Can I make a living trading Forex?
It’s a question I get asked by people a lot , and to be honest with you, the short answer to that is no, you can’t, but the long answer to that is you can in time. And a great living at that!
The short answer is no, You can’t make a living trading Forex.
When you start learning to trade and you start trading, do not expect to start making money on it.
But what you can do is you can build wealth. FROM DAY 1….
You can build wealth.
The best approach to take with the trading is to use it as an arrow in your quiver to building wealth over a specified period of time. (Watch the Video 19 mins)
Then over time you can start making a living out of it.
Now, here’s why you can’t make a living out of trading – it’s because trading is 80 plus percent mindset.
If you need to make money to survive, to pay your rent, pay your mortgage, you insurances, children’s school fees, and so on, it’s going to be putting you under a tremendous amount of pressure.
So when you have a losing trade, and another losing trade, or you don’t get your target after one month, what does that going to do to your mindset for the second month? Then you get another losing trade, and then you risk falling into a spiral.
Because trading is 80 plus percent mindset … It is IMPERATIVE that you remain confident and certain at all times!
So when we say 80% is mindset, 20% is the actual act of trading. The placing of trades.
But to be honest… the reality is that it is actually more than 80% mindset, because even the 20 of the actual act of trading is also driven by your mindset.
So where does that boundary start and end between mindset and the actual act of trading?
My view…. is that in actual fact…. 100% is MINDSET…
But for the purposes of explanation and differentiation let’s keep it 80/20 – 80 being sensory and stems from inside yourself (I go into to a very deep level in our Wealth Program) and 20 being tactile.
If you’ve got any pressure or stress, anxiety at all when it comes to trading, you are most likely going to make mistakes and you’re going to be taking decisions based out of fear, anxiety rather than in a state of calm, confident and certainty, which is the state we need to be in in order to trade successfully
From my experience it is the MISTAKES that people make the stops them from being profitable every month.
What I suggest in the Tribe of Traders, with our clients is to be very clear on the financial number that you want to achieve – because at the end of the day it’s all about building wealth.
When you build wealth – have a base of financial security – then you can start looking at ways on how you can make a living from trading – but FIRST get financially secure first! We will go into that in much more detail later…
The question is – what wealth are you going for?
A lot of people get into trading with a fantasy that they’ll make 5 million, 10 million, 15 million, a billion, even.
Yeah, that’s all possible, but hold on a second.
Where are you now?
Are you only just making it through month end at the moment?
Okay, so let’s get real, right?
Let’s get real about our trading, and if you want to get into trading, being real about your expectations.
That is the MOST IMPORTANT starting point…
Distraction alert…. What do you get if you cross a sorceress with a millionaire? A very witch person. (Credit: upjoke.com)
Start with baby steps.
Okay?
Understand what your financial situation is right now and why do you want to trade and what is the goal for your trading?
First of all, do not get into trading, expecting to make a living at it.
Get into trading to build wealth.
Be realistic about what that wealth is.
So many people don’t understand that the difference between financial security, financial independence, and financial freedom.
They’re very different.
Financial security, meaning that you get your basic needs met every single month, right?
You have enough at the end of the month to cover all of your expenses.
But what is financial security really about?
Financial security is about not having to exchange time for money.
It’s knowing that no matter what you did this month, at the end of the month, you’re going to get enough to cover all of your expenses.
So many people overestimate how much they actually need in order to be financially secure.
A lot of people feel that financial security is like light years away from where they are right now.
That’s because most people don’t understand where they’re at financially.
If you’re getting into trading and you don’t know what your goal is for getting into trading, what you want to get out of trading or why you want to try it and what your goal is for trading –
You are going to be spiraling and one of the ways in which you can stop that is understand where you’re at right now because so few people know where they are at financially.
Where are you financially?
What are your financial obligations?
What are your financial aspirations? Okay, be clear about that.
Then what is it that’s going to give you financial security?
Most people do not know – because they are scared of it…
Most people WORRY about money… and mostly it is the WORRY that keeps people trapped!
As Mark Twain said –
“I’ve had a lot of worries in my life, most of which never happened.”
So your first step is to STOP the worry… CLARITY is EMPOWERING – CERTAINTY is EMPOWERING
How much do you need every month or every year or over a period of five years, 10 years in order for you to be financially secure.
You’ll be surprised at how little that money is, how little that amount is.
I have doen this exercise many times with many people.
