Trading forex for a living is often seen either as a delusional idea or as a modern-day goldmine. You might hear people saying that having forex trading as your main source of income is too risky, implying that having a regular full-time job is more secure. The global pandemic has proved otherwise – according to The International Labour Organization, 8.8% of global working hours (255 million full-time jobs) were lost worldwide within only a 3-month period. Even beyond a crisis, there is always a chance to lose a job.
Others consider forex to be a way to get rich quickly and effortlessly, following the lead of unethical advertisements that says "Give us your money and get rich today". And so many people have fallen prey to their false expectations. We believe the truth is somewhere in the middle. Let’s take a closer look at why we think being a full-time trader is an option and what it takes to become one.
Can I do Forex trading for a living?
There is a common misconception about forex that it is a kind of gambling where one can get lucky and become a midnight millionaire or get unlucky and lose everything. This belief is wrong as it overestimates the role of luck in trading. Successful traders earn due to their preparation and years of practice. They’ve been testing strategies for a while before risking any big sums of money. So will you if you want to succeed.
Expecting to become rich quickly or start making a living from the first day by trading forex is a delusional idea! It takes time, sometimes years to get the knowledge you need for true success. However, there are thousands of people who have proved that FX trading not only can provide one with a decent income but even help to maintain a luxurious lifestyle.
Why trading forex for a living is actually a good idea
The main advantage of trading currencies professionally is that it has no limits in terms of potential income. Unlike any job that implies an average salary level, forex can offer you limitless earnings. What you make basically depends on what you know. There are so many ways to boost your skills and become a better trader and earn so much more money than you would if you had a job. A higher motivation of "being your own boss" puts you in a position to earn more. And lastly, it offers flexibility that almost no other occupation can offer. These are the main reasons why so many people are seeking to become forex traders.
How much do you need to trade forex?
One of the most attractive things about forex is that even $1 is enough to start trading. But would it be enough to earn a living? Obviously, no. Even if your life-style is rather humble, you will need to make sure to invest a decent amount of money into trading. On average, professional traders gain 5-15% profit from what they invest. Knowing this you can easily count how much you need to deposit in order to gain a desirable income.
Not every person has a lot of money for the initial investment. Luckily there is leverage to help one make more with relatively smaller amounts of cash. Just remember that using leverage increases your income but it also aggravates losses that do happen from time to time. Keep that in mind while counting your potential results. Thus, trading small amounts of money makes a lot of sense for people whose aim is to learn, not to line their pockets. Gaining any sizeable profit will require more cash and good skills to manage it.
Is forex trading profitable?
How much money can you make trading forex? Experienced traders say there is no way to earn significant sums of money having invested a little capital. But with bigger investments, a 5-15% gain per year might sound like a tempting scenario. "So, is there any point in even trying if I don’t have a lot of money?" – you probably wonder? Yes, there is. First, before you actually risk a lot, it makes sense to practice on a smaller amount of cash. Trying out strategies and making sure you do things right can take months or even years but think of your potential gains. Forex is for those who think far beyond the present moment.
Is it hard to be a trader?
Whether you can or can’t make a living trading forex primarily depends on your skills and secondly on the amount of cash at your disposal. Leverage and investors’ money make it easier to earn greater income but let’s not forget that using someone else’s money involves greater responsibility and risk. Some traders wisely choose to adhere to a 1 % rule which claims that a trader must not risk more than 1% of his/her money on a trade. This rule makes them more resistant to unexpected market moves and eventually saves them from big financial losses.
Part-time vs. full-time traders
Part-time traders are usually those having a job and trading as a hobby and for a side income. Since the FX market is open 24 hours a day, these people have no problems combining it with their day jobs. Unlike professionals, they tend to use their own cash and don’t take big risks. Every professional trader once was a beginner who got curious about forex and took the long road learning about it, making a bunch of mistakes, and becoming advanced investors.
Full-time traders are professionals who trade forex and receive a profit that makes a great chunk of their income. Making market research their daily routine, professionals are well-skilled to operate with bigger funds, sometimes even with other people’s money. They may work for hedge funds, big banks or be self-employed, managing private accounts. And this is a particularly interesting scenario for those who plan on making a living trading forex.
How can I start trading?
There is no single scenario for people who want to become full-time forex traders. It is impossible to master something instantly. It takes months or sometimes even years to learn to trade successfully. So spend some time learning to become great. What we don’t recommend is changing your life radically if you are still uncertain about your skills and strategies. If you just want to try your hand at trading, it makes sense to vacate some part of your day for learning and practicing. Don’t quit your job before you are confident in your knowledge and skills. Take one step at a time. Once you feel your forex trading brings you more money than your job, think of treating FX as a career.
If you are at the very beginning of your trading path, consider opening a demo account that allows beginner traders to learn Forex without the risk of any financial loss. Teaching accounts show the real situation on the market and actual quotes. The only difference is that you trade virtual money and cannot withdraw any profit.
What Forex traders I should read about?
It is not difficult to prove that Forex trading can bring you money by mentioning the names of George Soros, Andy Krieger, and Stanley Druckenmiller. These people not only managed to earn a living out of forex but made great fortunes. They still serve as a source of motivation and inspiration for those who are only at the beginning of their investment careers. These names are among the most famous ones but there are so many more traders to learn from. And it is not only the stories of success but also the stories of failure that you should be interested in. "Learn from the mistakes of others. You can't live long enough to make them all yourself." Eleanor Roosevelt said. And it is good advice for traders.
So, does anyone make money trading forex? The answer is yes! It is realistic to make a living out of forex trading. Some people even manage to get really rich. To do so, make sure you have acquired excellent skills and developed efficient trading strategies. A significant income can be only achieved with big investments, so professional traders deal with high trading capital to make a huge profit. However, sometimes even the most thriving traders lose. Balancing losses with huge profits is a skill that any good trader must have. Open a trading account on Justforex and start building your future today!