Is It Possible To Make $100 to $200 Per Day From Trading
In today forex FAQ, we have a question from one of our fellow traders asking me to share with him some day trading and swing trading tips that
can tell him exactly when to enter and when to exit a trade so that he can make $100 to $200 per day.
Below is the question:
I am trying to make some money with Forex trading since several months. I have seen all kind of webinars and know a little about candle sticks.
I want to learn how to make some money with day trading or swing trading. It’s hard to get the right moments to enter and get out of the trades.
But that is a common problem I think.
It would be nice for me to make 100 – 200 USD a day when I start with a couple of thousand US dollar. Thanks in advance.
There is one thing I am very curious as there are a lot of traders who are interested to make money everyday but I have to tell you the truth as there is no way you can win every single day. I do not want to lie to you guys by telling you that you can definitely do it like what those advertisement claimed as this is not my style.
First of all, if you are serious about making money from trading, you have to first realize the fact that it is not possible to make profits from trading every single day. Being able to have the right mindset is the key to becoming a profitable trader.
What we trader aim for is to be profitable at the end of the month. Therefore we just have to make sure that we have more winning days than losing days and make sure that we use strategy with good risk reward ratio.
With good risk reward ratio, you are still profitable even when you have the equal number of winning and losing trades.
Some of you may have a good strategy on hand at the moment but because it can’t make you profits every single day, you decided to give it up once you had a losing day and started to learn other strategy. In fact, if you were to focus on that particular strategy, you will find that you are making profits at the end of the month. So stop hopping from one strategy to another if you have already taken a good forex course.
If you take a look at my Break The Bands Strategy Performance report, you can see that there are over 10 plus trades per month and how on earth can you make money everyday when there are only 10 plus trades per day if you were to use only one strategy.
Some of you may claimed that scalping strategy can do give you trades every single day but are you sure that it will give you more winning trades everyday?
Even a very professional scalper has some losing days as it is impossible to win every single day without fail as scalping trades usually have low risk reward ratio.
With one win and one loss, sometime you are still losing money if you are a scalper. So the key to making profits in trading every month is not about being able to trade everyday but being able to enter into more winning trades than losing trades.
At the beginning of my trading days, I was always looking to trade everyday but as years go by, I started to realize that my purpose of trading is to make money and not to trade everyday. As long as I can make more money, why do I bother to trade every single day. Isn’t it better to have lesser trading opportunities but making more money in the end.
That is why I emphasize a lot on risk reward ratio. Sometime you will find that you make more money trading a few days per month than trading several trades per day. Imagine you have a strategy that requires you to trade everyday for several time per day and you manage to make $200 per trade. Alternatively you have a strategy with high risk reward ratio but it has only several trades per month but you manage to make $6,000 per month with it.
So which do you prefer?
Personally I will go for the latter as it requires lesser time for me and give me more freedom to be with my family. The whole purpose of going into trading is to have more freedom and time and if I were to be stuck to the computer for long hours everyday, then isn’t it the same as working for others.
Next, with just a couple of thousand in your account, you can only be making a maximum of $2,000 assuming that you had $5,000 in your account. Some people thought that they can make several thousands a month with just $500 or $1,000 in their account. This is because they have seen forex advertisement that claimed to help people make $10,000 in a week but they did not tell you how much did that fellow have in his account.
For this matter, I will suggest that you read this post that I have written sometime ago.
Lastly for the trading tips, I will suggest that you only go for strategy that has a risk reward ratio of at least 1:2 and the strategy must have a clear cut entry and exit strategy. The entry of a strategy must come with a combination of events to trigger and you must never rely on just one indicator to trigger a trade.
In addition, your strategy must have some conditions to validate the trade setup. The purpose of those conditions is to help you reduce the number of losing trades. However I have to tell you that there is no way you can win 100% of the time. Even when the market is setup 100% according to your plan, it can still turn out to be a losing trade in the end.
That is why I emphasize a lot on risk reward ratio, with good risk reward ratio, you will still be profitable even if you had the same number of winning and losing trades.
You had a strategy with risk reward of 1:2 and you had 4 winning trades and 6 losing trades in the end.
Assuming that you lose $500 per trade and win $1,000 per trade based on 1:2 risk reward ratio.
Profit = 4 x $1,000 = $4,000
Loss = 6 x $500 = $3,000
In the end, you still make $1,000 with a strategy that produces more losses than wins. Now you see the power of risk reward ratio.
Imagine you had a strategy with 1:2 risk reward plus a 70% winning percentage, you can be making a decent income every month with it.
I hope that I have answered your question and do feel free to email me again if you have any problem.