Forex

I wanted to show Kathy Lien's and Boris Schlossberg's trading results for the last 2 months so that everyone can see what reality is. For those of you that don't know who they are, they both have written books on trading Forex, are both currency analysts at FXCM and they both regularly appear on CNBC. The results below are for the trades that they made public. What goes on behind the scenes is obviously unknown to me.

Their results are good; they made 366 pips between September 29th and today. I'm bringing it up because I think it's important to have realistic expectations when trading. When I first started trading, I thought it would be easier to make a living doing this. I quickly changed my thinking. Also, when you see "experts" making 366 pips in 2 months, you wonder how it would ever be possible to do this full-time.

If you average 400 pips every 2 months trading 2 100K lots, that's a total of 2400 pips over the year. That's approximately $24,000 a year. That's it! That's not a lot of money. I think the only way to do this for a living is to have plenty of capitalization so that you can trade more than 2 lots. In order for you to make $96,000 a year, you would need to trade 8 100K lots each trade. That would give you 4 times as many pips and therefore 9600 pips over the year.

How much capital would you need to start if you wanted to trade 8 100K lots with only a 3% risk per trade to your account. Let's use 30 pips as a stop loss for this example. If you lost 30 pips trading 8 lots, you would lose a total of $2400. Therefore, you need to have $80,000 in your account if you only wanted to risk 3%.

If my calculations are off, let me know but the reality is, even if you can consistently make good trades each and every month, you need a lot of capital to start to make a living. I'm assuming that you have to make $96,000 a year but some of you may require much less. For those of you in the New York City area like me, $96,000 isn't rich and I'm sure it's the same for a lot of other people in California or other parts of the country or world.

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