Forex Deadly Sin 9: Using Too Little Money For Your Profit Goals
Let’s be honest, people join Forex signals services because they want to make money, right? And in order to make money, the signals service needs to have signals that win more on their winning trades than they lose on their losing trades over the long term. But even a signals service that is completing this prerequisite for profitable trading might not be hitting the Forex signals subscribers profit goals.
The truth is, performance alone is not responsible for whether a signals follower reaches their profit goals. In this lesson of the Forex Signals Success Course, I want to go over the Deadly Sin of using too little money for your goals.
The Goal Of The Signals Service Is To Be Profitable Over Time
The goal of any Forex signals service is to be profitable over time. This means banking more pips than they lose over the long run. The goal is NOT to hit some arbitrary profit number.
A lot of people join a Forex signals service because they want to make a certain amount of money. But this really is the wrong attitude when you are investing in the currency market. Just like any investment venture, you cannot foresee exactly how much money you will make on a month to month basis. Therefore, the goal should be to grow your account over time in a systematic way by following the signals.
Trading Forex Profitably Is An Accomplishment
If you have every tried to trade the Forex market on your own, you know it is a lot harder than you want it to be. So, your first goal should be to find a Forex signals service that allows you to join the ranks of profitable traders. If you are profitable over time, you should be happy.
What you don’t want to do is abandon a long-term, profitable Forex signals service because you don’t think it is “profitable enough”. Think of using a Forex signals service like a PASS/FAIL situation. You are either making money over the long term or you are not. And if you are making money… you should continue with the signals.
Reach Your Profit Goals By Building Your Account Balance
What most people don’t want to admit is the reason they are not reaching their profit goals using a signals service is because they don’t have enough money in their accounts. With low capital amounts, they look to the service to have spectacular performance so they can make a lot of money. And with this expectation, they are easily disappointed.
But you don’t need more pips to make more money. You need more money in your trading account so you can safely use higher lot sizes on your trades. This will greatly increase your profits, even with the same pip numbers.
- For example, let’s say you have an account size of $1,000 and use an average lot size of 0.1 (or around $1 a pip). If you have a winning month of +350 pips, you would make $350.
- But if you started with an account of $10,000 and use an average lot size of 1.0 (or around $10 a pip), you would have made $3,500 for the same 350 pip gain.
You see, hitting your profit goals has more to do with how much money you have in the market and the lot sizes you are using than the actual pip gains. Expecting to reach unrealistic profit goals with very little money in the market means you are looking for unrealistic pip gains. And since these pip gains are unattainable, it is very easy to get frustrated and abandon a perfectly good signals service.
The Two Step Process Of Forex Success Using Forex Signals
Most people do not start out with a trade account balance that allows them to reach their profit goals. Therefore, the first thing they need to do is focus on building their account balance to the proper size for their profit goals. This can, and should, be done in 2 ways:
- Systematically trading the signals with safe lot sizes
- Systematically adding money to your trading account
By both trading the account safely AND adding funds to your account, you can build your account to the proper level for your goals a lot faster. So, here are the 2 steps most people need to follow:
- Step 1: Find a Forex signals service that is profitable over time
- Step 2: Systematically build your trading account balance through safe signal trading and addition of funds
Once you reach the account level you need to achieve your profit goals, you can start systematically withdrawing your profits and improving your lives.
What you don’t want to do is abandon a profitable Forex signals service because you think it is not profitable enough (which is really a result of having to little money in the market). You then keep searching for a signals service that IS profitable enough… which means it has to have spectacular performance month in and month out. And since that signals service doesn’t exist, you go through disappointment after disappointment before finally abandoning Forex trading all together.
If you feel you are not making enough money using a signals service, ask yourself these questions:
- Is the Forex signals service making positive pips over the long term?
- Do I have enough money in the market to reach my profit goals?
If you answer “yes” to question 1, you do NOT want to abandon the service.
If you answer “no” to question 2, you need to focus on systematically growing your account, NOT looking for a service with better performance.
When you can answer “yes” to both questions, you will be well on your way to making the life changing profits you wanted when you joined the signals service.
In short, don’t commit the Deadly Sin of using too little money for your profit goals.
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