When starting out in trading, every beginner wonders if they can make a living from trading. Let’s say that this is a legitimate question.
However, it must be kept in mind that there is no 100% safe and risk-free investment. And this is especially true in financial markets such as Forex. However, many traders have managed to achieve consistent gains that have made them millionaires. As a result, they have managed to afford the life they have always wanted. Many amateur traders become professional independent traders and make a living from it.
Be aware, however, that most of the time, to earn a living starting from a small portfolio, you have to take a lot of risk via leveraged investments. And leverage allows you to earn money faster as well as… to lose it faster! Thus, the AMF warns because more than 70% of beginner traders lose money via trading. So remember before continuing reading, never invest more than money that you are prepared to lose.
The advice given here is true regardless of the market and the type of trading you are going to do (crypto, stock market, forex, commodities, etc.)
Forex Trading: Reality Check – Dream Job or Just a Fantasy?
Whether it’s Forex, commodities or stocks, all you need to make money is sell a stock for more than you bought it for.
Let’s take the example of Forex. Forex is a market where currency pairs are traded. It is therefore a question of investing money to buy a currency and then sell it more expensive in order to make a profit. Thus, to earn a living with forex, you need to know how to place the right trades to get the most profit.
Obviously, since the exchange rate differences are tiny, you must either have millions to invest to generate a profit, or use leverage (the broker then allows you to bet 30X what you have in your portfolio so that you can buy more currencies and therefore make more profits).
It is therefore theoretically possible to earn a lot thanks to the leverage effect on markets like forex which is often favored by day traders (traders who open and close their position on the same day). At the end of the day, your only job will be to have made more winning trades than losing trades.
However, it is not as simple as that. Understanding the evolution of a currency, a financial index or a stock price is a complex matter.
There are many influencing factors. It could be a political crisis, a drop in the turnover of large companies that participate in maintaining the market, a decision by the central bank, etc.
To earn a living, a trader must therefore master financial analysis (technical and graphical analysis) as well as trading tools while constantly keeping an eye on macroeconomic events.
The Trader’s Mindset: Your Secret Weapon in Forex
Many articles tell you about the importance of trading tools. Trading robots are mostly scams. If someone had the miracle solution to become super rich without doing anything, why would they waste time selling it to you?
What makes an individual able to live from trading is his ability to hang on, his desire to progress, to master the mysteries of the world of finance… in a word, his passion! If your only goal with trading is to get rich but you are not passionate about trading, move on. It is not possible to become a winning trader if you spend your time counting your gains and losses. On the contrary, a trader must be able to disconnect from money and its value.
He must ignore losses and gains in order to detach himself from his emotions. He must focus only on the market, his analyses, his strategy and his trading plan. So the question is no longer really “can you make a living from trading?” but “can you become a trader?”.
You need to question your own qualities. Do you know how to demonstrate discipline, diligence and self-control? If you are impulsive, forget about trading. Day trading is one of the most stressful activities there is.
Very often, we wonder when to take a position or exit it, which currency to buy, whether the trade we are about to make will be a winner, etc. Faced with all this avalanche of questions and uncertainties, the trader who does not keep a cool head will not be able to succeed.
Super traders who have managed to get rich have demonstrated self-control, prudence, diligence, discipline, positive attitude, etc. Thus, it is important not to be impulsive and give free rein to fear in your investments, whether in Forex or on the stock market.
It’s an extremely nerve-wracking profession, and it’s not for nothing that most professional traders have short careers. Less than ten years for most!
Think Long-Term: The Key to Thriving in Forex Trading
You should not give in to the temptation and the ease of earning a quick living with Forex trading. Trading, even if you are a short position trader, remains a long-term affair. Otherwise, the risk is that you win two or three times and then lose several times to the point of becoming discouraged.
In the category of beginner traders, there are 90% who make short-term trades and on small movements. And statistics reveal that the majority of them lose their initial capital within 90 days. That gives food for thought, doesn’t it?
You need to have a trading plan, prepare for failure, and start investing in your own trading education. Then you can consider making a living from trading. You need to aim high and proceed slowly but intelligently. It should be exactly like starting your own business. Success cannot happen overnight. It takes organization and planning.
From Your Living Room to Wall Street: Paths to Becoming a Pro Trader
Since the beginning of this article, we have mentioned the life of an independent trader. That is to say that only from your living room with a computer and an internet connection you have the possibility of earning money thanks to forex.
But know that you can also become an institutional trader and work for a hedge fund or a banking institution. For this you will not be able to achieve it by self-taught, you need a master 2 finance or banking and go through a position as an assistant trader in a renowned company. We wanted to say it, it is also a way of living from trading.
Organize or Fail: The Art of Making Money in Forex Trading
Organization is a key aspect to making money from trading . As mentioned above, this organization includes developing your trading plan and a schedule for your trades.
Added to this is the necessary discipline, as Warren Buffet says so well: “you need discipline! “
Many beginner traders fall into bad habits. For example, some traders trade too much once and double their account on a lucky break in just a few trades. Then they continue in this way and face big losses. A trader who does this cannot make a living from forex.
Indeed, making money on forex is not a question of luck but of organization.
Here are some essential tips to follow if you want to make a living from trading:
- Do not rush into or out of positions
- Take the time to develop a plan and strategy that suits your expectations and goals.
- Ensure the reliability of your trading plan and strategy
- Stick to your trading plan: don’t trade too much and in any conditions
- Aim for the long term to make a living with forex rather than short term success
Can You Make a Living Trading Forex? The Honest Truth!
Yes! But be careful, it is a difficult path. You must have the attitude and personality that will allow you to successfully withstand the vagaries of trading. You also need strong analytical skills and be quick on your feet.
If you are passionate about the financial markets and ready to invest yourself body and soul, then go for it. Otherwise, move on, the path to easy enrichment through trading by copying the best traders or through trading robots does not exist. Only beginner traders ready to invest, to train, to fall and to get back up, will be able to really earn money through trading.
