Edit - How Much Money Can You Make From Forex Trading PDF

How Much Money Can You Make From Forex Trading?
Contents
About The Author..................................................................................................................................... 3
Introduction ............................................................................................................................................... 4
The Most Important Metric In Your Trading Career ........................................................................ 5
Why You Must Play More To WIN More .............................................................................................. 6
Why Money Is The Lifeblood Of Your Forex Trading Business ...................................................... 7
Why Your Bet Size Determines How Much You Can Make ............................................................. 8
Do You Withdraw Or Compound Your Returns? ............................................................................... 9
So, How Much Money Can You Make From Forex Trading? ......................................................... 10
Summary ................................................................................................................................................... 11
Do You Want More Stuff Like This? ................................................................................................... 12
2
About the Author
Hi, my name is Rayner Teo.

I’m not a multi-millionaire trader, I don’t drive fancy cars, and I don’t live in a
penthouse.
But I am an independent trader, an ex-prop trader, and the founder of
TradingwithRayner.
I specialize in studying great research (from people much more qualified than me)
and applying it to the real-world of trading to find out what works and what doesn’t.
And finally, share them with traders like you so you can become a consistently
profitable trader.
Cheers,
Rayner Teo
3
Introduction
I’m sure you want to know how much money can you make from forex trading, right?
After all…
You’ve heard of traders making millions in the financial markets.
But here’s the thing:
You can’t compare yourself to them.
Why?
Because you’ve got different account size, risk appetite, risk management, trading
strategy, and etc.
If you do so, it’s like comparing an apple with an orange (it’s silly).
That’s why I’ve written today’s post to explain how much money can you make from
forex trading — with objective measures.
No more second guesses. No more ridiculous projections. No more illusions.
Just statistics, numbers, and the cold hard truth.
Ready? Then let’s begin…
4
The most important metric in your trading career

Here’s the thing:
You can have a 1 to 2 risk to reward on your trades. But if you only win 20% of the time,
you will be a consistent loser.
Now obviously your risk to reward isn’t the answer. Then what is? Your win rate?
Let’s see… Perhaps you have a 90% win rate. But if you lose $0.95 for every dollar you
risk, you will also be a consistent loser.
So, what’s the solution? Clearly, your risk to reward and win rate are meaningless on
its own.
Well, the secret is this…
…you must combine both your win rate and risk to reward to determine your
profitability in the long run.
And this is known as your expectancy.
Your expectancy will give you an expected return on every dollar you risk.
Mathematically it can be expressed as:
E= [1+ (W/L)] x P – 1
Where:
W means the size of your average wins
L means the size of your average loss
P means winning rate
Here’s an example:
You have made 10 trades. 6 were winning trades and 4 were losing trades. That
means your percentage win ratio is 6/10 or 60%. If your six trades brought you a profit
of $3,000, then your average win is $3,000/6 = $500. If your losses were only $1,600,
then your average loss is $1,600/4 = $400.
Next, apply these figures to the expectancy formula:
E= [1+ (500/400)] x 0.6 – 1 = 0.35 or 35%.
In this example, the expectancy of your trading strategy is 35% (a positive expectancy).
This means your trading strategy will return 35 cents for every dollar traded over the
long term. Let’s move on…
5
Why you must play more to WIN more

Have you realized this?
The majority of casinos operate 24 hours a day, 365 days a year. Why?
Because the more they play, the more they make — and it’s the same for trading.
You’re might wonder:
“How does this relate to trading?”
This means the frequency of your trades matter. The more trades you put on, the
more money you’ll make (albeit having a positive expectancy).
Imagine this:
You have a forex trading strategy that wins 70% of the time, with an average of 1 to 3
risk to reward.
But here’s the thing…
…it only has 2 trading signals a year.
How much money can you make from this forex trading strategy?
Not a lot, right? Heck, you might even lose in that year since there’s a 9% chance of
losing two trades in a row.
Can you see how important this is?
Now:
The frequency of your trades is important but it’s not enough to determine how much
money you can make in forex trading.
There are still a few more factors that play a major role. Read on…
6
Why money is the lifeblood of your Forex trading

business
You’ve probably heard of stories where a trader took a small account and trade it into
millions within a short while.
But what you don’t hear is that for every trader that attempts it, thousands of other
traders blow up their account.
So…
Let’s not treat trading as get a rich quick scheme. Instead, treat it as a business you’re
looking to grow it steadily over time.
Now, let’s say you can generate 20% a year (on average).
With a $1000 account, you’re looking at an average of $200 per year.
On a $1m account, you’re looking at an average of $200,000 per year.
On a $10m account, you’re looking at an average of $2,000,000 per year.
This is the same strategy, same risk management, and same trader.
The only difference is the capital of your trading account.
Can you see my point?
Now…
That’s not to say you can only make 20% a year because, for a day or swing traders,
the percentage could be higher (as you have more trading opportunities).
But no matter what strategy or system you’re using…
…the bottom line is you need money to make money in this business, period.
7
Why your bet size determines how much you can make
You’ve probably heard this before…
“The bigger you risk, the higher your returns.”
So is this true?
Well, yes and no.
Here’s why I said yes…

