this is the Forex Q&A podcast this is VP your host professional Forex prop trader
with a brand new podcast every single Monday answering user submitted
questions now if you wanna submit a question you may do so and whether or
not it makes the show I will still answer it to the best of my ability you
just go to nononsenseforex.com hit the ask VP tab and fill the little form
and I will get back to you as soon as I possibly can with the most honest and
direct answer I can possibly give well a lot of people don't like my answers but
I don't care if you like my answers the answer that I will give you is likely
not the answer you're going to find on the internet right now most advice
you're going to find on Twitter and on YouTube is not only not going to help
you it's probably gonna end up hurting you in the end
you need an honest and direct approach straight from an actual professional and
that is what this free podcast gives you every single Monday and this episode is
a really good example of what I just talked about so many websites YouTube
videos Twitter handles love to do nothing more but blow smoke directly up
your asshole with this question and I want to address it right now again fair
warning most of you traders out there especially the ones who are just
starting out are going to hate this answer it's a very sobering answer to a
very common question I get but again stick with the podcasts listen to it all
the way to the end because as usual I always offer somewhat of a silver lining
a way out if you would if the initial answer to my question is not what you
wanted to hear but I have a feeling this one's gonna sting a bit let's go ahead
and get to it Sean from Boca Raton Florida asks how much money do I need if
I want to trade Forex professionally now please don't get me wrong I love it when
you guys send me questions but a lot of them are quite vague or have some type
of ambiguous nature to it and this one is no exception
first I want to get this out of the way when you say professionally this is the
most loosely tossed around term out there when people try to qualify
themselves in terms of how they trade Forex by definition trading
professionally just means you're trading real money regardless of how big or
small that is so be very careful going forward when
you hear anybody say I'm a pro Forex trader I trade Forex professionally
because all that could mean and they're not lying when they say it is I don't
trade a demo account anymore I trade a real account that doesn't mean they're
good at it that doesn't mean they're living off the money they're making that
doesn't mean that somebody hired them to trade on their behalf it just means they
trade a real money account so if that is what you're asking and I doubt that's
what you're asking Shawn but if if that's the question you really had I
think the answer is usually depending on your broker 500 USD some might even go
lower than that to start but usually five hundreds the minimum if I recall
keep in mind there only so many brokerage platforms available to us here
in the United States you know globally you know you have a lot more options and
some of those might go as low as 50 to $100 who knows you don't really need
that much and this is great news to a lot of starting out forex traders
because you usually don't start out with a lot of money especially if you're in
your 20s you typically don't have that much money to throw around especially
money you just can't afford to lose right away but if you were anything like
me when I started out you probably made this critical mistake stop me if you've
heard this one you went somewhere online to learn about forex and how to trade it
you learn how to read a chart which you didn't know how to do before but turned
out to be easier than you thought and you learned all the cool little tools
you can add to it to be able to predict better which way price is going to go
and lo and behold every example they showed you whether it was a trend line
or Fibonacci or the RSI indicator in the examples they would show you worked like
a charm worked perfectly made a bunch of pips called a trend or a reversal just
at the right time and you thought to yourself hot shit look at that all I
have to do is use one of these tools or a combination of the tools that they're
showing me right now apply it to my own trading and the sky's the limit really
and you're telling me the do to leverage I can get $50 for every $1 I put in the
market or if I'm outside of the United States I can - I can do even better I
could have $100, $200 for every one dollar I put in the market
well this changes everything it's just a matter of time before I turn this $500
into Millions I mean think about it just you just have
to put this trend line on a chart wait for it to bounce off it and just do that
over and over again and I figured we you know two three years from now I can quit
my job in two years three years time this $500 can easily be six figures I
might as well go ahead and just put a down payment on a new car right now it's
only a matter of time really and then you go pick your platform you go set
your little account up and what happens that little system you put together that
little method with the trend line and the indicator and the Bollinger Bands
work sometimes didn't work all the time only worked about half the time and
that's just not enough because your money management skills were never
developed and the combination of those two things is a very bad combination and
then there's that one trade that just wipes you out because you went short
price went long and instead of abandoning the loss which you should
have done you figured it was just a matter of time before that stochastic
oscillator just started to finally make its way back upward and everything was
going to be all right but it didn't and now your money's gone now if this
example hits a little too close to home understand that I'm not making fun of
you I'm making fun of myself because this is exactly what happened to me
three times over and I don't want that to happen to you some people can't
afford to blow out three trading accounts and some people will get their
money blown out one time and quit for me I don't know what it was either I really
felt like I had something and I just persevered on probably coupled with the
fact that didn't want to wait tables anymore and there's such a desperation
there at the time but I kept going and it worked out but I realize how rare
that is and even though maybe that's the best thing that can happen to you
in terms of your overall growth is to really really get crushed once twice
maybe more I want to put you in a better position than that to start I don't want
you thinking that that five hundred one thousand dollar deposit is going to make
any kind of dent in your overall state of well-being
thanks to Forex it's just not enough you should deposit it and trade it because
you need to get used to trading real money
after you've demoed for a while because especially emotionally the two things
are very very different you need to get over that emotional hump just understand
that you're not going to turn that initial deposit into anything
significant and those websites out there that say that you can make 20 pips 50
