How To Turn $1000 Into $2.6 Million In 30 Months With Just 15 Pips A Day (Forex Trading Success Stories)
I had yet another email today from a new member of my mentor group who is blowing up forex accounts due to bad management and unrealistic goals. He was 30%+ in profit in a week and then lost the lot by the end of it!
Unfortunately its not an unusual story and I think that the marketers who pitch the “make $10.000 a day” nonsense are partly to blame for these unrealistic targets that folks try to achieve in a matter of weeks.
If you really want to succeed at forex or any type of trading then the first thing most novice traders need to do is change their expectations.
The secret to becoming a successful trader?
Small, consistent gains. That’s it!
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Consider your current investments. If you have money in a savings account in a bank you will be fortunate if you are earning 2 or 3% PER YEAR!
Similarly many hedge and pension funds run by professional traders with tons of experience fail to make more than a few % per annum in correct markets so why do novice traders armed with a few weeks or months of trading time believe they can thrash the markets?
If you can make just a few $’s a day on a a $1000 account, by compounding your stake and therefore your results you CAN turn that initial stake into mega bucks in a just a few short years, but not weeks nor months! The difficulty is its boring! To trade all week and make $50 is not going to pay the rent BUT it WILL give you the opportunity over a couple of years.
If you can make profits consistently using correct money management rules THEN you have the opportunity to add capital to your account and even trade for others over the longer term. I know a guy who makes a $Million per year whose daily target is just 5 pips! How does he do it? He trades a multi million $ account for other people. If you have at least 12 months proof of performance then you may have the opportunity to trade for others. That is the minimum period of time I look at when considering folks to trade for me & is fairly standard in the industry. I then follow folks on a live account to make sure that there are no bad practises such as moving stops etc.
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Try this on your kids:
“If you do all your chores & homework this month I will pay you megabucks. You have two choices. I can give you $10.000 now or I will give you 1 cent today, 2 cents tomorrow, 4 cents the day after, 8 cents the day after etc until the end of the month. In other words the amount doubles every day until the end of the month. Which would you prefer?” It’s a no brainer right. I’ll take the $10.000 please!
WRONG ANSWER. If you take the 2nd option your 1 cent doubling per day will be worth $10.737.000 after 31 days. Thats right, over $10 million !!
Get a calculator and do the maths to prove it to yourself/kids.
What you will find is that after;
10 days you will only have $5.12
20 days it starts to get interesting $5242.88
28 days amazingly we hit our 1st $million $1,342,177.28
31 days an incredible $10 MILLION $ 10,737,418.24
Make The Magic of Compounding work for you.
Please don’t write to me saying that “this means we will be staking over $1000 a pip by month 26,” I know that. Yes of course you will have losses along the way, but all we are looking for here is a net gain of 75 pips per week! What is important here is to get your mind around the FACT that if you look for small, consistent gains in a controlled and disciplined manner you CAN get seriously rich at forex if you learn to take your time. By being patient and disciplined. By making a plan and sticking to it.
How to Turn $1000 into $2.6 Million in 30 Months With Just 15 Pips a Day
One cent per day doubled turns in to more than $10 Million in 31 days!
The following example is based on taking $1000 to a $million from trading forex or any commodity for that matter.
In truth the stakes & winnings in the 1st few months would be so small that most of us would be bored rigid. But it is key to becoming a successful trader. Lets face it if you have $1000 in the bank at the moment you might be able to earn $15 interest for the year !
What if we could successfully make just 15 pips/$15 a day in forex & reinvest the profits? The initial calculation is based on risking 5% on $1000. The next day you will be risking an amount based on $1015 and so on. Therefore as time goes on and you are hopefully winning, your stake increases slightly per pip and so do your winnings. Its important to adjust your risk on every trade based on your current account balance, especially if you are losing.
Most novice traders tend to still think of an account as being a $1000 one when there is say only $500 left in it. THAT is why so many blow up accounts.
Day 1: 1000
Day 2: 1015
Day 7: 1105*
*By day 8 our daily stake has increased to $1.10 per pip = $16.50. We are now gaining $1.10 per pip. By the end of the 1st month we would be looking at an account balance of approx
Day 13: 1204*
Day 20: 1330**
*By day 13 we are investing $1.20 per pip x 15 = $18
**Month 2’s (20 trading days) stake will be $13.30 per month & so on. This is 33% return in 1 month. This is what attracts the big boys to forex. If you carry the sum forward, the 1st 6/8 months show steady rapid growth. Then compounding kicks in & the growth is phenomenal. If you can maintain 15 pips a day for just over 2 years your reward is multi millions.
Lets say we carry on with the chart, but only increase our stake at the end of the month which is the correct way to do this. Therefore month 2 our 15 pips a day x 1.33 x 20 (trading days a month) =
End Month 2: $1729
End month 3: $2245
End Month 4: $2918
End Month 5: $3791
End month 6: $4928
End Month 12: $23.784
End month 24: $554.093
End Month 27 $1.217 Million. Then it starts to get really scary !!!!
Month 30: $2.674.499
Now I know that realistically we would reduce our stakes as the value of our account gets larger (personally I reduced my risk to 3% at $10.000 and then 2.5% at $50.000 BUT the important fact here is that mathematically this principal is correct. The only thing that screws this up is human emotion. Fear and greed after all rule forex. There you have it. Change your expectations. Be realistic. Concentrate on winning a little and often and big profits could be yours in just a few short years. How many other industries give you that opportunity?
I can not count the number of people who I have met who started to become successful only for impatience to spoil their dreams. Many folks fail at forex simply because they don’t put in enough time and effort before throwing say $1000 into an account and promptly losing most of it BUT there is another group who start to do well. Some become over- confident and fail but a bigger group in my experience start to take too big a risk (due to boredom), lose money and quit when in actual fact many of them were on a few feet from gold!
What do you think? We have all experienced compound interest working against us in the form of mortgages, loans and credit card bills, do you have any experience of compounding working for you? Please feel free to add your comments below.
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