If you are reading this article, you should have read the previous one. I encourage you to read it before you continue with this one. Well, if you are done with the first part of the article then let’s continue!!
By now, you have a basic money management strategy to beat the market. As said before, the best way to learn is trading every day, but you still have some important questions to be answered.
How much can I earn?
Needless to say how much you earn depends only on you. You can win whether the stock market goes up or down. When someone sells, someone buys, so for each winner we have a loser. No one can predict the future, there is nothing written. However, I can give you a couple of clues.
First of all, if you are new to Forex you will not win a cent for the first 4 months. Some transactions will be profitable but overall you will not win. Remember that you are learning, so use low capital accounts and save money for the future, where you can do a serious trading account.
If you get a 10% annual return you must be very happy with your work, this is a 1% every month with 2 holiday months. It will be great a 10% return to start, isn’t it?
What else should I consider?
You have to consider that this is not a sprint; this is a long term battle where you need to survive every day. As said before doing 1% each month is a great result. That means 0,05% every day, that’s ridiculous! As you can see, you do not need big waves to be rich; you only need a very strong trading strategy with money management.
Try to win 0,1% per day. Use the calculator given before and see how much pips do you need to earn that 0,1%, maybe 10 pips each day? Try to get it using a tight stop loss and never lose big amounts.
If someone talks about warrants, futures, options, just run! No matter what they say, these are very dangerous products and you can lose a lot trading them. Remember, Run!
You are learning, you need markets such Forex with high liquidity and easy access. Stock markets are also Ok if you use CFD’s, but be careful.
Intraday trading is great, but it is more difficult than daily trading. You should start with some basic long term strategy. You have posts about price action in this blog; you can check it to learn how to understand what is happening in the market.
If you trade every day in Demo you will start to win soon. You only need to be methodic and use money management.