pips 100 pips a day guaranteed are completely full of shit all of them I
can promise you this anybody who's put some real time in and
has traded this market can tell you that market conditions don't always
allow for this amount of pips to be made that's how we know they're lying now
rather than go off on a tangent about these scammers online that promise
things and don't deliver let me go ahead and answer the question well how much
money do you need to trade professionally and again if you hate
this answer stick around I hope I'm going to give you a way out but the real
answer is a lot you need a lot of money to be able to pull a good enough return
to actually live off of what you make trading Forex so let me let me give you
a very sobering example let's say you have $100,000 in your savings account
that you don't need and you could legitimately afford to lose so first up
I think that puts you in the top 2% of all earners in the United States and I
think globally that definitely puts you in the top 1% very very few people out
there have that luxury but let's just say you're one of those people alright
let's let's play make-believe let's pretend now in forex for an entire year
what is a good rate of return well any type of investing listen at the stock
market for example I think average is what 11 percent every year and and
that's excellent fortunes have been made just putting money into the stock market
and then just doing nothing for 40 years because of all that compound interest
over time now if you can beat eleven percent that's really good
and that's not something a new trader is going to be able to accomplish that that
takes some time to get to that level there are rich people in New York City
that give their financial advisor tens of thousands of dollars sometimes
more just to eke out 13-14 percent return year after year to them that is
certainly worth the money that is upper-echelon
rarefied air type stuff but let's say they you even go beyond that let's say
you are now like the Warren Buffett level who does 20 21 % right about every
year give or take on average let's just say you could pull it to 20% return in
spot forex year after year in a $100,000 account that is a profit of $20,000
before tax now is that living comfortably to you is that the lifestyle
you're looking for as a professional trader it better be because that's all
you're getting because if if you spend that $20,000 you make now you have no
chance to earn compound interest you've taken that out of the equation you're
just living off of what you make on a $100,000 account making an extraordinary
20 percent return a year after all those stars lined up just perfectly you're
making a few thousand dollars over the poverty line just think about that not
what you wanted to hear was it well there is another way and this way
involves a lot less money out of your pocket you can take the route I took I
didn't have a hundred thousand dollars in my bank account I don't have anywhere
near that I waited tables and I bought my condo in 2007 which was the dumbest
time to buy and so needless to say I didn't have a ton of disposable income
just laying around at the time but I learned that there are people out there
and there are companies that will give me money to trade on their behalf
provided that I'm really good at what I do and I can prove consistent results
over time so step one is get really good at forex trading put a system together
that works and fine-tune it and perfect it get good at dealing with losses get
good at dealing with wins and be able to hammer out really good consistent
results year after year because you're gonna need at least a year's worth of
performance to show these people and this can be on demo account this can be
in a very small trading account as long as you show a really solid percentage
and consist results over an extended period of time
you can get companies to look at you but they will also have their own tests for
you you will also have to be able to trade in a what is it kind of a
probationary period where you will have to show them in real time how you do so
if you fudged your numbers in any way or you can't perform under pressure you're
going to get exposed but if you are legit and you have a really good system
in place and you know how to trade it there are prop firms out there there are
hedge funds out there they would like to have you you have to be legitimately
good because even if they hire you you have to maintain that level of
profitability over time and that in itself is very hard to do I'm proud of
the fact that I've been with my prop firm since 2014 and I'm still standing
and I'm still doing well that really separates the actual professionals from
the pretenders so overall the good news is yes you can
trade professionally with very little money you just have to be good at what
you do and you have to be able to prove it and there is no better place to learn
how to do that then right here on the Forex Q&A podcast on nononsenseforex
com and on the no nonsense forex YouTube channel I didn't have that blunt honest
person telling me what I was doing right and wrong that's why it took me three
blown-out trading accounts in five years just to even get looked at by somebody
you now have that strength in your corner but only if you want it and if
you do subscribe to this podcast subscribe to my youtube channel and make
sure nononsenseforex.com is the one place you go when you're looking for
real forex trading advice that you can actually use and that won't lead you
down the wrong path like everything else does believe me I went down that path
it sucked it was horrible over 99% of all traders go down that path and they
get nowhere you now have an opportunity to do much better than they do in a much
shorter amount of time but it will not be overnight if you're all about quick
money and instant gratification I have nothing to say to you this podcast is
for people who want to get there the right way in a way that makes them
sustainably profitable now if you feel like I delivered on this podcast I gave
you an answer that nobody else gives you and whether you liked it or not learn
something as a result give me a like on iTunes like I said
you subscribe it means a lot the podcast is just starting out and I honestly
don't care if I get a ton of subscribers on anything I do I just hope those of
you who took the time to seek this out and those of you who decided to ditch
all that stupid conventional wisdom and join up on my team and line up with my
way of thinking I want to make your forex trading dreams come true just like
mine did if over time I can amass a small group of just absolute killers
I've done my job so we're gonna keep this train rolling and we're gonna start
getting a little more technical a little more advanced questions as we go forward
I have a couple more basic questions I think I want to get out of the way but
then we're really gonna start to sharpen those edges so get excited traders you
should be excited but we have so much more to uncover and every time we do
it's gonna get you that much closer that much closer to becoming the Forex trader
you've always wanted to be I will see you in episode 6 and until then go out
there and get it