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The Four Percent Example: Get Rich

Get Rich from Forex Trading: The 4 Percent Move Example

When a great athlete is young, she does not dream of being average. Likewise, a young forex trader must not dream of doing OK in the forex markets, but of making a killing. Otherwise, without a lofty goal, the road to greatness can be dreary.

To that end, let’s take a moment to look at one example of how awesome it can be to be a very good forex trader.

Spotting Opportunity

Have you ever noticed that when you try not to lose, you start losing? This phenomenon, much like the Fibonacci Tools so many forex traders examine, exists in nature and portrayals of nature, such as sports and…come to think of it, the forex markets.

This, then, is the way great currency trades start out: with a spotting of opportunity. Rarely, if ever, will you find a million-dollar forex trade that began in fear.

Perceiving that a certain country’s currency could rise 4 percent within the next three to six months relative to the currency of a certain another country is, for instance, an opportunity that is highly “spottable” for those who are on the look out.

Time to Get Rich

But spotting an opportunity through the use of forex robots or advanced symbols is only the first step. Now the smart, ambitious currency trader will seize the opportunity at hand, making certain to, if the market moves her way, not only capitalize on the move, but actively get rich.

The forex markets are the perfect place to be aggressive in this regard—provided you are prudent at the same time.

Aggressive but prudent meaning the smart forex trader enters the trade at a solid technical level, the position is sized correctly with plenty of leverage, and an appropriate stop-loss underpins the downside risk that this trade is a bad idea.

Patient Now

The purchased currency pair languishes for weeks.

But the stop-loss is never hit.

And then one day, the move begins.

The 4 Percent Example

Now it becomes a matter of math, which is fantastic news for the smart forex trader. For math, when you’re on the good side of a currency pair, is hugely in your favor.

By the numbers:

The get rich-minded forex trader buys 12 standard lots of GBP/USD. A standard lot consists of 100,000 units of the base currency, in this case the U.K.’s Pound.

At the time of purchase, the GBP/USD buy price stands at 1.6315.

The cost to the trader is $9,789 (the forex broker offers 200-1 leverage).

By the end of six months, the GBP/USD has risen 4 percent, to 1.6968.

The smart forex trader has thus raked in a solid 653 pips on the trade—per unit of GBP/USD that was purchased.

With each pip worth $0.001 USD, the profit on each unit of GDP/USD comes to 65.3 cents.

There are 12 standard lots of 100,000 units each, making a total of 1.2 million units.

Now you take 1.2 million and multiply it by 65.3 cents…

Now you see that the smart forex trader has achieved a profit of $783,600 from a 4 percent move in the currency markets that took six months to develop.

When you learn forex and realize that a 4 percent move in the currency markets within six months is not that rare, you become rightfully intrigued about the subject of online forex trading.

Important Forex Information

The most important step in currency trading is finding the right broker; our forex experts can help. See our
reviews of forex brokers for more information.  

Advice from certain individuals can markedly increase your chances of becoming a successful forex trader. Find out if it's worth paying for forex training.  

Finding a good forex community, sharing good advice and tips, can vastly improve your trading. Figure out how to use the forex community.  

Forex trading hasn't always been around; understanding how it came into being can help you succeed in trading this market. Read about the history of foreign exchange trading.