Use Forex To Reduce Your Debt And Gain Financial Independence

This article will show you the steps that you can take to safely become a professional forex trader. It is not a get-rich-quick scheme or other such thing. This technique requires you to apply yourself and be dedicated to being successful. The steps are outlined below. It is assumed that you have no trading experience. However, seasoned traders can benefit from this article as well.

Step 1: Learn to trade.

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Step 2: Practice on a demo account.

Once you obtain a sufficient amount of knowledge, it is time to open an demo account and learn to use the trading platform software. Practice placing market orders and closing them manually. Practice setting stop-loss and take-profit on open orders to lock in profit or prevent losses. Practice placing pending orders (orders that get filled at a future price). Make sure you feel comfortable setting the correct trade size before sending your order. This is one of the most common mistakes that people make. They place an order of 5.0 lots, for example, rather than 0.5 lots and end up depleting their account quickly. Be sure to use the demo account strictly for mastering your strategy and platform, and not to simulate live trading.

Step 3: Try a live account with a small amount of money.

There is a big difference between watching a live trade on a demo account and watching the same order on a live account. Your emotions play a big role in live trading with actual money. The only way to learn to control those emotions and stay focused is by ACTUALLY TRADING WITH LIVE MONEY. Trading too much on a demo account may de-sensitize you and cause you to take unnecessary risks when you move on to a live account.

Many brokers will let you open an account with as little as $250, with trade sizes as small as 0.01 standard lots (micro lots). That means each pip will make or lose you about $0.10, as opposed to $10 per pip for a standard lot. Even though it is a small amount of money, you will still feel the emotional bombardment that comes with watching your money increase and decrease during trading. It is of utmost importance that you get control of those emotions before you get to the next step.

When you can earn at least $10 per month for 3 consecutive months, trading ONLY micro lots (where 1 pip=$0.10), then it is time to move on to the next step.

Step 4: Bring your account up to $2000 with a second deposit.

With $2000 in your account and trading just mini lots (where 1 lot=$1.00), you should now be able to earn at least $100 per month profit trading forex.

Step 5: Grow your account to an amount that will let you live off the profits from trading.

Now you have enough experience trading the forex markets that you can live entirely off forex if only your account had enough money in it. So let’s figure out how much is needed to accomplish that…

Suppose you need to earn $4000 per month to make ends meet. You already know that you need $2000 in your account to generate $100 per month. So that means you will need as much as $80000 in your account to generate $4000 monthly. I know it sounds discouraging when you look at it that way, so you need to look at it differently.

Each time your account balance grows by $2000, your trade size needs to increase by 0.1 lots. It will take you as much as 20 months to earn your first $2000 profit. But once that occurs, your trade size increases to 0.2 lots and getting your second $2000 will only take 10 months. Now your trade size increases to 0.3 lots and reaching your third $2000 will take 7 months. At this rate it will take you about 8 years to build your account to $80000. That’s by earning just $100 per month for every $2000 in your account. Approximately 5% of your initial deposit. Suppose you can earn $150 for every $2000, or 7.5%. You have just cut your time down to 5 years! In fact, if you continue earning 7.5% until the 8th year, your account will reach over $467000! But that’s not the point for now.

What we have done is determine the longest time it will take for your account to grow from $2000 to (as an example) $80000 so that you can quit working a job and withdraw $4000 per month from your forex account to live on. And in case you haven’t noticed, the faster you can increase your trade size, the faster you will reach your target. So let’s look at some ways to speed things up…

1. Earn more than $100 for every $2000 per month. Your account will grow faster and your trade size will increase sooner. Don’t go crazy with this because the more you trade the more you put yourself at risk of losing. But it’s not unreasonable to be able to generate $200 monthly for every $2000 in your account. I know people who regularly earn between 30% and 100% per month trading forex. But the goal for you is regular reliable profits. So let’s stick to 5% as a minimum.

2. Deposit additional money into your account each month as you can afford it. This will cause your account to grow faster, especially the first two years. For example, by depositing an extra $100 each month from the beginning, your account will double in 10 months instead of 20.

3. Use a larger initial deposit. Let’s say you deposit $4000 instead of the original $2000. You have just cut nearly 2 years off the time it takes to reach $80000. A $6000 deposit will cut nearly 3 years off. However, as the deposit amount goes up beyond that, the time to reach your target is not impacted nearly as much as the lesser amounts. For example, it takes 21 months to get from $2000 to $4000, but only takes 7 months to get from $6000 to $8000.

The nice thing about this approach is that as time passes, your trading skills improve and soon you will be so good at earning money in forex that you’ll be able to do 5% without breaking a sweat.

Step 6: Free up your time by using a trading robot or signal service.

This step is optional but if done correctly can free up most of the time that you spend trading. A good forex signal software will tell you when it places a trade so that you can check it and see if the trade is a good one. Ideally, your robot will only place no more than 3 trades daily, which means you don’t need to spend alot of your time looking at the trades it places.

The important thing when using a robot is to select one that you have a good understanding of *why* it places the trades it does. You should know how to plot whatever indicators the robot uses and see immediately if a trade placed is a good one or not. Remember, you spent alot of time becoming an expert trader. The robot is simply a tool to make your life easier, not to replace you.

A signal service is similar to a robot but it does not trade for you. Instead, it notifies you when a trade should be placed and gives you the information you need to place that trade. Again, it should be used to free up your time so you are not at the computer all day looking at charts. By this point, your trading should be good enough to tell if a particular signal service is worth using or not. It doesn’t have to perform as well as you, but if it can’t help you earn your 5% minimum, then it is not worth using.

Financial Independence

Ok, so you’ve quit your employment and you are a career forex trader. But you are not financially independent yet. What gives? Well, now you are ready for an explanation…

Suppose you have reached your goal and your forex trading is earning you at least $4000 monthly (as an example). Don’t leave your job just yet. Instead, withdraw $4000 from your forex account each month and apply it towards your home loan, cars, credit cards and any other debt you might have. In a very short time you will have no debt. Congratulations you are financially independent! You can retire from your job, and you don’t have to earn near as much money each month due to the fact that all your debt is paid off! So now, rather than requiring $4000 monthly to live on, you only need maybe $2000. This enables you to easily save money for travel, savings, investments, or anything else you were unable to do in the past.

Summary

Well, now you have everything you need to get out of debt and become financially independent. I hope you take this seriously and use it to change your life for the better.

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Use Forex To Reduce Your Debt And Gain Financial Independence

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