To become millionaire with $10k forex trading capital you need 3 trades only
So my colleague encountered this question a few days ago and told me about it. Good question. It aroused my curiosity and refused to go away. So I decided then to do the math and hey it is possible BUT NO I DO NOT RECOMMEND.
- $10000 forex trading capital (how to determine an individual’s trading capital for forex trading?)
- 800 times forex leverage or 800:1
The math of trading forex from $10,000 to become $1,000,000
- Go all in with $10,000 trading capital
- At 800:1 forex leverage, forex margin for 1 standard contract is $125
- Pick a trade
- Place an order for 80 standard contracts (all in remember?)
- Close position with 50 pips gain
- Make $40000 trading profit (50 pips x 80 std contracts x $10 per pip per contract)
- Add $40k trading profit to $10k trading capital to become new capital at $50k
- Pick another trade
- Place an order for 400 standard contracts (based on the forex trading capital of $50k now)
- Close position with 50 pips gain
- Make $200,000 trading profit (50 pips x 400 std contracts x $10 per pip per contract)
- Add $200k trading profit at end of second trade to $50k trading capital at start so that trading capital is now $250k
- Pick one last trade
- Place an order for 2000 standard contracts
- Close position with 40 pips only this time
- Make $800k trading profit
What does it take to become a millionaire through forex trading?
By the end of the third trade, the initial forex trading capital of $10k has expanded to $1,050,000. So I made a mistake. You beat the target by an extra $50k. Results?
OMG! I became a millionaire with $10k forex trading capital in 3 trades!
Is that forex trading?
What is forex trading?
No. It has the makings of a vulgar gamble that belongs to a high stakes casino (see article ‘Will Martingale Betting System work for Forex Trading‘). I don’t think that forex traders who are into trading forex for a living will trade like this. Professionals look at technique and risk management. They are prepared to run a marathon and plan to stay in the business. Going all in every time is not the ingredient to longevity in the business. Why because if you roam the jungle too often, you must ultimately run into a tiger.
For traders who intend to try it though, make sure that you have $10k forex trading capital that is disposable because the drawdown with this kind of leverage is going to be a killer.
12.5 pips loss will wipe you out in this high stakes gamble
- 12.5 pips will wipe out $10k forex margin when you trade 80 standard contracts
- 12.5 pips will wipe out $50k forex margin when you trade 400 standard contracts
- 12.5 pips will also wipe out $250k forex margin when your position is now 2000 standard contracts
The final condition to become millionaire
And as a final condition to become millionaire in 3 trades, you need a forex broker who will honour your payout of $1,050,000 so you had better be trading with a regulated forex trading broker in a country with strong forex regulation by the local monetary authority.
My final conclusion: don’t do it!
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Soh Tiong Hum is Director of TerraSeeds Market Technician Pte Ltd. TerraSeeds is a trading educator in Singapore since 2005.
Soh's Twitter account @sohtionghum
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"I do not have a financial advisor's license. I am not qualified by any regulator to give financial advice. I do not know you the reader. Your investment means and motive may be different from me. My posts here are based on observations and meant for education. I am not responsible for for any consequence from your actions."