I trade my own account for a living. Tell your story

I too started trading for my living. Now I am having another job but forex ia my aim and part time business. I feel satisfaction to work with it. It gives us reward as we put our abilities in it. We need some personal control that not influence trading.

Every trader dreams of taking a small amount of capital and becoming a millionaire off of it. The reality is that it is unlikely to occur by trading a small account. While profits can accumulate and compound over time, traders with small accounts often feel pressured to use large amounts of leverage or take on excessive risk in order to build up their accounts quickly. Not realizing that professional fund managers often make less than 10-15% per year, traders with small accounts often assume they can make double, triple or even 10 times their money in a single year.

The reality is, when fees, commissions and/or spreads are factored in, a trader must exhibit skill just to break even. Take for example an S&P E-mini contract. Let's assume fees of $5 per round trip trading one contract and that a trader makes 10 round trip trades per day. In a month with 21 trading days this trader will have spent $1,050 on commissions alone, not to mention other fees such as internet, entitlements, charting or any other fees a trader may incur in the course of trading. If the trader started with a $50,000 account, in this example, he would have lost 2% of that balance in commissions alone.

If we assume that at least half the trades crossed the bid or offer and/or factoring slippage, 105 of the trades will put the trader offside $12.50 immediately. That is an additional $1,312.50 cost for entering trades. Thus, our trader is now in the hole $2,362.50 (close to 5% of his initial balance). This amount will have to be recouped through the profits on the investment before the investor can even start making money!

A Realistic Look at Fees
When fees are looked at in this way, just being profitable is admirable. But if an edge can found, those fees can be covered and a profit realized. Assuming that a trader can establish a one-tick edge, meaning on average they make only a one-tick profit per round trip, that trader will make:

210 trades x $12.50 = $2,625

Minus the $5 commissions the trader comes out ahead by:

$2625 - 1050 = $1,575, or a 3% return on the account per month

The average profit shows that while the trader has winning and losing trades, when the trades are averaged out the resulting profit is one tick or higher.

Making an average of one tick per trade erases fees, covers slippage and produces a profit that would beat most benchmarks. Despite this, a one tick average profit is often scoffed at by novice traders who shoot for the stars and end up with nothing. (To learn more, see Price Shading In The Forex Markets.)


by Cory Mitchell

Considering Leverage
Leverage offers high reward coupled with high risk. Unfortunately, since many traders do not manage their accounts correctly, the benefits of leverage are rarely seen. Leverage allows the trader to take on larger positions than they could with their own capital alone.

Since traders should not risk more than 1% of their own money on a given trade, leverage can magnify returns, as long as the 1% rule is adhered to. However, leverage is often used recklessly by traders who are undercapitalized to begin with. In no place is this more prevalent than in the foreign exchange market, where traders can be leveraged by 50 to 400 times their invested capital. (Learn more about this in Forex Leverage: A Double-Edged Sword and Adding Leverage To Your Forex Trading.)

A trader who deposits $1,000 can use $100,000 (with 100 to 1 leverage) in the market. This can greatly magnify returns and losses. This is fine as long as only 1% (or less) of the trader's capital is risked on each trade. This means with an account this size only $10 (1% of $1,000) should be risked on each trade. In the volatile forex market, most traders will be continually stopped out with a stop so small. Therefore, in this market traders can trade micro lots, which will allow them more flexibility even with only a $10 stop. The lure of these products is to increase the stop, yet this will likely result in lackluster results as any trading system can go through a series of consecutive losing trades.

In this example, traders need to avoid the temptation of trying to turn their $1,000 into $2,000 quickly. It may happen, but in the long run the trader is better off building the account slowly by properly managing risk.

With an average five-pip profit and making 10 trades per day with a micro lot ($1,000), the trader will make $5 (estimated, and will depend on currency pair traded). This does not seem significant in monetary terms, but it is a 0.5% return on the $1,000 account in a single day. As the account grows the trader may be able to make a living off the account, but attempting to make a living off a small account will likely result in increased risks, excessive use of leverage and often large losses. (For more, see Forex Leverage: A Double-Edged Sword.)

by Cory Mitchell

Very useful collection Sandy.
One thing pls., does round trip trading means a long and the subsequent short?

Hi sandycarrot.

http://www.forexfactory.com/showthre...58#post6794558

Average, leverage, edge , percentage, position size, number of trades.and so on...

the problem remains the same, for 95 (plus) percent of retail traders....the "hopefull edge",remains on the cards of the Broker and big Boys....

"Give me a Dollar and an edge", said the best horse racing gambler in Australia....if you have a consistent edge, you don´t need to waist your time on these Forums...
The reality is, hardly anyone has one....almost like roulette in las Vegas, the edge belongs to the house....
They are the ones who can play around with capital size, opportunity, percentage risk, etc....
For most retailers, running out of busness is just a matter of time....

Anacot, great story, thanks for sharing. It is remarkably similar to mine and I am inspired by your story, really. I remember seeing a special about daytraders all the way back in 1999. This was just before the dotcom bubble when it was glam to be a daytrader and they were making big money in the stock market. I remember saying to myself, "That's how I want to live". They were their own boss, and lived life on their terms. It kind of stuck in the back of my mind for some time, but I didn't pursue it right away. I had two young daughters at the time and wouldn't have done anything considered 'risky'. Fast forward a few years, a couple of failed business ventures and a couple of job changes, in 2005, I finally decided to take the plunge and deposited some money in a brokerage account to trade penny stocks.

I had decent success is pennies and saw how quickly an account could grow. The thing about penny stocks is, a change from .005 to .01 seems pretty small, but you've just doubled your money, and it happens pretty easily. Soon after, though, I turned to Forex, and I've been struggling to be profitable ever since.

Like you, I will make it or die trying. This is the thing I always come back to. I've 'thrown in the towel' numerous times for trading, but I always come back. It is said that the thing you do for a living should be the thing that you would do in your spare time if you had all the money in the world. If money were no object, I would trade, plain and simple.

My goal is to earn a steady stream of income from Forex, and have some extra capital to take some big gambles in the pennies. Good luck and take care.

Because of leverage the best way to make steady income is build acct to 80000 and leave it there so from that point on you can draw each month an income. I took 10000 and after 1 yr built it to 80000 and I average between 15 and 20$ each month which equates out to 12000 to 16000 a month. It may not be millions but its a nice income. Oh you must have a reliable and consistent method or this wont work I have been doing this for over 3 1/2 yrs. Been trading for 11 yrs so I put in my dues.

Thank you very much for these inspirational words of wisdom !!

Fxpivots. Could you expand a bit on your experience with withdrawing 12k to 16k regularly? I am referring mostly to things like brokers stalling or making up all sorts of excuses for not transferring your money, etc.

I work as a forex broker and i have been learning both fundamental and technical analysis for around 3 years and playing with demo accounts for around 2, after i was confident with my knowledge i put 5k into an account with Alpari.

My trading methodology does change from time to time, i use Fibonacci retracement and ATR and a few moving averages depending on the volatility of the market, i have adapted my SMA to the tenkan san which looks at the moving averages but takes into account volatilty. Account is not that much higher than when i deposited however still trying to hold onto open positions for longer if i can crack that then i should be looking at 250 - 400 % growth per annum.

I wouldn't say i trade for a living but to feel like i have accomplished something...

I started trading in 2001 with a demo from saxobank then internaxx .i opened a small account with refco with 300$ only .i lost it in one week in a euro short trade.i then returned to demo and keept on it until 2003 when i sold a shop from inhertance with 30000$ and i invested that sum with oanda .i lost half of it and withdrawed the rest .later on i invested with mb trading i also lost half of the investment in the big crash of 2008 .that time i was developing my trading system which is cog system .the system made me profit at start and go on wining trades good trades i started to sell the system stoped trading and i made about 60000$ from selling it .but at the end the system code was cracked and system become avaliable a modified version of it .all this time i was studying medicnine and surgery so i di dnot put big effort in trading i managed to double an account in two month and i withdrawed the money .until i had finished my studied in collage i was just playing around with demo and small accounts .i just finished my final exams last year and i started my post collage studies .befor four months i decided to come back make a stratgey that i can relay on that is easy and make me have time and the chance also to complete my studies in medicine and surgery and ended with numerical analysis i like logic and numbers and i think they are so importnat .this days i am finalizing the stratgy and it is working good until now just need to understand it more and more .
i have a land also from inhertance i come from a wealthy big family with lands and buiildings every where in sudan . i will sell a small piece of land only 68meter with about 68 kilos of dollars it is in middle of a market place trade it along with my medicine studies .
the end reslut now is positive because i made good money from my systems at start .
now i am investing small sums and trying to withdraw profit once i have it in hand .i will keep this up until i finalize my stratgy and my land is sold .(it takes a long time if you want a good price and i am not in a hurry )
after that i will play for real along with my studies the startgy then should be ready to make me do less effort and have more time for my post collage studies and it will be as it is ready allready i made 20% last week from it so just waiting for a fair price for my small piece of land now i am playig small i still have more lands and small buidlings and i may have more also as inhertance in future .
if the investment went good i will try to invest a bigger sum i also have in my family members that can invest with me big sums if i just made a good stratey and a good recored i dont have it yet only two month and one month recored for several times different accounts they want a long time recored although i dont like to trade for others but the are my close family so i should be have little complaince
i live very simple i smoke i eat little i spend little actually i am not that money fan i am just looking to enjoy my time i find trading the most joyable thing you can do making a living
i love talking with people around me because style of life where i am living now hard to find friends so i really want to invest a big sum and change the place i am in now .
i am online al day looking for a normal social life but unfortunatlly you can not make very good friends online so i must change my place i hope so i am studying for usmle united states medical liscencing examination looking to do what i dreamed of there .my sister had the green card recently so she will help me in that i hope so
all have a nice day

remove your signature.

I have been in this game for the past 2 years, took the secker courses and followed all the big names and players, I have blown up 5 demo accounts
using their systems and strategys. In the last 6 months I have developed my own style and indicators. I have turned $350,000 into $3 Million and my fourex factory demo is going well too and is there for you to see. I'm still tweeking my indicators as they work well in trending environments but not as well in range trading environments.
I have had a up and down month in June but I now believe I have cracked the range issue.
Started trading live last week and have turned $800 into $1500 , so slow and steady.
Here is my proof, see attached file
BUT STILL WORK IN PROGRESS !!!

like anything else in life..only a small percentile succeed while everyone else grumbles and makes excuses.

i find it kind of weird how so many people wast time with indicators and systems..unless you're a quant, these things are pretty useless and the only thing they're good for is making your charts look cool when you're showing them to someone who knows nothing about charting

the only indicator you need is the ability to draw horizontal and vertical lines on your charts and how to read the candles

are you scalping or do you trade intradays??

Hi, you can earn an income from Forex but you must treat it like a business. One of the biggest area's to work on is Risk Management. Your capital must be protected for this allows you to trade every day. If you squander it then your trading days are limited. I say this as many retail traders do not have any risk management rules which from a trading viewpoint is like playing russian roulette. Next is get to know a currency pair intimately. Myself one of my favorite pairs is GBP/JPY so I have to know not only this pair but USDJPY and GBPUSD as well. The latter two influences GBPJPY so now I have to be up to speed on all three.

Also there is a big difference between trading on the retail level vs institutional level.

There are lot's of posts on forex trading for a living so I will add it is possible to make an income, bottom line is your skills will make you successful and that takes time. Plus as soon as you can accrue enough capital get off the retail level and start trading on Reuters using a bank as your credit pool and for that I would think you would need at least a million to start.

Daily or yearly?

If you are absolutely sure, than take a loan.

I am sure if you know how to make money, the 3k will not be a problem you can make it from 300.

Thanks guys for sharing your stories. Please keep us posted with your success story as it develops further!!