- 5 Steps To Make $200 a Day Online
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- Open a $100,000 live Forex trading account and make 1000% Profit
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5 Steps To Make $200 a Day Online
I only have $10,000 to start with. How should I plan my trades so that I can make $500 per day currency trading?
That’s a great question.
Many beginning traders who attempt to make big money currency trading fall into the trap of ‘unrealistic expectations’ and I will take this opportunity to show you what I mean.
The currency trading market has received a lot of attention over the years due to all the wonderful benefits it has to offer, including accessibility and trading volume in particular.
You have no doubt read about (or heard of) people who are making five, even six figures every month in this market.
Well, lets look at what it really means to make 5 figures in the fx forex market.
$500 per day equates to $10,000 per month (as there are 20 trading days in a calendar month). So, essentially, what you are really asking is how to double your money, at least as far as the first month goes.
Lets analyze this further and see if it will work…
Lets assume you decide to do 1 trade per day (so, 20 trades for the month) in order to reach your goal of $500 per day.
In addition, with $10,000 of starting capital, you are better off starting with a mini account (versus a standard account). Now, in a mini account each mini lot yields $1 per pip captured (on average).
Open a $100,000 live Forex trading account and make 1000% Profit
This fluctuates, of course, based on the currency pairs but we will assume it is $1 for this analysis. Now, at $1/pip captured, you will have to capture 500 pips per day.
Ask yourself: is this realistic?
Unfortunately, it is not. And, if you attempt to do this, you will be taking on far too much risk to warrant doing it in the first place.
So, that leaves you with another alternative: increase the number of mini lots traded each day in order to increase your net gain per pip captured. You will then cut down on the number of pips you’ll need to capture on a daily basis.
Here are some possibilities:
- 2 mini lots – 250 pips needed
- 5 mini lots – 100 pips needed
- 7 mini lots – 70 pips needed (approx)
- 10 mini lots – 50 pips needed
In looking at these estimates above, 50 – 70 pips/day looks like a better target.
What If You Don't Have That Required Trading Account Size?
In another words, I believe it’s possible to capture 50-70 pips/day in this market, realistically speaking, as opposed to 500 pip per day.
Now, I’m not saying that it is not possible to get 100 pips/day or even 500 (especially on days when there’s a fundamental announcement). In addition, scalpers jump in and out of this market constantly, grabbing 1, 2 even 5-10 pips at a time and they do this all day long… Their daily pip capture adds up, for sure. But still, when you look at the highs and lows of a typical day in the major markets, you will see that while the markets do tend to have quite a spread, it still pays to be conservative.
And remember, there will be days when you look for trades and you simply won’t find any opportunities. Foolish traders forget this, which is ultimately very dangerous because they end up seeing what they want to see, all due to the fact that they have a daily goal to service (like making 500 pips/day).
Do you see where I’m going with this? Realistic expectations help you trade better, which preserves your capital in the long run.
Forex Day Trading: How To Create Massive Wealth From Forex Day Trading
Needless to say, preserving capital equates to being able to make profits down the road because it keeps you in the game longer. Trust me on this!
Getting back to the analysis…
So, lets say we’re confident we can find 70 pips/day trading the Euro and the Pound.
That’s 7 mini lots we would be trading, which means:
$7 profit/pip captured if the market favours us
… OR …
$7 loss/pip if the market turns against us.
Fine. Now, we have to look at risk.
If you’re working at a ratio of 1:1.5 (aiming to make $1.50 for every $1.00 risked), then you would be risking about $330/trade (or, 47 pips). $500 approximately is about 1.5x the amount of $330 (I‘m using round figures here instead of actual numbers for simplicity).
In risking 47 pips (I.e.: in creating stop losses that are 47 pips wide, I would feel comfortable because that‘s enough room for the market to move within before I would get prematurely stopped out – so that looks good).
The next point I would need to address is the percentage of risk I’d be taking on to make a trade like this.
That is, if I ended up loosing $330 on this trade (as opposed to making $500), what % of my trading capital would be lost (or, drawn down)? As it turns out, a $330 represents a 3.3% loss of capital and this is not good.
At this rate, my entire account would be drained in only 30 trades! That’s a bad sign and a red flag that should immediately put a STOP to any trades from occurring.
Lets get back to the original question now…
You want to make $500 per day out of your $10,000 capital, but in doing so, you would be taking on far too much risk.
You would either need to:
- Increase your capital, or
- Aim to make less each day
Just in case you’re wondering, a $330 loss represents 2.2% of $15,000 and about 1.7% of $20,000.
In another words, you would need at least $20,000 in your account to justify the sort of trading you’re intending to do (in my humble, conservative opinion that I developed from blowing up my own account when I first started). And, just to ruffle your feathers a little more… 1.7% is still too high for my liking.
How To Make $100-200 A Day From Forex Trading (Required Account Size)
I would not go past 1%, which represents a starting account of at least $33,000.
Yes, you read it correctly: you need a nice little chunk of cash to really make some decent money in the currency trading market.
Do the math with $250/day in profits or even $350 and see how your risk levels fare.
If it falls within the 1% – 2% mark (depending on your own risk tolerance), then you’ll have a better plan (assuming you are willing to make $350/day or even $250/day as opposed to $500 – for now)… I’d say that’s not a bad place to start!
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