WealthWeek

If money and wealth is on your mind, you probably know all about the FOREX, no doubt. Or, perhaps you’ve at least heard about it.

But, what can it really offer you?

Putting all the hype aside that you might have heard (stories of six figure, monthly fortunes come to mind), does the smart wealth builder such as yourself stand to make a lot of money playing this market?

Yes, most definitely.

But, like everything in life, there is a catch. In my thirst to learn more about this amazing market, I have determined that the following 5 key points show why playing this market is not a slam dunk with respect to quick riches (at least, from the get-go):

• There is a steep learning curve. Some people paper/demo trade anywhere form 2 months to a year before they go live with their own money.
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• Psychology plays a key role. Learn how to control your emotions and you’ll be ahead of the game.
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• You must have a proven system (that you’ve demo-traded and back tested).
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• It takes “no-excuses” discipline to keep yourself in check. No system in the world will help you if you lack discipline.
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• It takes plenty of money if you plan to practice proper management of your capital.

Still interested?

You should be. Those who practice and take the time to learn how to trade this incredible market do, in fact, make great returns on their investment. Some of those stories you’ve heard are very true, indeed — good and bad!

The key is taking risk, but also managing it and having a system and discipline working at the same time to protect you. Once your trading becomes a boring, unemotional, calculated process — that’s when the money will start to show up!

How much can you make? Well, that’s not a fair question apparently (as I’ve come to learn) because each person will have their own strategy, bank roll, money management rules, etc.

For instance, consider two traders who make it their strategy to earn 40 pips in one day, while risking only 1% of their account. In this example, lets say that the first trader only has $100k in his account, while the other has $1M. We’ll assume that they are both using a standard account, trading at 1:100 leverage and that each lot size is $1000. At 40 pips, the first trader will take home $400 (trading 1 standard lot), while the other trader, who has a large trading account, will take home $4000 (trading 10 standard lots). In both cases, each trader achieved the same outcome from the market — they got 40 pips. However, one profited a lot more! The common denominator here, of course, is the amount of pips earned. But, scalability determines how much those pips are actually worth to you (having a trading account worth $100k versus $1M). Since account size will vary according to each trader, one really can’t answer ‘how much can be made in forex’.

Don’t have $1M? Don’t sweat it… At this stage of the game, not many wealth builders do. The good news is that you can still trade FOREX without a hefty bankroll. Take heart, you will never loose more than what you deposit into your account. So, if you start with a balance of $2,500, you stand to loose a maximum of that much and not a penny more. That being said, don’t sell the farm to get into the market! Make sure that whatever you do deposit, it is an amount that you can risk and are willing to loose. FOREX investing is no different than any other sort of investing… You want to make sure your livelihood is fully intact and that you’re playing with risk money as I call it.

THE BEST WAY TO GET IN: You can start with a mini-account, where lots trade at $10,000 instead of the standard $100,000. This means, pips are only $1 each, but while you learn the game, it’s a wise option. And, you’ll be more in line with proper money management, which means you will stay in the game (the main point)! Make your mistakes on a mini and your money on a Standard - you’ll be the one with bragging rights if you do!

All things considered (from 1:100 leverage to mini-lots), you can still play this market and grow an account faster than you could have ever imagined. But, first things first — you have to earn your stripes! Become a master at gaining pips first; you can always scale your account up later (i.e.: trade more lots).

To your success,
Eff Jay