt me” then you will make mistakes.
- You will seek to trade big wins, on temporary moves.
- You will leave losing positions open in hope of a reversal
- You will lose your trading power to open positions in the red.
- You will jump in a trade out of hope. and you will cut the profits early to “get something back from the market”
I’ve seen it all before, people had come to me saying they have £5k left to their name, debts, and they need something that will change their financial situation.
Forex is NOT this.
If you can invest £10,000 into an account, for the sole purpose of growing it and can separate these funds from anything in your personal life – then you will have much more over your trading decisions
3. Forex Trading is NOT a Get-Rich-Quick Scheme
Too many people are hooked on the idea of instant gratifications and dopamine hits (Thanks to social media) that they also demand floods of money for doing nothing.
Let me tell you right now that forex trading is not a get-rich-quick scheme.
It IS POSSIBLE to pull out a huge win on an over-leveraged trade.
But if you are wrong, you will owe the broker a lot of money.
It’s better to build that capital, compound the returns, and before you know it – your persistence will see an account blossom into something much better than the interest rates from your savings account.
4. Getting The Right Trade 50% of the time is ABOVE 90% of traders
Too many traders worry about losing a trade
Yeah, it sucks.
But so does banging your toe on the desk.
You get over it just as quickly, just the toe may hurt for a little longer than losing the money.
Most professional traders at investment banks have a strike rate of 50% or so over their entire careers.
Which is INSANE.
With the right risk management, the returns from these trades can be exceptional.
However, you may focus on hitting 80%+ strike rate; which over time will drop
5. Trading ISN’T That Difficult
You can learn how to trade in 2 weeks with the right mentor with real market experience and knowledge.
The thing that kicks your butt as a beginner is that it’s like learning to drive a manual car.
At the start you stall, grind your gears and can never find the 3rd gear.
Over time, you learn to trust your muscle memories and before you know it you are driving a manual car without looking at the gear stick.
Trading is the same:
This is a skill that takes knowledge to start, experience to craft, and intuition/muscle memory to execute.
Over time, you will be able to read the market like a book to notice liquidity zones or levels of the markets that you should avoid.
Whereas a beginner you’d be too short-sighted to observe these.
Benefits of Forex Trading
Forex trading is one of the most lucrative forms of trading out there.
There are literally hundreds of different strategies and techniques for trading forex, and some people make a living from trading forex.
The key to making money from forex trading is to find a strategy that works for you.
And, that means that you need to know a bit about the different types of trading strategies and techniques available.
Forex trading can be very lucrative if you do it right.
There are many benefits of Forex trading including the fact that it is very easy to learn and there are no real barriers to entry.
Drawbacks of Forex Trading
There are many drawbacks to Forex trading. One of the main ones is that it is not for everyone.
It takes a lot of discipline and practice to become successful at Forex trading. And, it is not for everyone because some people do not have the temperament to trade.
To become a successful Forex trader, you need to have a great deal of patience. You also need to be able to follow a strict set of rules and stick to them.
If you are not able to do this, then you are going to lose money. You need to learn how to manage your emotions, and you need to have a good understanding of the market.
You also need to know what you are doing. It is important to take the time to learn and practice.
A few mistimed trades on a leveraged account can wipe out your profits and your starting capital, so you have to know what you are doing.
1. Are there any tips I should follow before starting to trade forex?
Yes! It is very important to do your homework. You need to learn how to read charts, understand what a trend is, and find the best brokers. There are many things that can affect trading, so you must research all of this beforehand.
2. How long does it usually take me to start making money?
It takes time. Some people make $50 or even $100 a day after they begin. Others might not get started for months.
4. Which broker do I choose?
Each brokerage has different advantages and disadvantages. Find out which suits your needs the most.
5. What happens if my funds run out?
Make sure you set aside some money for emergencies. Your account may temporarily lose access, but it should only last a few minutes or hours.
To Wrap It All Up
In conclusion, I think that the answer to “can you get rich with forex” is yes.
But, it’s not easy. It’s a lot harder than you might think.
If you want to learn how to trade forex, then I highly recommend reading some forex trading books or our articles below: