Can you actually live off Forex trading?

This is something i managed to get rid off from my head, luckily.

I am not afraid of blowing my account.
I even want to blow my account ! Different approach.
It means i'm closer to my winnings.

If one would use highly profitable EA, let's say based on Martingale, which is capable of 20000% profit in one month.

One could then afford loosing 1000$ (-100%)each month for whole year waiting one month to be successful .

(If EA manage to work for one whole month over the year.)

Then, numbers would be:

(11 x -100% ) + 20000% = a lot (not one lot, but a lot)

The way I see it, the key to living off the FOREX is to be able to live off the fat interest of an indefinitely-held, well-leveraged set of laddered positions within a "sane" currency pair.

Definition of...

"well-leveraged": Around 12:1 - enough to get a big benefit out of leveraging (read "fat interest"), but small enough that you can back any imminent margin calls with a quick burst of cash (but such coverage shouldn't be necessary because hopefully you're playing a...)

"sane currency pair": Two rock-solid countries paired together such that, if anything really crazy or unpredictable happened to them, you won't care what happens to your money anymore anyway, because you'll know that Armageddon has come. Take the US and Canada as examples.

"laddered positions": Simple - taking positions at various increments within a range; positions which will earn you nice interest as you hold them, which might be for a long time, and which, if they ever become too profitable if closed to retain, you can close at a large profit and then re-ladder again as prices move again. This spreads out risk, profit, and opportunity.

All easier said than done, but not nearly as hard as you think. Of course, money makes money, so hopefully you have $10K to start with to get the ball rolling, and smaller increments of cash after that to help the whole thing snowball, which is what I'm doing right now.

Then, the #1 thing you need to invest is your TIME! Lazy investors get what they deserve, smart ones do their research. And note that sometimes "research" means getting your feet wet in the market and seeing what happens when you do what, 'cause there's nothing like having actual money at stake to motivate you to keep paying attention. Research does NOT necessarily mean following the news. If you get the mechanics of the market right, you should be relatively immune to those things which many investors follow so closely. I think of my method as the "brute force" approach - we're not in the world of details here, knowing exactly when to let go of a position one minute to acquire another one upon hearing of some event or other. We're in it for the long haul. We're in it to build the equivalent of a bond. We're in it for the regular income. In the end, it's very rote and somewhat boring. But, hopefully, it's very profitable. So how boring can that be anyway, huh?

And by the way...

"fat interest": means way the hell more than any bank would pay if you were foolish enough to let them keep your money instead of doing what the banks do themselves and make leverage work for you!

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Can normal people, with small capital ($1000-$3000) make money and live off trading Forex?

Money has nothing to do with trading forex successfully. I mean money is not a problem. There is so big leverage build-in forex that you can start with very little money. The real issue with trading, not only trading forex, but all financial markets is the question ARE YOU REALLY ABLE TO CONSISTENTLY PULL MONEY OFF THE MARKET. The answer is simple for 98-99% of the people reading this forum - they are not. So what should bother you is not how much money is needed to live off forex but HOW TO DO THIS.
After 7 years of studying charts and forex (not counting 12 years in stocks) since 2005 I have to say this : in order to trade successfully you have to READ TAPE. What I mean by tape reading is the ability to recognize the forces driving market in a given time. Recognize demand and supply and then act accordingly. Some people do it by looking at DOM and Times and Sales. But I do it simply by looking at charts (5 min. and 1 min mostly). Of course time frames depends on traders some may use dailies and some 5 seconds.
I am not making my living by trading forex yet but I am able to make money quite consistently. As you can see it took me 7 years (!!) and I am still learning. The success doesn't happen overnight. After some 3-4 years I stopped losing money, then the next three years I made money but not consistently. Only now I am confident of my skills and that I can make money by trading. And every major change in my trading methodology came right after I wanted to quit forex for good J

Regards

Yeti

Come on, Fundamentals do not work? Really? Yeah, we may as well just depend on technical indicators to point us in the right direction every time. Actually, wish that was true, then our job would be a lot easier.

And as regards making a living off this market - yes, you can after years of profitable trading and honing your trading strategies. There's no quick fix to the grunt work you have to put in. For starters, review some of the online resources on Fx trading, then open a demo acc and start practicing.

Bringing this thread back to life...maybe...

Does anyone know 1 real person (w/ a driving license ) who lives off Forex trading who uses technical analysis only? not heard, not think, but know a person who lives of this?

I really want to know, since i never met, neither I even heard of anyone who lives off forex. People claim they might, they will IF all planets align, and so on and so forth....but it's just BS.
i am not talking about zillionaires...real person that say, makes 4 USD per month on average...over a 1 year period????

thanks a lot

For a beginner what broker do you recommend? I am look to trade conservatively and want someone secure and regulated.

There are many good brokers. Check reviews and real trader comments about the brokers. I use Hotforex & Oanda

~2:20 minutes of video: Trading on your own is a brutal brutal exercise.... it is very difficult to become good at it extremely difficult if you can you are a remarkable person truly remarkable if you can make money consistently trading on your own. I mean that.

https://www.youtube.com/watch?v=SxhoGSvcRRg">

If you're still a beginner, don't go live, just open a demo account to get familiar with forex trading platform. I'm trading with HotForex and you can start live from $5.

Beginers should begin trade with demo account otherwise trading in real account is so difficult and there will the chance of maximum loss while through proper learning you can earn consistent profit.

Yes. But no-one uses technical only and takes no notice of news announcements. There are a number on this forum too.

Depends on where you live. For instance, here in Cairo I can live using 300$ per month which is 10% of the 3000 $ capital you have suggested. And 10% is very doable if you have good money management skills.

I would second that and you can do a demo, check out and see if your strategy is viable over a given period and then make the move to a live account, pref small.

Normal people are very unlikely to be able to make a stable income over the long term - purely because normal people don't have the experience and it cannot be built overnight. However, there are people that make a healthy living trading fx but they have vast years of experience in the field, are usually always from a financial background and I am sure that most of them experienced huge losses when they started out. ...and yes you are right those that are making steady money and a regular income to live on are not doing it with the typical bankroll that a normal person has available.

I am also new and starting to play around. I have a 250 USD account with IBFX and also learnt a bit of MQL programming. I sure want to believe that you can make a living off forex market but from what I have seen so far, I don't think it is that easy- definitely not with a 1000 or 3000 USD account. The real question will be - what are the basic pre-requisites to make a living in the forex market? also, what about automated trading? can someone really make money in forex market using programs? I have few robot programs that I could write with my limited knowledge but really not showing any solid results yet.

It can be done but it would be risky. In order to do it with $1000 I would leverage 1:500 and depending on margin use 1-2 lot's per $1000 equity, however you would have to be absolutely sure of the direction because if you're incorrect 2 - 3 trades will halve your account (with a 10 point S/L) and could happen in a matter of seconds. Sounds like gambling to me. Seriously watch the markets for at least a year to get a feel for how the market behaves before going live.

No idea on automated trading but I highly doubt that it's possible to consistently return a good risk/reward ratio and those that espouse that its possible are all snake oil salesmen. There's no such thing in this life as easy money, trading can give you easier money granted it's not a physical job but the mental stress can be just as killer.

You probably won't be able to make a living from forex trading by having such a small account. You will have to build you account slowly. If you are a beginner I would advice you not to open a very large account because you will most likely blow up the account. Instead only risk an amount that you are comfortable losing, so that you can get your feet wet in trading.

Hi TheWriter30,

The short answer to your question is yes.

I am in a team of 3 and we all generate a comfortable income from trading forex. We have different appetites for risk and reward but there are those in our team who fly their own helicopters and drive limited edition performance cars. All these assets are paid for. This is not an impossible.

I hope this encourages you.

HP

We are so grateful that you have chosen to come down from trading-heaven to impart some hope on the less fortunate.
Now would you be so kind as to show us the way oh, you-who-made-it.

Hello Mingary,
The risk with sarcasm is that unless it's well-timed, it is easily interpreted as simply being obnoxious. Infer from that what you will.

Second, the question was: "Can you make a living from trading forex and are there any real individuals out there actually doing this."

The question was not "Share your trading strategy."

The answer was, yes, I know of at least 3 people who do make a comfortable living out of forex.

