A reasonable amount of trading equity is one of the best assets of any trader. To successfully engage in profitable forex trades, one of the determining factors is ‘the volume of equity’’. Equity is so important that it can influence the duration for which a trader holds his trades. When a trader has a two-figure equity (10 – 99 USD), trading is usually done conservatively. However, when the volume of equity is big, such can decide to hold profitable trades for as long as it can be. In this article, we will look at the roadmap to $100,000 in Forex Trading Profits.
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Table of Contents
What is Forex Equity?
Equity is simply the amount of money a trader makes or loses in a trading transaction. When an open position is in profit, the trading equity increases above the balance and when, in a loss, it decreases below the balance.
Furthermore, having an equity of over $100,000 is a great feat in forex trading. That is because globally, it has been observed through statistical reports that very few traders fund their accounts above $1,000. To further buttress this point, many retail traders in third-world countries do not have a trading equity of $100 in their forex accounts. Among other factors, the main reason for this is due to the high economic wave which has influenced the exchange rate between the currencies of these countries. That is why a very good trader may not have the required amount of money to fund his account due to the high exchange rate gap.
Due to the significance of equity in trading, this article will guide trader on how to train themselves and grow their trading equity via the forex trading profits method that will be shared in this article.
The Forex Trading Profits Roadmap
Step 1: Have A trading Plan
Making profits is an essential characteristic that differentiates two traders. While a losing trader may feel like someone is monitoring his account, a profitable trader feels like he can always do better. How do I know? Because I have been on both sides of the trading game. From being a losing trader to a consistently profitable one.
Thus, one way to make good forex trading profits is to have a solid trading plan. As the name implies, a trading plan is simply an organized and written course of action to which a trader adheres. It explains the future of any trading system or trader. In ideal reality, a trader’s plan is simply a picture of what shall be. Without a trading plan, a trader is most likely going to make blunders as regards his trading limits, dos and don’ts.
A trading plan comprises a trading day, the risk-to-reward ratio, the trading lot, potential target and drawdowns and trading conditions. By following the sample trading plan in this article, a trader can have a glimpse into how he/she can make $100,000 in forex trading profits
Step 2: Set a time limit
A time limit is simply a proposed dateline for the accomplishment of a particular objective, aim or goal. In trading, setting a time limit is so important because it helps you to define your trading expectations. In addition, it also helps you to determine the outcome of your time on the chart.
Considering our trading plan, the time limit for the achievement of $100,000 is a period of three (3) months. This goes to say that the potential monetary worth of any forex trader that sticks to the plan is $100,000 within the next 90 days.
Knowing this will fuel up discipline and commitment to the achievement of this goal. In all, always remember that how far you go in life depends on you and not on time or anyone else. So, whatever you make out of your time depends totally on you.
Step 3: Determine your trading strategy
While seeking for means to achieve your goal, avoid jumping from one strategy to another. Just like nothing comes out of a vacuum, nothing sustainable comes out of an undefined trader. You cannot be an all-round trader. Simply find out what works for you and stick to it.
There are many trading strategies in forex trading. However, my most preferred is price action trading. This is because, it gives me the leverage to be very analytical and objective in trading decisions. Conversely, as much as this works for me, I do not oversimplify the role of indicators in trading. That is because, they are confirmation avenues to what price action does and forecasts.
Staying with a particular strategy helps you to trade within your zone. It also helps you to know what works and doesn’t apply to your trading style. So, determining the trading style helps you to stay more focused on the three months task.
In addition, learn to customize your trading style to fit into your plans. This is where many traders miss it. While two traders can be price action gurus, one can chose to customize or tweak certain trading principles or patterns and charts to suit a desired outcome. Like I often say, find out what is working for you and stick to it. No two traders’ trades exactly the same way even when they are using the same trading protocol. Therefore, customize your strategy to work for you. If you fail, blame no one.
Step 4: Determine the risk-to-reward ratio to abide with
Following the trading plan, our pre-determined risk to reward is a 1:3 on a minimum. This means that for every one dollar invested in the trade, it is expected that an outcome of three dollar should be achieved. Furthermore, the trader may not necessarily take more than two trades per day if he/she sticks to the plan.
