In forex trading, it is generally not possible to predict how much money one can earn on a day, a week, a month or even a year. The financial markets are far from being predictable and, therefore, trading opportunities and profits also. If your trading strategy is of the trend-following, or if it focuses on the trading range, the number of trading opportunities may be more or less important depending on the state of the markets. You may very well have 10 to 20 trades per month to practicing the swing trading when the markets that you are dealing oscillate in range and we get more than 30 if they are changing in trend. Then is it still necessary that these operations result in part on a profit.
That is what is meant by risking$ 10 a trade ?
If one follows the instructions provided in the training of trading, the risk is 1% to 2% of his capital per trade, not more. Let’s suppose that you risk 2% of our capital on a trade,$ 10 of risk means that one has a capital of$ 500.
Predict how to win money is difficult
Whether trading short -, medium-or long-term, and define its advantage in advance is very difficult and not advisable as you will understand, however, we can know more or less how much we will earn per trade. If we practice the scalping or day trading, we will usually have trades in which the risk-reward ratio is 1 or 2, that is to say, the potential profit is equivalent or equal to the risk taken on the trade. In this case, if we risk$ 10 per trade you will win 10$ or 20$ profit per trade as a function of its takeprofit and its strategy. Traders who have risk reward ratio was highest in those who engage in swing trading, generally their risk reward ratio is higher than 2, they can sometimes reach 3, 4 or even 10 times the risk taken as a function of various parameters, as well as having a risk of$ 10 per trade a swingtrader will usually be able to make 20$ to 50$ profit on a trade a winner, sometimes much more, note, however, that in swing trading the number of opportunities is generally less important than the styles of trading in the short term.
Start trading with a capital of$ 500 ?
Started his career trading by opening a trading account with a forex broker and depositing the sum of$ 500 allows you to risk$ 10 per trade if one has a trading strategy and a money management strong and this provides opportunities for a return on investment interesting. Of course, we can risk less than$ 500, you can very well start with $ 200 of capital at eToro and risk up to 5€ per trade, for example.
Let’s assume that you have$ 500, that our risk reward ratio is 2:1 by practicing day trading a few hours per day or swing trading, that are executed 10 transactions in the month and that 70% of them are winning, this gives us a total profit of ($20 x 10 x 0.7) 140$ which represents 28% compared to the starting capital of$ 500 ! A trader who does this can double several times in a row its starting capital, and eventually decide to reduce the risk to 1% or even 0,5% when it reaches four or five digits, for example, in order to trade more calmly and with less pressure (because a risk of 0.5%, that is a leeway of 200 trades !).