How can I earn $ 60 per day

Earning Money With Trading - Myth Or Reality?

Many traders struggle with consistently making profits in trading. This article deals with the question of whether it is actually possible to make sustained profits while trading without losses and answers the question: As Kcan you make money trading?

One of the first steps is to adapt your own trading style and the trading strategy to be used to your own personality, risk tolerance and the means available to the trader. All Trading strategies should always be tested in a demo account firstin order to be able to assess their effectiveness in the context of the individual character of the trader. It should also not be ignored that historical performance does not always reliably represent future results of a strategy.

In addition, the trader has to work on his mentality in order to be able to consistently follow his trading strategy. This topic is more important than many traders realize, so we put a lot of emphasis on this point in this article. A lack of discipline often leads to a total loss of deposits and drives many traders to give up hope of being able to make money with Forex & CFD trading.

The prerequisites to be able to make money with trading

Over $ 6 trillion is traded daily in the Forex market alone. In view of this sum, the conclusion that some market participants must be able to make money with Forex and CFD trading is obvious. Otherwise the market would no longer exist. You should therefore not ask yourself whether you can make money with trading, but rather how you can best trade profitably on the Forex market.

As with any other type of investment, Forex and CFD trading involves risks. The potentially high profits are offset by an equally high risk. As a result, it is very important to know how to reduce this risk in order to cushion potential losses. Sometimes it happens that you let yourself be influenced by other traders who are successful but still not really trade effectively.

To learn trading from the ground up, you must first understand how markets work and the factors that are important to trading successfully. As with many other activities, it is important to practice daily in trading. To do this, you should look for a broker who has a wide range of free educational opportunities. At Admiral Markets you can attend 15 live webinars per week free of charge, where the latest developments in the most popular financial instruments are regularly discussed. To register for a webinar right away, simply click on the following banner:

What you need to make money trading

In general, it is a good approach to trade as if it were your own business. In doing so, you would not invest in the first idea that was proposed to you. You would be far more likely to consider several options, knowing the famous George Buchanan quote: "A fool and his money are soon parted." (In German: a fool and his money are quickly divided.)

In addition, when it comes to running a company, it is not advisable to allow sudden events to influence you. Rather, you need to plan, set goals, review progress, and create budgets. The same principles should apply to your trading. They can be summarized in the following three properties:

Commitment, focus and determination

The American businessman Donald Kendall formulated a beautiful motto: "The only place where success comes before work is in the dictionary." If you search the internet for the question of whether there is money to be made in trading, you will soon come across fantastic stories from people who are said to have become millionaires in a short period of time. Their intent is clear: they want to bait you.

In fact, there are people who made $ 10 million on Wall Street or some other exchange in a year. What such stories tend to miss, however, is the fact that such traders tend to be managing billions of dollars. The $ 10 million earned makes up less than one percent of the total account balance in such cases. If you were to transfer this to an account with a deposit of EUR 1,000, this would mean a profitability of EUR 10 per year.

Most stories block out such facts - sometimes on purpose, so that gullible people get the wrong idea. For example, the one that it is easy to make a living from trading forex. But that is far from the case. We therefore always recommend opening a demo account before starting live trading. This allows you to try out strategies, techniques, and time frames without risking your money.

The millions in prizes described above do exist, but they are very rare. To be convinced of this, all you have to do is ask yourself how many traders there are publicly reporting their profits. There are exceptions here too, but around 90% of large traders do not publish their results because most of the time they are not very good.

Reality check

Most traders assume that all it takes is good money management and the right strategy to make money in the financial market. But very few of them really get there. There can be several reasons for this. For example, it takes constant practice and training to be successful.

If you invest too much money at the beginning because you can afford it, high losses could result. Therefore, here is a reality check: The monthly profitability of a professional trader is usually only 1%, the best come to 2-3%. You should use this number as a guide when answering the question of whether it is possible to make a living from trading. Always remember that if you don't put in enough work, you will never achieve your profitability goals.

In the following section, we will now formulate 10 tips that you should keep in mind if you want to make money with trading.

Earning Money Trading: 10 Important Tips

If you follow the tips below, you will be more likely to trade successfully in the financial market. However, even this guide is not a guarantee of future success. Every trader must pay attention to his own needs and habits when putting together a plan and a strategy.

1. Expectation management

First and foremost, one should say goodbye to unrealistic goals and targets - for example, the idea of ​​making a lot of money with a few trades. It leads to taking too much risk and quickly losing your initial investment. This often happens with beginners who only follow the price development of an underlying for a very short time and hope to benefit from it.