While leveraging on progressive lot sizes and trading times, one should know that it will take discipline to stay committed to this plan due to varying market forces like long-term trends, friendly suggestions, signals from other trusted sources, YouTube video suggestions etcetera. Nonetheless, staying focus on this plan will help you to know that you will spend a shorter amount of trading time on the chart. As much as losses abound, one should be able to follow through judiciously with this plan.
Step 5: Discipline yourself to stick to a trading time regime
During the early days of my trading adventure, one of the fundamental lessons I learnt from my teacher is to have a trading regime. Discipline yourself to invest time in the charts. This might mean you staying with the charts from 8am to 2pm or even more. No matter the duration of time you desire to invest in the charts, factor it into an everyday routine.
This is how consistency in habit and profit are developed. As much as forex trading profits of $100,000 is the goal, this will be achieved on a daily accumulation of your trading successes. Therefore, be very committed to the trading regime you set for yourself.
Step 6: Close losing trades early and learn how to hold winning trades
The ability to close trades early is an inevitable skill in forex trading. Like I mentioned in one of my articles, closing losing trades does not mean that you are a bad trader. It shows that you are good enough to know that price is sending a message. Losses and winners are trading signals that come with following or mis-following price movements.
One of the best signs to know a good trader is by quick detection of price movement. A good trader knows when price is in his favour or against him. For that reason, it is a very bad disposition to be angry with yourself for making bad trades because you can close them within your predetermined Stop losses. However, it is worth being angry to lose accounts because you decided to trade by hope (seeing traders hold onto losing trades with the hope that price will obey them. But at the end, they end up in bigger losses).
What makes difference is your ability to avoid that sentence, ‘’it will go my way’’ but rather close the trade and re-analyse the market. Conversely, this follows suit with winning trades. When a trader finds that his analysis confirms with the current trend, one should learn to leverage on it and grow. When trades are in a win, learn to hold them. If possible, add to the winners
Trading is very exciting if you know these things. So, instead of going against the trading plan risk to reward ratio (1:3), decide to stick to it. Do not say that one dollar loss is too small. Always remember that accumulative losses lead to revenge trading and the possible reason for many traders to lose their accounts. By doing so, you grow your mastery, control your emotions and secure your profits.
Step 7: Filter your trades
You do not have to take every opportunity the market presents to you. If you do not understand what the market is doing stay away from it. It will save your emotional health and your trading account balance. So, take trades that obey your trading rules and risk to reward ratios
Step 8: Allow your profits to compound
What this simply means is, do not withdraw the profits. To do this, you can either have a side hustle or open two trading accounts. This will go a long way to solve so many problems and relieve you from unnecessary tension and pressure. Thus, to achieve this goal of $100,000 in forex trading profits, allow the profits to compound.
Step 9: Celebrate your big and small wins
Do not allow bad trading days to make you feel like you are never going to achieve the goal. Remember, more than 70% of people reading this article may not make up to $100,000. Some may make 50% while others may make 30% of it. Some may make even more than that. All of it depends on various factors that may interfere with time.
What I am saying here is that life can make you feel you are in a competition or like the time is not there. The truth is that, even as millions will read this article, no one is competing with you. It is a personal race. When you make the $100,000, it will be your success, not our success. So, see it as a personal task and avoid the haste, competition or pride.
So, for every success step you make in this journey, remember to be grateful and celebrate yourself. It will help you to keep the hopes high. Above all, avoid pride.
Final Thoughts on The Forex Trading Profits Roadmap
It’s important to note that making 100,000 USD trading forex is a significant challenge, and it may take considerable time, effort, and risk management to achieve this goal. It’s essential to start with a smaller capital, gain experience, and gradually increase your trading size as you become more proficient. Additionally, seek guidance from experienced traders or mentors, and always prioritize risk management over potential profits.
If this publication has been helpful to you and you desire to know more about what to takes to be successful in trading, kindly do the following.
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Risk Disclaimer
Deriv offers complex derivatives, such as options and contracts for difference (“CFDs”). These products may not be suitable for all clients, and trading them puts you at risk. Please make sure that you understand the following risks before trading Deriv products: a) you may lose some or all of the money you invest in the trade, b) if your trade involves currency conversion, exchange rates will affect your profit and loss. You should never trade with borrowed money or with money that you cannot afford to lose.