Let’s say your trading strategy has a positive expectancy and generates a return of
20R per year. Also, you have a decent size $100,000 trading account.
So, how much can you make from your trading?
Well, this depends on how much you’re risking per trade.
If you risk $1000, then you can make an average of $20,000 per year.
This is the same strategy, same account size, and same trader.
The only difference is your bet size (or risk per trade). The bigger you risk, the higher
your returns.
Now…
Here’s why I said no…

If your bet size is too large, the risk of ruin becomes a possibility. This means you have
a higher risk of blowing up your trading account — and it reduces your expected
value.
If you want to understand the math behind it, go read this risk management article by
Ed Seykota.
Moving on…
8
Do you withdraw or compound your returns?

If you make an average of 20% a year with a $10,000 account, after 20 years it will be
worth… 383,376.00.
But what if you withdraw 50% of your profits each year?
This means you will make an average of 10% a year and after 20 years your account
will be worth… $67,275.00.
Now clearly, compounding your returns will generate the highest return.
But whether it’s feasible or not depends on how you manage your trading business.
Here’s why…
If you’re a day-trader, then chances are trading is your only source of income. You
have to withdraw from your account to meet your living needs.
But if you have a full-time job and you’re trading on the sides, then you don’t have to
make any withdrawals and can compound the returns in your account.
Now…
There’s no right or wrong to this. Ultimately, you must know what you want out of your
trading business — and understand how withdrawals will affect your returns over
time.
9
So, how much money can you make from Forex

Trading?
Now…
You’ve learned the key factors that determine how much money can you make from
forex trading. Next, let’s see how to use this knowledge and calculate your potential
earnings.
Here’s an example:
Trading expectancy – 0.2 (or 20%)
Trading frequency – 200 trades per year
Account size – $10,000
Bet size – $100
Withdrawal – None
Once you know your numbers, plug and play them into this formula…
Trading expectancy * Trade frequency * Bet size

And you get:
0.2 * $100 * $200 = $4000
This means you can expect to make an average of $4000 a year (with the above
metrics).
Now if you want to convert to percentage terms, then use this modified formula…
[Trading expectancy * Trade frequency * Bet size] / Account size

And you get:
[0.2 * $100 * $200] / $10,000 = 40%
This means you can expect to make an average of 40% a year.
10
Summary
So, how much money can you make from forex trading?
Well, there’s no one factor that determines how much money you can make in forex
trading.
Instead, you must look at these 5 metrics:
1. Trading expectancy
2. Trading frequency
3. Account size
4. Bet size
5. Withdrawals
Then apply this formula… Trading expectancy * Trade frequency * Bet size
And you’ll have an objective measure of how much money you can make in forex
trading.
And to sum everything up, I’ve prepared a special training video to explain these
concepts step by step.
So go watch it below:
11
Do you want more stuff like this?
Then check out my website, TradingwithRayner because you’ll learn

new trading strategies and techniques to level up your trading.
There’s no hype or fluff but only the good stuff.
Here’s the link: www.tradingwithrayner.com
12

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How Much Money Can You Make From Forex Trading?

The Most Important Metric In Your Trading Career ........................................................................ 5

Why You Must Play More To WIN More .............................................................................................. 6

Why Money Is The Lifeblood Of Your Forex Trading Business ...................................................... 7

Do You Withdraw Or Compound Your Returns? ............................................................................... 9

Do You Want More Stuff Like This? ................................................................................................... 12

About the Author

Hi, my name is Rayner Teo.

The most important metric in your trading career

Why you must play more to WIN more

Why money is the lifeblood of your Forex trading

Here’s why I said yes…

Here’s why I said no…

Do you withdraw or compound your returns?

So, how much money can you make from Forex

Trading expectancy * Trade frequency * Bet size

[Trading expectancy * Trade frequency * Bet size] / Account size

Do you want more stuff like this?

Then check out my website, TradingwithRayner because you’ll learn

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