Setting high profit targets creates unnecessary pressure that can lead to one of the greatest dangers in trading: overtrading. We will go into this again separately at a later point. So instead of setting unrealistic expectations, focus on developing a trading strategy and understanding the financial instruments and indicators available to you.

2. Risk profile

The following applies to every market: do not trade there if the dynamics do not suit you. Before you start any real trading, you should understand the basic aspects of the market. Please note the following:

  1. Invest only the money you can afford to lose.
  2. In order not to take too high a risk, we recommend not using more than 20% of your total investment at once.
  3. Define your risk profile: Are you a moderate, aggressive or conservative trader?
  4. Prepare for losses: If you are ready to remain active in the market even after a series of losing trades, currency trading is for you.

3. Trading strategy

Many traders only look at profit, which can result in significant losses. In order to be able to make money trading, you have to learn not to chase the seemingly easy profits. So, a good place to start is by setting realistic goals. The idea of ​​being able to earn a lot of money in Forex & CFD trading in a very short time and with a few simple steps is attractive, but also very unlikely and clouds your view of the essentials.

Trading too quickly and confidently can quickly cost you your entire first deposit. Intraday beginners in particular often suffer from initial overconfidence, which leads their trading strategy in the wrong direction with the prospect of quick profits.

Be careful not to become part of these statistics at some point!

Many long-term successful traders swear by a seemingly contradicting principle: "In order to be able to make money with CFDs and Forex, you have to stop thinking about profit". By setting profit targets too high, the trader puts himself under pressure, which can lead to one of the most serious mistakes - so-called overtrading, also known as "overtrading". You can find detailed information on this topic in the following section.

Rather than focusing on the enticing profits, beginners should focus on learning how to work CFD and Forex strategies and researching which additional tools are best for them. You shouldn't forget to familiarize yourself with the peculiarities of the markets. Different markets react differently to certain events in the economy.

The most important point to take away from this article: never stop learning! Markets are always changing, and if you want to keep making money from Forex or CFD trading, you need to adapt your trading to these changes.

4. Emotions

The following may sound surprising, but it is an important lesson: Emotions are a trader's worst enemy. Some traders see their trading activity as a type of game that is about beating the market. If you fail to do this, you can quickly be overwhelmed by your emotions.

That is why we advise you never to see trading as a game. Trading is an interesting and sometimes exciting activity that requires great discipline and good analytical skills. Feelings, doubts and worries shouldn't play a role. Of course, however, we know that these elements can never be eliminated entirely.

Even so, you should always try to follow the rules that make trading successful: understanding how financial markets work, trusting your own analysis, and following the rules set out. Emotions are always in the way. If you can put them aside, you will be one step closer to success.

If a large loss makes you sad or angry, stop trading for the day. If you are very happy and excited about a high profit, do without further trading activities for the following hours and instead enjoy your success. Overconfidence is just as dangerous as anger in the stomach.

5. Stop Loss and Take Profit

Regardless of your trading strategy, you should always trade with a stop loss. With a stop loss order you can determine the price at which your trade should be automatically closed. This is to limit potential losses right from the start.

However, it can happen that a price is particularly volatile, which can mean that the stop loss is not triggered at the previously determined level, but only at the next possible level. This phenomenon is known as slippage.

In addition to the stop loss, the take profit is the most frequently used order in trading. This instrument also allows the trader to automatically close a position when a predetermined price level is reached. This order is placed in the opposite direction of the stop loss. This means that profits can be secured before the price may develop in the negative direction again.

6. News and information

If you want to make money trading, it is essential to keep abreast of the latest news and events. After their announcement, there are often significant market movements. The assessment of such announcements is called fundamental analysis.

Even if you are a technical analysis enthusiast, you shouldn't ignore news events. For example, if you have a reliable trading strategy and several technical indicators that point to a long trade, you should still consult our economic calendar to find out if your order is in line with upcoming events. A technical strategy can always be influenced by fundamental news.

7. Overtrading

"Overtrading" is a synonym for chasing the market and making lots of quick trades - this is an enormously dangerous and mostly damaging behavior. In overtrading, the trader does not see opportunities to enter the market because they actually exist, but because he wishes them to be. Many traders are so fixated on the idea of ​​trying to make money trading that they are often unaware of this wishful thinking until significant losses are incurred.

A distinction is made between two types of overtrading - too many trades or too large trades. Let us first consider the former.

In his speech entitled "How to stay out of debt", Warren Buffet uses a baseball metaphor to discipline investing:

'' You have to wait for the ideal throw before swinging your club because investing will not take away any points for missed opportunities. In baseball, you also have to hit at balls that you don't necessarily like. In business, however, you don't have to hit anything if you don't want to.