I’ve spoken to a lot of traders and about their requirements in a month and it could be anything from £3,000, £5,000, £4,000, £10,000, or equally dollars…
How much do you need per month?
How much do you need over the year, and how much would you love to earn in your trading – over a period of how many years do you want to achieve that number and how many years Financial Security will that give you?
Now, in the Tribe of Traders I suggest people go on a five year journey and set a target that will give them financial security in five years.
Imagine if you have financial security for a number of years with all your basic needs met, what will that do for your mindset?
It’ll give you the opportunity to embark on a life to living fullest expression of your imagination.
It frees you up tremendously, and that is the gift that trading will give you.
Don’t get into trading, wanting, hoping or desiring to make a living out of trading.
Get into trading to build wealth.
Let it be one of the arrows in your quiver to build wealth, and understand what it is that wealth means to you.
What is that number? and why?
In the Tribe of Traders we have a program that we go through with our clients that explores what that number is for you.
It is a process that is unique for everyone, the program unlocks the vision you have for your life. Your goals and purpose in life, it explores your spiritual as well as material requirements that will allow you to life to the fullest expression of your potential.
We then break it down to finding out what your target for your trading?
Because remember in the world of building wealth, trading is just one arrow in your quiver.
What is your expectation for trading and what is your target?
How long is that target going to take you?
Then you focus on that. From there you reverse engineer how you trade and what your trading objectives are.
From there you decide on the best strategy to use to get you to your target in – five years!
Too many traders get into trading, having a fantasy of the multi millions that they’re going to make in no time at all.
That impacts mindset for so many reasons.
One of them being that so many people have a low, what I call wealth thermometer.
A low setting on their wealth thermometer because a lot of people are operating in fear, scarcity and guilt and shame.
There’s a lot of people who live on that level of vibration, and in order to get out of that, in order to get out of that low level of vibration, you’re going to need to build your self worth and knocking down the layers of un supportive beliefs.
You’re going to need to start building more about self belief, self esteem, and that … because your wealth comes from inside. Your wealth comes from inside. It does not … You could be a rocket scientist and still be broke.
It’s not about what you do to build wealth.
It’s about how you are to build wealth.
It’s what’s inside.
It’s the same with trading.
Trading for me is the gift that keeps on giving because it’s a reflection of what’s going on inside of me.
It’s a reflection of the issues that I have in life.
That is the beauty of trading.
It is the gift that keeps on giving, and and I think that is something that we underestimate as traders.
Typically traders who are in a spiral with their trading and struggling with success in their trading, they tend to blame the strategy, the market or their training.
They tend to blame everything else except what’s going on inside of themselves.
When you start blaming the strategy or the market, you start jumping from one silver bullet to the next silver bullet, the next shiny object to the next shiny object.
And all that does…… is increase the chaos in your life and trading.
When you stop that and you start looking inside of yourself and start looking at, what’s going on for me?
When you start having that inquiry, then so much starts changing because trading is only 20% of the actual act of trading, 80% of successful trading is in the mindset.
One of the things I say to our guys is –
‘If you are in a spiral, if you are losing trades, if you are not reaching your target, there are three questions you need to ask yourself.
- Is it me?
- Is it the market?
- or is that the strategy?’
Now, nine times out of 10 it will not be the strategy.
There are plenty of profitable strategies out there. Plenty.
There’s no shortage of profitable strategies.
It is not difficult to make money out of trading because successful trading is not about simply placing trades.
It’s about trading in a certain way.
If it’s not the strategy … If you’ve back tested the strategy or if you trust the strategy is profitable and others are making money with the strategy, and if you are honest you will be able to see it is not the strategy…
It’s definitely not the market because the market does what the market does.
It’s going to always continue doing what it does. It’s going to be the same as it was yesterday, last week, last month, last year, as it will be next year and 10 years and 50 years from now. The market is ALWAYS right!
The other common denominator will be you!
What is it that you are doing differently?
What are you doing to impact your results in the market with the strategy?
See what I’m saying?
It’s a different inquiry to have and once you start taking that level of responsibility for your trading, the more realistic that you can see that your target is, the more you can tweak your mindset to be appropriate to be successful for your trading.
Which will be massively beneficial to you not only in your trading but other wealth building pursuits you may have, and in fact – all areas of your life, from vocational, mental, relationships and even spiritual.
Hence trading is the gift that keeps on giving!
The first thing is – be clear about the number that you want to achieve and how you are going to get that in your trading.
That’s the first thing.
When I say how are you going to get it, what strategy you’re going to use?
