One of Vahid's articles includes the advice - "Don't trade Forex if you need to make money" or something like that
Now I appreciate that someone who is in financial difficulties should not look to Forex trading as a solution. But what about traders that do actually want to trade Forex as their main income?
When do you know that you are ready?
Due to various reasons and including ironically the continued weakness of the GBP against the Thai Baht, I am probably 2, maybe 3 years away from having to make a lifechanging decision. Inflation and exchange rates have effectively halved my purchasing power here and my savings are dropping quickly. Low Interest rates mean that cash gives me no income to be worth talking about
So the question is - "Will I be able to earn my living trading Forex?"
I believe that I am now at the level where I can trade without losing money overall and I hope that in another year I will be able to consistantly turn a profit.
I think that, if I am ready, I could start with a bank of 50,000 GBP with the target being at least 20% per year, and 40% to make life really comfortable.
With my current bank of 10,000 Pounds, the maximum (3%) risk is 300 Pounds, but with a 50,000 Pound bank the max would be 1,500. Nowadays, I'm just not sure how I would cope phsycologically with risking so much on one trade.

Vahid is a competent trader, but how does one know when you are at that stage?

Hi Keith

I am coming toward the same point from a different direction. I have a secure, fairly well paid job which is very demanding on my time. I would rather trade forex in a way that I spend chunks of time 'working' and the rest in family activities - or even getting bored occasionally I'm not getting pushed toward the decision but will have to jump from a place of safety...

I have a timeframe I'd like to meet which is giving up the day job in something like 3-5 years. My plan of progress towards that is to increase the pot by consistently making profits. Once that starts happening I will start transferring savings so that my trade size can increase, but only slowly. I am much better at analysis than at trading so I know that while I can cope with a trade which is £50 in the red I would be in a hysterical panic with one which was £1000 in the red

I believe from your posts here that you have the skills required to trade successfully and are building the experience required to deal with th larger stakes.

All the best

Michael

That is a great expression Michael "I am much better at analysis than at trading". I wish that I had thought of that.
I hope that I am on the right track and will find further improvement within myself. Thanks for the compliment, but I think that I still have a way to go before I consider myself properly skilled in both analysis and position stops etc.
I guess that not many of us have moved into risking so much on one trade. I hope that I will be able to do the same as you say and build on my existing bank.

I think the first thing that we forgot to do is how do we placed a stop loss.
If we don't know how to place a stop loss, you would not know how to make a profit.

If a stop loss is too closed, you might hit it.
If it is too far, it seems that you are waiting for it to hit the stop loss.

The fact is,
once you know what you are playing,
you would know how to play the 1:1 (risk:reward) or 1:3 (risk:reward) ratio, right?

Believe or not, not every trade returns 1:3. Therefore, try use your existing method and try on the history record. Draw a possible line across it, where is the possible stop loss, in order to get this profit.

By the way, do you believe that the forex pattern do repeat itself? If you believe it, try to match it with your strategy, this will greatly provide a higher chance of winning.

I do agree that "Don't trade, if you need to make money". This is the fact and the negatives.
So how do we translate it into?
"Do study and research, if you need to make money" or "Do the work well enough, and you may get the paid".

Keith

Thank you so much for starting this thread and getting me thinking.

I have had a light-bulb moment thinking about my statement "I am much better at analysis than at trading"
Its not true! The truth is that I am poor at trading because my analysis is incomplete.
Yesterday I was working through the AUD, CAD and NZD charts taking notes. I spotted several promising setups and started thinking of the positions I could take when the markets opened. This is typically what I do over the weekend in preparation for the next weeks trading. I realised that none of the setups was actually mature, i.e. there was only the possibility of a signal not an actual signal. I was anticipating the market and therefore likely to make poor trades.
This is something that I recognise from my past activities. Instead of waiting for the confirmation I jump in too early. Some work out and some don't.

Another step forward

Michael

Hi Michael,
You surprise me, I didn't think that you were one to jump in too early.
Like you, I study the charts over the weekend and put some pairs onto my watchlist. As you will know from my journal, many times I see developing trade set-ups that don't move the way that I anticipate and so never become actual trades.
I know that I'm not ready to become a full time trader yet as I do tend to get frustrated when a possible trade set-up fails to mature; or if a pair moves in the anticipated direction, but without quite meeting my criteria and then I kick myself.
Sometimes, when I cannot spot a trade set-up, I start to question whether I am being too cautious or not. This means that I am questioning my methods, again indication that I am not ready to move to the next level of trading.

Good luck

Keith

Hi Keith,

In one of my other articles I have explained about becoming a professional trader. That is not a new article and I think I have to revise it, but I think that it can still answer your question. Please take a look:
http://www.forexoma.com/when-you-will-b ... ex-trader/

Thanks Vahid, I don't understand why I hadn't read that article already. I thought that I had seen all of them.
It's interesting that you say that it takes about a year to become a professional trader. Obviously this is rule of thumb and will differ from person to person. I have been a subscriber to FLA for just over 6 months, it will be interesting to see how I have progressed when I have been a member for a year

I still haven't completed refining the strategy that suits me. Candlestick patterns to guage market mood is the basis, but I'm still learning and hopefully progressing at the same time.