You can just wait and see ... and if you don't like the prices, you don't have to go back to them every day. Because if you miss a good trade, you will not be penalized for it. You can just wait for that once a month if you like the course and if you know exactly what you are doing. That's exactly when you take off. And you will only need a few strokes. ''

The same principle can be applied to Forex and CFD trading and has not lost its relevance to this day. The bottom line is that the trader is not forced to make a lot of trades - what matters is that they are heading in the right direction. If you are trading in a live account, you should already have a carefully considered trading strategy that you have tested and trusted. Just follow your strategy. Do not trade if this is against your plan.

The other version of overtrading refers to too large to trade. There are certainly representatives of the view that the lever contributes to this. Many Forex & CFD brokers offer significant leverage settings, which multiply possible profits, but also potential losses.

The idea of ​​the lever was originally to enable traders to make meaningful profits even with low stakes, so that the markets are also accessible to private and hobby traders. In practice, however, beginners are often blinded by the temptation to be able to make money quickly and continuously from trading, and instead end up with quick losses.

The devil is in the details.

A high trading leverage is not necessarily a bad thing. It allows traders to trade larger volumes. With a higher volume, every pip price movement means more profit or loss.

However, it is the trader's choice of whether he wants to handle very large trade sizes and thus make his account more susceptible to margin call situations. For the trader who understands and respects him, leverage is a great help.

The lesson you should take away from this is

  1. Know and understand the risks before trading
  2. Avoid overtrading and always test new trading strategies in a risk-free demo account.

8. Losses

How do successful traders in the Forex and CFD market only generate profits? To make it clear: not at all. Without exception all Closing positive trades is not possible and therefore a myth.

The opening question of this article: '' Can you really make money with trading? '' Can only be viewed in the long term. Some professional intraday traders manage to be profitable on average on a daily basis, but even these veterans have regular losing trades.

It is not easy for a bad loser in the Forex and CFD market. Even seasoned traders with decades of experience allow themselves success rates of 40% and less, some even below 20%.

The trick of a good CFD and Forex strategy is that the profitable trades more than make up for the losses of the less successful trades with their profits. This is not uncommon in long-term, trend-oriented trading. It takes a lot of mental strength to admit your own miscalculations and to close losing trades before they generate too much loss.

On the other hand, it takes a similar willpower not to close winning trades immediately, but to let them continue to run into profit. Patience is an important virtue in Forex and CFD trading.

9. Trading plan

So far we've talked a lot about the discipline required for trading successfully, but little about organization. It is essential to develop a trading routine. You need a trading plan that will cover the majority of your trading activities, which will keep coincidences to a minimum.

Many novice traders develop bad habits. In some cases, they get positive results due to luck or chance, which may exacerbate the negative habits. This can lead to a downright vicious circle. It is therefore important to stay away from habits as much as possible and instead follow your trading plan.

10. Broker

The best and cheapest online broker is not the one where you can make more money in the short term. The best broker is the one who has answers to the following questions:

  • Is the broker regulated by a recognized authority?
  • Are my account deposits 100% safe at all times?
  • Is there a reliable customer service in my language?
  • Does the broker offer beginners a comprehensive, free educational offer?
  • Does the broker have the fastest and most reliable trading platform?

Making money trading: final

The answer to the question of how you can make money with trading is basically very simple: buy low and sell high - or vice versa. However, if that were the only aspect to consider, no one would wonder whether it is profitable to invest in the financial market.

The reality is that most traders lose money. There is no golden rule for doing well in the markets. Because many beginners still believe in it, they sometimes fall for fraudulent brokers who supposedly sell them surefire trading signals. Signals can be successful in the short term, but only the factors mentioned in this article will win over the long term.

Here, too, a simple rule of thumb applies: to be successful, you have to make more winning trades than losing trades. This usually depends on your trading plan, strategies, and the risk you are willing to take. Trading CFDs is done on margin, which means that you only have to deposit a fraction of the amount with which you are trading in the market. This trading leverage can multiply your profits, but also your losses.

So we repeat again: To make money trading requires a high level of discipline and strategy. You should always try to stay focused and not let your emotions guide you. You will gain a lot of experience working on your trading strategy. The best way to do this is to use our free demo account, with which you can trade completely risk-free in a realistic market environment.

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This material does not constitute and should not be construed as investment advice, recommendation, or solicitation of any kind of transaction in any financial instrument. Please be aware that articles like this are not reliable predictions of current or future developments, as circumstances can change at any time. Before making any type of investment, you should consult an independent financial advisor to make sure you have the existing one Risks be able to understand and assess correctly.

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