How to Become Multi Millionaire Trading Forex, with a Proper Trading and Risk Management Method
You can sit at your laptop, trade forex and make a lot of money from the comfort of your home. This is too exciting and attractive to everybody. It looks like a very easy business at the beginning. You start reading about forex and soon you will realize that forex really makes money.
First, we are eager to find something that makes money. When we succeed to find it, we think about the ways that make more money with it. You ask yourself whether it is possible to make more money within a shorter time.
Human is infinite by nature. We don’t want to be limited at all. We want to be free to do anything we want. When it comes to forex trading and we see that it can potentially make money, we want to maximize the money it makes. One of the ways that comes to our mind to make more profit within a short time, is taking a bigger risk. This is a way that comes to the most of the novice traders’ minds, specially because many of them can not open a live account with a reasonable size. However, it is a risky way. I will tell you why. There is a much better way to grow your account faster. Before talking about that way, please see the below examples to see how taking a high risk can “theoretically” grow your account much faster, but can practically wipe out your account.
If you open a $1000 account and make 5% profit per month, your account balance will be $3,225.10 after 2 years, if you don’t withdraw any money and keep on making 5% profit every month for 2 years.
If you keep on trading that way, your account balance will be $18,679.19 after 5 years.
I don’t say that you can consistently make a 5% profit for 5 years. You will have some losing months as well. These numbers are just examples.
If you can neither make more profit, nor you can open a larger account, you have to be happy with the rate that your account is growing, or you have to find a different way to grow your account faster which can be more riskier as well.
If you open a $50,000 account, and make the same 5% profit per month, your account size will be $161,255.00 after two years (of course if you don’t withdraw any money for 2 years). Then you can keep on making 5% profit per month, and withdraw $8,062.75 every month. That is not bad. Indeed, it is a good monthly income. But the problem is, most of you cannot open a $50,000 account at the beginning.
So the only option that comes to your mind, is taking a higher risk. That is when the greed takes the control and you can lose your shirt because of it: You think you open a $1000 account with a 500:1 leverage. You can take a 1 to 2 lots positions with such an account without any problems. Then you calculate and will see that if you open a $1000 account and make 100% profit per month (you double your account every month), you will have $4,096,000.00 after one year or $16,777,216,000.00 after two years (of course if you don’t withdraw any money).
Wow! It is amazing. It is mind blowing, isn’t it?
You can become multi-millionaire within 1 to 2 years, by risking only $1000.
The other thing is that it is impossible to make a 100% profit every month for several months or a few years while your account leverage is 500:1 and you are risking too much. Those who try to double their accounts every month, can get lucky to do it once or twice, but then they will wipe out their accounts the next month. To double your account within a short time, you have to take too much risk that will result in big losses finally. If it was that easy, now we had so many millionaires in the world who would do nothing but trading Forex from the comfort of their homes.
The problem is 99.99% of the traders decide to turn a small amount of capital to a huge wealth, while they have not properly learned to trade yet, and they have not passed all of the learning stages. They open an account and try to double it every month after a few weeks/months of learning and practicing. Therefore, they lose their money and blow up their accounts.
Many of these traders top up their accounts a few times, but the same thing happens over and over again. Why? Because they don’t know how to trade. They want to double their accounts every month through Forex trading, but they don’t know how to trade Forex properly. So… A sweat dream changes to a nightmare, and someone who wanted to become a multi millionaire within 1 to 2 years, gives up on Forex trading after losing several thousands of dollars.
You should complete the learning stages first, open a live account, take a reasonable risk in each trade, manage your risk, position and profit, and grow your account slowly and steadily.
1. We have already talked about completing the learning stages a lot. You can follow the below posts carefully and you will pass the learning stages easily and without any headache: Become A Profitable Forex Trader In 5 Easy Steps
2. Now, I assume that you have passed all the stages and you have repeated your success with your live account at least for 3 months consecutively. Above all, I assume that now you are patient and disciplined enough to wait for the strong and perfect trade setups. So your success rate is really high. I mean you pick the trade setups that either hit the targets, or at least give you the chance to move your stop loss to breakeven. So you are now ready to grow your account.
Start with a small account at the beginning. Don’t think that if you open a big account, you will shorten your way. Risking a larger amount of money creates harmful emotions that don’t let you trade properly. Your greed pushes you to open a larger account, and then your fear makes you blow up the account.
3. You should trade patiently until you double this account. I don’t know how long does it take you to do it, but be patient until you double your account. Then withdraw the initial capital and leave the profit in your account. You are now trading with your profit, and you are not risking your capital money.
These are the articles you will definitely need to read:
- Double or Even Triple Your Forex Trading Account Risking 2-5% Only
- Forex Calculators
- Risk/Reward Ratio in Forex
- Money Management in Forex
Good luck 🙂