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How to Get Rich Through Forex Trading
How to Get Rich Through Forex Trading
Let’s repeat the question: How to get rich through forex trading?
Is there a magic formula?
Is it even possible?
We know you have a lot of questions…
Let’s answer them now.
The disclaimer: How to get rich through forex trading
Before we begin…
The journey you’re on isn’t for the fainthearted.
It has dashed the hopes of many.
And even sent traders into financial ruin…
The reason for their downfall is simple: A misinformed approach to forex trading.
Most retail forex traders lose money
It’s no secret that most forex traders fail.
Indeed, while you can make life-changing amounts of money through forex trading, it isn’t a get-rich-quick scheme and should never be treated as such.
Forget what the guy with the Ferrari told you on YouTube!
Forget about becoming a multimillionaire overnight using forex signals.
Mind you, we’re not against using forex signals.
But save that post for later.
Let’s talk about something more important right now.
How to get rich through forex trading!
Before we share our forex trading secrets, you need to know why most forex traders lose money. Indeed, if you don’t know why most forex traders lose money, you will be destined to repeat the same old mistakes!
Failure breeds success: How to get rich through forex trading
So why do you think most forex traders fail?
It’s not a secret.
Indeed, most forex traders approach the markets the wrong way…or don’t learn how to approach the markets in the first place.
If you have ever been on Reddit, you will see forex traders trying to figure things out themselves…or ask other traders (who don’t make any money themselves) for advice.
But it’s also a waste of time.
Mind you, lots of unsuccessful forex traders make this mistake.
Why did it take so long?
That’s no easy question to answer.
But suffice to say, we taught ourselves trading the most inefficient way possible! When you try to learn by yourself, it’s easy to go down lots of rabbit holes that lead to nothing. We often experienced a case of analysis paralysis!
Indeed, we tried to learn everything about everything.
That led to learning everything about nothing.
Unfortunately, most traders do the same thing as us – fall trap to inefficient learning.
So how did we succeed?
We learnt from our mistakes and didn’t give up.
Most importantly, we learnt how to limit our losses in the markets!
When most people lose money in the markets, they lose everything and give up.
Mark our words: It’s inevitable you will lose in the markets.
But how do you deal with it?
That’s the question.
If you don’t learn how to lose at the start, you’re destined to fail at forex trading.
Forex trading statistics
Indeed, as we’ve made clear, most forex traders lose money.
The funny thing is that brokers don’t hide this fact.
Just check the homepage of your favourite broker.
You’ll find a statement that says a particular percentage of all retail forex traders lose money.
This figure will be above 80% in many cases!
Yes, you read that right.
Four out of five traders fail!
The message is clear: If you approach forex trading the same way as everyone else, you will be part of the 80%.
So how do you be part of the other 20%?
There’s no secret sauce.
In saying that, we do share some forex trading secrets in our free forex course. Also, in terms of how to get rich through forex trading, there are some famous forex traders who you can learn from as well.
Of course, as you will see below, these forex traders didn’t get rich because of luck.
How to get rich through forex trading: Paul Tudor Jones
Paul Tudor Jones is a classic example of how to get rich through forex trading.
He was born in 1954 and is a multibillionaire.
Paul Tudor Jones is famous for being a macro trader and ‘a slave to the tape’. He follows a contrarian approach, and strives to enter and exit positions at major turning points. That means, if everyone is buying, Paul Tudor Jones is probably selling and vice versa.
Paul Tudor Jones famously said about risk-reward,
“I’m looking for 5:1 risk/reward. Five to one means I’m risking one dollar to make five. What five to one does is allow you to have a hit ratio of 20%. I can actually be a complete imbecile. I can be wrong 80% of the time, and I’m still not going to lose.”
The message is: Contrarian traders look to win big over a series of months – not days or weeks. Some of our biggest wins have been contrarian trades, as you might have picked up on in our free forex course.
Paul Tudor Jones – digging deeper
Paul Tudor Jones also famously said about risk management,
“My metric for everything I look at is the 200-day moving average of closing prices. I’ve seen too many things go to zero, stocks and commodities. The whole trick in investing is: “How do I keep from losing everything?” If you use the 200-day moving average rule, then you get out. You play defence, and you get out. … One principle for sure would be get out of anything that falls below the 200-day moving average.”