I spoke in the 3rd person, exactly because one risks exactly this sort of vitriole and you have not disappointed. That's the point, we don't specifically come here to share our failures only do we? (That was rhetorical, in case you feel compelled to actually contest that you're here to wallow in failure alone.)

I'll quote from a reply I posted earlier in the hope that it provides you and any others with a little more insight. It's not meant to be a 101 to trading, just what my trading has become.

And finally, I wont be baited by comments like 'chosen to come down from heaven' and 'oh, you who made it'. But I will be disinclined to reply to you, because thats just how a discussion works.

"It may or may not feel relevant in the spirit of this discussion, but a group of 3 of us wake at 5:45am each day here in the UK, we 'meet' online on a conference call, discuss a short prospect list based on the indicators we have become comfortable with over the course of the previous few months trading and make our selection.
We will typically trade 2 or 3, sometimes 4 currency pairs max and remain on the live call for as long as it takes to reach our daily target. The three of us represent entirely divergent 'styles' of trading but collectively we call trades based on our set of rules we have constructed.

Before i am accused of simplifying what we do, we bring a collective trading experience in currencies of well over 20 years. We are all in our early 40's.

In terms of approach, we have a militaristic view to money management, will never risk more than what we each have allocated based on our individual trading accounts. Between us we have cash trading balances that have permitted us to open very, very competetive retail accounts (decimal percentages) which has been key, along with negotiating low commissions.

I read many of these threads and find myself agreeing with pretty much every statement made (even if some of them are a little deliberate) as the forex market is a living thing as far as I am concerned. It is remarkably different from how it looked a year ago, and then a year before that.

To the sceptics reading this, I achieve nothing by overstating what we attain, other than to say that we each live very comfortable lives. From trading forex.

To the more technical who may be reading this, we select the top ADR pairs based on a 5 day average, place 'fast' and 'slow' guppies on a range-based chart and trade on entries in retracement as per any Guppy handbook. To help us select a profit level we take a 'scalped' approach to movements against the longer time based charts (we have 15m, 60m, 240m and Day direction indicators on our page) and we hold trades with the trend longer. We use a Guppy CBL to show entries within a 'column' on either side of the 30 guppy, using a study between faster and slower lines. It is an impressive screen and I have friends who chuckle at it, when we know its really just information.

Using this set of studies on eSignal, we continue to experience a consistent, measured and predictable return. We try to read as much as we can, and once we have completed our trading for the day (usually before 11am) we spend time doing what we enjoy with our lives. We will generally meet again at 4pm to backtest our mornings trades, and discuss the accuracy of our entries/exits and ways we might have improved. New ideas are shared (we are looking at P&F charts at the moment) because we like to believe that new ideas are worth investigating.

The bottom line is you can and will make money in forex if you want it badly enough. Work to apply as little emotion as you are able to and accept that you will suffer losses, but know that they simply take you one step closer to your next win. I also believe the individuals who have locked into a profitable system will tend to keep it to themselves. Very few characters have it in them to 'market' themselves in addition to being good traders, which is why I think we see so few individuals shouting out how awesome they are. I also believe none of the successful men/women want to sit back and have their particular system dissected by others who are probably more intelligent than themselves. In other words, it works for me and thats kinda the idea. I personally have invested years, late nights, weekends and pain and my choice of trading partners has come after an extended period of assessment. We have had bad days and we again have a policy on how we handle these, from flying to a game of golf before I am accused of sounding like we have a holy grail.

In our case I guess we are fortunate to have assembled a team who just happen to click and as a consequence we make money which is the point after all. Interestingly, we never socialise, we are a business. Though we do all get on ok over a beer.

So to the new amongst you, be ready to take it seriously. To those who have been doing it a while who might be feeling a little bleak after a bit of a bad run, go for a long walk. And read a book that talks about the emotion of trading. Those who believe its some dark conspiracy, take comfort from the fact that the biggest fine in international banking was paid recently by a very large trading firm, simply because they lost too much money. They don't know any more or less than you do. I would far rather trade as a small, insignificant individual in my home than be responsible for billions in managed funds, where consequence is your career in ruins. We are more flexible, more alert, as well informed and can compete evenly with the big guys.

Thanks for reading this, if you did and roll on Monday morning."

HP