Blue Print

Before you indulge yourself to the limitless possibilities awaiting you in forex trading, it is far more important that you know how to get your share in this five trillion dollar a day market.

It is easy to set a goal of earning your first million dollar from forex trading in the next three months or a year and don't get me wrong it can really motivates you to strive to be better each day until you reach your set goals but somehow along the process particularly if your goal is set too high it will backfire on you. You suddenly feel that your set goal is not possible, that everything is all a too good to be true and full of BS.

How do you avoid this at the onset of your forex trading? This is very critical to anyone success in forex trading. And frankly it does not require so much of analysis and time because it is a straight forward number analysis. I got this snippet from an article in DayTradingForexLive.com, this guys plays a vital role in my forex trading success. Visit them to learn more.

....from DayTradingForexLive.com

In this real life example we are going to assume you are trading with a $5,000 account. You can do the math on your own for the size of the account you will eventually open once you have at least 3 months of profitable demo trading. For now we will use 5K as it is a good average that retail traders deposit.

Example #1

1 trade per day X 22 trading days in an average month = 22 trades per month

At 50/50 win/loss 11 trades will lose you 2% each, and 11 trades will make you 4% each (Reward/Risk is 2/1)  = Total Monthly Profit Of 22%

Now let’s see how 22% a month compounds over the course of a year on a $5,000 account.

Jan                   Feb                  Mar                  Apr                  May                 Jun

$6,100             $7,442             $9,079             $11,076           $13,513           $16,486

Jul                    Aug                 Sep                  Oct                  Nov                 Dec

$20,113           $24,538           $29,937           $36,523           $44,558           $54,361

Example #2

1 trade per day X 22 trading days in an average month = 22 trades per month

At 50/50 win/loss 11 trades will lose you 2% each, and 11 trades will make you 3% each (Reward/Risk is 1.5/1)  = Total Monthly Profit Of 11%

Jan                   Feb                  Mar                  Apr                  May                 Jun

$5,550             $6,160             $6,838             $7,590             $8,425             $9,352

Jul                    Aug                 Sep                   Oct                 Nov                 Dec

$10,380           $11,522           $12,790           $14,196           $15,758           $17,492

In the first example there was nearly an 11 fold increase in your trading account over the course of 12 months. In the second example the only thing we changed was the Reward to Risk, which we lowered to 1.5 to 1. In this example winning only 50% of the time and only going for 1.5 times your initial risk you would have roughly a +350% gain on your account after 12 months. You can do this; you simply need to readjust your thinking.            ....end of excerpt from DayTradingForexLive.com

The give away in this exercise is the risk reward ratio (2/1 or 1.5/1) combine with the winning trade percentage. Setting a 50% winning trade percentage is highly achievable rather than a 70% to 80% winning trade percentage which makes it more motivating day in and day out.

Now Set your forex trading profit goal using this exercise and you're surely be on your way to successful forex trading for a living.