One of the biggest reasons why most forex traders fail to be profitable in the long term or the reason why most are unable to achieve their financial goals through trading is usually lack of capitalization. I have spoken several times about this issue and the fact that most - if not all new traders - seek to achieve financial independence with a usually very small account in the order of 5-10K or even less. The truth is certainly that this is not possible in a sustained manner over a long period of time.
Even if your needs were as low as 1K, producing 10% in average every month is most likely impossible as the self-limiting character of inefficiencies in the market would prevent this achievement for a very long time. As a matter of fact, there are no examples - to the best of my knowledge - of people who have achieved this degree of proficiency for at least 5 years with most people who speak about this profit levels being "sustainable" achieving them in small periods of time. It therefore remains true that such targets are unachievable under statistically significant periods of time (5-10 years) (if you have real evidence of an example of someone who has achieved this please do let me know !).
Why do the best fund managers and traders in the world earn so much money if their returns - to the beginning forex trader at least - seem so humble ? The truth is actually that making money in the market (and keeping it !) is extremely difficult and achieving proficiency that allows survival under many different market conditions is very difficult. The ability to stand through deep and extended draw down periods and the ability to have confidence in one's strategy is a vital part of achieving this hard endeavor.
This is why when you are able to achieve profitability during a statistically relevant period you can say that you have acquired one of the rarest abilities in today's modern financial world : The ability to make money. You have indeed succeeded in the use of trading strategies to exploit market inefficiencies in a sustainable fashion, something which is terribly difficult to do and absolutely valuable. Even if you did so only with a 1000 USD account, the fact that you now master this skill makes your income potential effectively limitless.
After taking this step at mastering the ability to make money it is now time to make forex trading a real business for you. If you really want to make money trading, then you cannot limit yourself to the trading of your own capital, you need to start managing other people's funds in order to increase your income potential to levels which fit your life style. With a five year verified track record there will be many people fighting for you to manage their funds and I can assure you that you will not have problems finding people willing to get the diversification and "higher than stocks" average yearly return you will be offering.
In the end you need to focus on developing your ability to make money and you need to think about trading as a business to sell this ability. Do not limit yourself to your own capital. If you truly have the skills to make money then there should be no fear in sharing this ability with others. You will explain them all the risk and your track record would also show the ups and downs of a 5 year trading period. In the end your ability will shine on its own and even if you can "only" make a 15% average yearly return, you will have literally millions of dollars lined up for your management.
Tomorrow I will write a post about the technical and regulatory aspects concerning money management in forex so that those of you interested in this path will have a better idea of how to follow it. If you would like to know more about my journey in automated trading and how you too can code systems geared at achieving long term profitability please consider buying my ebook on automated trading or joining Asirikuy to receive all ebook purchase benefits, weekly updates, check the live accounts I am running with several expert advisors and get in the road towards long term success in the forex market using automated trading systems. I hope you enjoyed the article !