Wanting to earn money in the financial markets is understandable and this is what every day traders try to do forex. Before you want to make money, you have to learn not to lose, and once you have reached the threshold of profitability, you do not want to have unrealistic expectations or you risk unwary risks to achieve Its objectives and suffer consequent losses in the event of a poor prognosis.
Example of unrealistic expectation
If you have a capital of € 250 on your trading account at a forex broker such as eToro or Tradeo, and your objective is to make your capital grow at € 1,000 after a Week, then this is an unrealistic expectation. Some traders will succeed (luckily or not), but how many? 1 out of 100? Less? You can not double your capital in a day or you take unwise risks to achieve it, just as you can not usually win 1,000 € in a week with an initial investment of 250 € or less.
Example of realistic expectation
Generally speaking, traders in trading courses are advised not to risk more than 1% to 2%. If we take the previous example of a trader with a capital of 250 €, then a trader should not risk more than 5 € per trade. The expectations and objectives of the trader must therefore be equal to the risk taken. If he has a risk reward ratio of 1: 1, then risk 5 € is a profit target per trade will be 5 €, if he has a risk reward ratio of 2: 1, his target gain will be 10 € for a risk of € 5. Let's say that the trader achieves 10 winning trades per week (in RRR 1: 1) then he will earn 50 €, which represents 20% of his capital of 250 €. A performance of 20% per week is already enormous, but much more acceptable and achievable than a performance of 300% (from a pass of account of 250 € to 1,000 €).
Aim for profits over the long term
As a forex and investor trader, it is important to aim to be profitable regularly, certainly, but also and especially in the long term. Even with the risk of only 1% of its capital (or even less) per operation, it is possible to considerably multiply the size of a capital, by the tens or hundreds in the long term. For example, by applying the compound interest method, the more the capital increases, the more the size of the positions is increased accordingly, which makes it possible to evolve its capital fairly rapidly as one trades and, The winning trades are accumulated.
Choosing a Regulated Broker
Anyway, turning a small trading account into a big account is possible but one has to be realistic and it also means that it is important to speculate on the financial markets through an authorized broker. Choosing a regulated broker like eToro, Tradeo or Plus500 is absolutely necessary, this helps protect its capital, avoid the risk of financial scams that are found especially with some offshore forex brokers. In addition, choosing a forex broker listed on our website allows you to benefit from the Forexagone Guarantee, an additional security not negligible as a serious trader.