How are you going to trade?
When are you going to trade?
How often are you going to trade?
What’s your risk profile in your trading?
All of those things need to be ironed out.
Be very clear about every single aspect of your trading, and apply that diligently and consistently.
Now if you have not traded before, don’t worry, if you learn to trade with us – we take you through that process before you even LOOK at charts!
Remember, it’s the small things done consistently over time that has the greatest impact for your trading, but it’s those small things that are the hardest to sustain …
They have the biggest affect when done over time – consistently… and these small things are the easy things to stop doing, because you don’t see the impact.
That is why it is VITAL to have your mindset right and have a crystal clear vision of what you want to achieve.
Many traders have an issue with sustaining the small consistent acts because the law of compounding takes time to show impact or results and a lot of traders struggle with time horizon not only in trading but also in life.
But slowly over time, like the Magic Penny, it just incrementally starts growing, and the more you consistently do the small things over time, the more consistently your account will grow until the point it just literally explodes.
Just like the Magic Penny.
I’m sure you’ve heard about the Magic Penny?
It’s the same thing with out actions.
It’s the same thing with our trading, but it’s the small things done over time that because they’re small we tend to give up on them.
There’s a lot of traders who don’t understand the fundamental laws and rules of of compounding.
It is a very important aspect if you want to get into trading, or if you are trading, really, really get to grips and understand what compounding is all about.
As Einstein said,
‘It’s the eighth wonder of the world.
He who understands it earns it, he who doesn’t pays it’
And that’s not just financially, that’s in all areas of life as well.
Whether you want to study to be an engineer, whether you want to be an Olympic sports person, that doesn’t matter what it is..
It’s the small things done consistently over time that compounds and has the greatest impact.
If you want to be an international rower or an Olympic rower, gold medalist rower, you might say, Well, I’ll miss training today. It won’t matter. I’ll miss training tomorrow. It won’t matter. I’ll miss training next week, and then miss another day and another day and over time that compounds, and that will make a difference between you being the gold medalist or not. It’s the same with trading.
Be clear about your goal.
Be clear about why it is you’re trading, what it is you want to get out of trading and focus on the end game.
Don’t focus on your last trade today or your one great win today or your great win yesterday, and bring that into your next trade and your next trade.
Extend your time horizon, I will go into that later…
Think about the longer term.
Think about the goal.
Every decision you make needs to be focused on your end goal, your end game.
That’s vital – be focused on the end game.
It’s not only about what you’re going to do here and now.
It’s about what you’re going to do here and now what you’re going to do tomorrow, and what you’re going to do the next day and the next day and the next day over the period of time until you reach your goal.
Small things done consistently over time has the biggest impact.
That applies equally to your broker account, as well as to the actions that you take daily to growing your account.
If you’re tempted today as you’re placing a trade and you’re breaking one of your rules (for example) –
Ask yourself, ‘Is this the small thing going to get you to where you want to be in five years or not’
Or if you’re going to place a hope trade or you’ve just lost a trade, you’re going to hop back in and try and get back at the market and do revenge trading – Is that the act that’s going to get you to where you want to be in five years?
Again it is MINDSET that will STOP you from revenge trading or hope trading.
That is why we focus heavily on mindset before any of our clients even looks at a chart when they learn to trade with us.
For all of these reasons it is advisable not to get into trading ‘to make a living’ but to rather use it to build wealth.
But we all have a Wealth Thermometer. We all have a wealth ceiling. I’ve known a guy who was making ridiculous amounts of money on trading, but he hit his wealth ceiling and he started sabotaging because it’s all about mindset.
Your journey is as much about placing trades as it is about working on your mindset.
The first thing for you to do when you’re in trading, if you want to get into trading or you are a trader – what is the number you want to achieve and in what is the time frame and WHY?
Reverse engineer it.
What does that mean per month?
What is your target?
Remember, have rules and ask yourself three questions.
When you start losing or in a losing spiral.
Is it me?
Is it the market?
Is that the strategy?
Nine times out of 10 you’re going to find that it’s you, and take responsibility.
Identify what is it about you that’s creating this…
Is it your beliefs? (we’ll go into this later as well)
Is it lack of clarity about why it is you’re trading?
Most of the time it’ll be your beliefs around money.
It’ll be your beliefs about wealth because when you’re trading, you’re trading money, and money is one of the most emotive topics that we have in society because money directly reflects on our self worth.
Getting into trading is as much about building wealth as it is about building your self worth.
