I will add $800 as an equity amount in 1 Month
I will make $1 .....................in (1/$800) Month
I will make $62,500.............in (1/$800) x $62,500 Months = 78.125 Months
Let's convert it to year.
12 Months make 1 Year
1 Month makes (1/12) Year
78.125 Months make (1/12) x 78.125 Years = 6.5 Years.
So, do you have the patience to build this equity amount ONLY in 78 months or 6 and half years?
Alternatively, you can start with much bigger principal investment.
No wonder more than 95% of the trader fail to obtain fulltime forex trader status because of the following reasons...
- They are under capitalized.
- They are over exposed to the risk.
- They lack experience.
- They lack education.
- and finally they lack the patience to build buffer amount and equity amount.
If you plan to build equity amount of $62,500 so you can become fulltime forex trader under 1 year. This way you can work out plan to make about $10,000 per month and comfortably withdraw $5000 monthly.
How much initial principal investment do you need?
We need to build buffer amount of $62,500 from our unknown principal investment under 1 year (=12 Months).
In 1 Year (= 12 Months) I need to build buffer amount of $62,500
In 1 Month (=4 Weeks) ..............................$62,500/12 = $5,208.333
In 1 week (=5 trading days).........................($5208.333/4) = $1302.08
In 1 trading day ...................................($1302.08/5) = $260.42
Let's check back...
= $260.42 x 5
= $1302.1 x 4
= $5,208.4 x 12
= $62,500.8
So in order to become fulltime forex trader I need to make $260.42 per day as a buffer amount. How much do I need as a seed money?
At the rate of 20 PIPs per trade per day, I need to trade 1 Regular lot and 3 mini lots at any given time.
For a regular 1 lot trade, 1 PIP pays me $10
...........................20 PIPs ......20 x $10 = $200
For a mini 1 lot trade, 1 PIP pays me $1
...........1 lot trade, 20 PIPs pays me 20 x $1 = $20
...........3 lots trade, 20 PIPs pays me 20 x 3 x $1 = $60
Therefore, Total Gain is...
= $200 + $60
= $260
If I add my total risks then Risk Measure I + Risk Measure II is...
= $500 + $150
= $650 at any trade at any give time.
Now,
So $650 is 1% of what principal investment?
Mathematically,
$650 = 1% x ???
or, $650 = 0.01 x ???
or, $650/0.01 = ???
or, ??? = $65,000
Let's check if we start with Principal investment of $65,000 can we build a buffer amount of $62,500?
Risk 1% of $65,000
= $650
At the most I can risk $650 that means I can take not more than 1 regular lots and 3 mini lots per trade on a risk of 1% of principal investment or 50 PIPs stop loss limit.
For 1 regular lot trade 50 PIPs loss = 50 x $10 = $500
For 3 mini lot trades 50 PIPs loss = 50 x 3 x $1 = $150
At 20 PIPs profit per trade,
For 1 regular lot trade 20 PIPs profit = 20 x $10 = $200
For 3 mini lot trades 20 PIPs profit = 20 x 3 x $1 = $60
So,
I will make $260 in 1 trading day
I will make $1 in...1/$260 trading day
I will make $62,500 (=as a buffer amount) in (1/$260) x $62,500 = 240.384 days
For our purpose,
5 trading days make 1 week
1 trading day make 1/5 week
240.384 trading days make (1/5) x 240.384 weeks = 48 weeks
Equivalently, we'll reach our goal in 48 weeks or 1 year.
Next, practice how much capital investment you will need if you want to become fulltime forex trader under 6 months.