That’s good advice if you’re thinking of becoming a contrarian trader.
Contrarian traders can make a killing in the forex markets, as you can see. Paul Tudor Jones – and multiple other traders – have proven the strategy works. But, at the end of the day, there’s a million ways to make a million bucks.
How to get rich through forex trading: Bruce Kovner
Take Bruce Kovner, for example.
You may not have heard his name before!
Originally a taxi driver, Bruce Kovner is a multibillionaire and – surprisingly – he didn’t make his first trade until he was 32! So if you think you’re too old to build a successful forex trading career, think again!
Kovner bought soybeans futures contracts by borrowing $4k on his credit card.
The trade netted him a $23k profit!
That might sound impressive, turning $4k into $23k. On one hand, it shows you really don’t need much capital to start trading forex, which we explain here. On the other hand, Kovner ran the position up to $45,000 before losing most of his profit!
Bruce Kovner said about the experience,
“I had a huge gain but lost half before getting out, losing half the profit in an hour. I closed out the trade and was physically sick for a week. In retrospect that was a very good thing. It helped me understand risk and create structures to control risk.”
Indeed, risk management is the most important element of forex trading. Risk management may sound straightforward. But in reality, it’s hard to stay disciplined and stick to your forex trading edge (as you may know, we explain how to build a forex trading edge in our free forex course).
Nevertheless, Bruce Kovner eventually founded Caxton Alternative Management and built it into one of the world’s most successful hedge funds over a 28-year period! Caxton Alternative Management traded mostly commodities and currencies.
Bruce Kovner – digging deeper
So how did Bruce Kovner profit in the forex markets?
He combined fundamental and technical analysis. We read that he likes to buy new highs in fundamentally attractive markets. That said, like Paul Tudor Jones, Bruce Kovner knows where to exit the trade before getting into it.
Bruce Kovner said:
“On any given day, I could lose millions of dollars. If you personalize these losses, you can’t trade. I never had a lot of difficulty with the process of losing money, as long as losses were the outcome of sound trading techniques.”
It’s no secret that you can lose money in the forex markets. But, as we said earlier, you need to learn how to lose before you learn how to win!
How to get rich through forex trading: George Soros
George Soros knows exactly that and needs no introduction…
You may know him as the man who broke the Bank of England.
In 1992, seeing something the market wasn’t, Soros put $10 billion on the line and shorted the British pound.
That bet earned him $1 billion in just one day.
Not bad for a day’s work!
Indeed, George Soros is a famous trader and another multibillionaire, although he doesn’t always win. His biggest loss was probably his bet on the Russian economy in 1998. The loss was devastating and cost the billionaire $2 billion.
George Soros went ‘short’ small-caps index ETF puts after the 2016 US presidential election result. He thought that Donald Trump would crash the economy. Unfortunately for him, he was wrong and those puts became worthless due to the increase in market prices.
Like him or loathe him, George Soros is an excellent trader – you don’t become a billionaire by being lucky. He shares the secret to his success in this famous quote:
“I’m only rich because I know when I’m wrong…I basically have survived by recognizing my mistakes. It’s not whether you’re right or wrong, but how much money you make when you’re right and how much you lose when you’re wrong.”
It’s clear: Solid risk management is the key to successful forex trading.
Your ‘Start With Forex’ Takeaway: How to get rich through forex trading
The question of the day is: How to get rich through forex trading?
The first step is to get educated.
A good place to start is by reading our free forex trading course. You then need to have the correct mindset to trade forex and the right amount of capital.
How many times have you heard the following phrase?
‘It’s all in the mind…’
Well, it’s true.
Successful forex trading starts with you and no one gets rich overnight.
Your ‘Start With Forex’ Takeaway: It’s everyone’s dream to start with a small account and build it up to millions. While this can happen, it takes hard work. So you should focus on learning how to trade forex before buying and selling forex with a live account.
So make sure you’re trading with a good-sized forex trading account.
If you want to learn how to trade forex like a professional, start by reading our FREE forex course. Remember, there’s a million ways to make a million bucks in the forex markets. So if you want a head start in forex trading, alongside our free course, check out our approved products page for forex trading signals and systems to help kick start your trading.
To your trading success,
Start With Forex
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