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Question: Is this a good forex trading strategy that could work to make you a millionaire? please read/advise. thanks?

(Posted by: William M on 2010-02-21 13:58:55)

Okay, so, currently I'm 18 and I've looked into different possibilities of how I could become a millionaire using the forex market as my vehicle. I have discovered that using 1:100 leverage or even 1:50 - 1:25 is a bad idea if you want to be safe about it, and using a more modest 1:10 leverage instead is best for my chances of success. What I've also discovered is that the forex markets trends last months or even years. So, my plan is as follows: 1) Start with $1, 000 in my new forex trading account. 2) Use 1:10 leverage always to reduce a lot of risk. 3) Use a stop- loss of all my trading capital in every trade. 4) Keep the minimum take- profits as long as its more than what my commissions would be. 5) Just follow monthly chart trends, i.e. if the trends gone up for the past year on a yearly chart, and it shows it in a monthly chart that its going up as well, just follow the trend up along with it and keep on going up until I think its going to stop going up by taking advatage of lots of small take profits along the way. 6) Be aware of economic news and reports. Example: Say the GBP/ USD is trading at £1.0000- $1.5000, and I place a bet to buy GBP/ USD at this price at a 1:10 leverage, or $15, 000 worth of pounds, (£'s) and I set a take- profit of, say, $15 or 10 pips and a stop- loss of my whole $1, 000 and and keep on doing this, taking profits by trend trading and make this same $15/ day for the 6 days the FX market is open a week, or $90/ week x 52 weeks = $4, 680 in 1 year + my original $1, 000 = a 568 % return for one year. After I have achieved my 568 % for 1 year, reinvest all capital and get another 568 % compounded on top of that. So, it works as follows: year 1) $1, 000 up 568 % = $5, 680 year 2) $5, 680 up 568 % = $32, 262.40 year 3) $32, 262.40 up 568 % = $183, 250.43 year 4) $183, 250.43 up 568 % = $1, 040, 862.40 = USD millionaire year 5) $1, 040, 862.40 up 568 % = $5, 912, 098.74 = USD multimillionaire and GBP multimillionaire, or £3, 829, 025.15. What do you say here like? Could this plan work do you think?

Posted by: JB on 2010-02-21, 14:01:42

You're catching a falling knife. Just buy some gold and let it set for 5 years. That or short some bonds because interest rates are going up. Don't screw around in currencies... you'll lose your ass.

Posted by: Karl on 2010-02-21, 14:03:24

It doesn't work like that, I'll bet you that $1,000 that you won't make it through year one, much less year two. Forex is for the pros and you would be eaten like an oyster, swallowed whole without a second thought.

Posted by: UnclePug on 2010-02-21, 14:11:24

It won't work because: 1. Trading currency futures is normally a $2,500 minimum balance at all times, meaning to set up a single position you are planning would need another $5K or so. 2. You will have to prove that you have trading history, provable income and liquid assets of at least $25K to open the account, because if you get margin called out on a bad position, that 10:1 leverage is working against you. FOREX is very volatile, I know guys that lost $5k a position in one day! 3. I know some traders that trade by a safer route, simply short or long currency ETF's like FXB, FXY, UDN, UUP etc.