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Forex Profit Goals - How To Generate Those Big Profits
By James Woolley
In many ways trading is not that different to gambling because if you're lucky you can potentially win huge amounts of money. However with such rewards on offer, you can also lose lots of money as well, particularly if you use large amounts of leverage when trading the markets. So is it really worth going after the big profits?
Well if you're a gambler and you can afford to lose all of your trading capital in the worst case scenario, then sure why not go for it. However you will soon find that it's extremely difficult to win big when you are taking undue risks, and it's not good for your heart either.
You are much better off reigning in your profit targets. Successful trading is not about getting a few big wins under your belt. It's about building your capital slowly and steadily over time using sound money management techniques.
A lot of people think that you need to be making around 10-20% per month in order to be considered a successful trader but realistically if you can grow your account by 3-5% every month, then you are doing extremely well. It's certainly better than putting your money into a savings account, for example, where you would be lucky to earn that in a year.
The
key is to use compounding. For instance even if you start off with a small amount of capital, you can still become extremely wealthy if you manage to grow your account by just 3% every single month.
To demonstrate, if you start off with $5000 and were to grow that account by 3% every single month for 10 years, then you would have $173,555 after 10 years. Furthermore if you were to achieve a monthly return of 5% per month, then you would be looking at an incredible $1,744,560.
Okay I know these figures are hypothetical but the point is that it's not really that difficult to grow your account by such a modest account each month. You just need a solid trading system in place. It doesn't have to be perfect because no system is, but if you can keep your losses small and ensure that your winning trades more than compensate for your losing ones, then you are well on your way to becoming a highly profitable trader.
So the point is that you should forget about trying to get rich overnight from trading because this is almost impossible. You should instead focus on growing your account month after month because this is a much easier and more realistic way of achieving your profit goals.
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