July 13, 2011

Spread Betting Forex Full Time - How Much Money Do You Need?

I was recently asked (by a UK-based trader who has just opened an account with Tradefair) how much money you would need to make a full time living spread betting the forex markets, so I thought I would answer this question on this blog.

I often trade forex using one of my spread betting accounts because it's quick and easy. You don't need to worry about lot sizes or anything like that. You simply enter your stake per point, ie £1, £5, £10 etc, enter your stop loss and target price, and then place your trade.

The question of how much money you need to make a full-time living is an interesting one.

If you were looking to make some extra cash to supplement your income, say £100 per week, then I would say you probably need anything between £1000 and £3000 as a bare minimum.

£1000 would enable you to risk £50, ie 5% of your capital, per trade, which is just about acceptable providing you have a really good trading system in place, and would give you a good chance of making your £100 per week.

However if you are looking to make a full-time living from spread betting the forex markets then you probably need to be making at least £400 - £500 per week, and even that's on the low side with inflation going through the roof right now.

So on that basis I would say that you need £5000 as a bare minimum, but more realistically a trading pot of around £10,000.

You could probably get away with £5000 but you would need a tried and tested system that has very few losing trades, and rarely has two or more consecutive losing trades.

A trading pot of £10,000+ gives you a little more freedom because you could risk say 3% per trade, which I believe to be an acceptable level of risk, and still be able to make £500+ per week.

The key point is that however big your trading pot is, you need to have a proven trading system in place if you are serious about generating a decent profit every week. You also have to bear in mind that although you may be able to generate a full-time income, you will always have the occasional losing week.

I do this full-time and generally make some good returns, but still have weeks where I lose money, as you will see if you read my 'Weekly Trading Updates' every week. However if you control your risk and take time to find a reliable trading system, then you can make a full-time living from spread betting without needing more than around £5000 - £10,000 to start off with.

If you don't have this much money to start with, then you can always start off with a small amount and try and build it up to a manageable amount. This can be done although you either need to trade only the very best set-ups or take a few risks.



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11 Comments on Spread Betting Forex Full Time - How Much Money Do You Need? »

July 13, 2011

Jack Maverick @ 2:29 pm:

Great article, James - gives a realistic estimate of necessary trading capital, and also good guidance on an acceptable percentage of equity to risk per trade.

Buy Dinar @ 4:31 pm:

I have read your article it is a really good one. I enjoyed while studing it.

July 14, 2011

Dave T @ 7:10 am:

You're saying that to make £100 a week you can do it with just £1,000 to £3,000?

That's 3% - 10% per week - if you want the account to grow as well so you can earn more then you're talking realistically about getting 6% - 20% a week!

If you, or any other trader can do 6 - 20% a week then let me know, I have a shed load of money you can trade for me!

James Woolley @ 8:49 pm:

Dave, 3-6% per week is perfectly achievable. I know someone who makes over 20% per month (and has only had one losing month in 3 years) and he now trades his and several other people's accounts as well.

He freely admits that he uses a high-risk strategy but it's clearly working for him.

I myself make a relatively small amount per week percentage wise, but that's because I take fewer risks these days. It is still enough to give me a very good weekly wage most weeks.

July 16, 2011

Michael @ 7:39 am:

Hi James, Thanks for your Article. I am interested to hear more about your contact you mentioned that makes over 20% per month and now trades several other people’s accounts? We have several 100K to spread amongst multiple systems. And with the correct systems (has to have a proven Track Record) we are very happy to pay the Trader an agreed nice commission on all Profits made. I look forward to hearing back from you. Regards, Michael

James Woolley @ 2:09 pm:

Hi Michael, I haven't been in contact with him for ages, but as far as I know he isn't taking on any new clients.

I think he is currently studying for exams with the aim of running his own hedge fund on a professional basis, so I will mention it on this blog if I hear anything.

lee @ 6:14 pm:

i would say your figures are a little optimistic although for the very few they are achievable, i've averaged about 4% a week trading quite conservatively for over 2 years now but anything more than that i believe would entail quite a bit more risk.

July 25, 2011

Forex Training Guide @ 5:26 am:

The capital should be recovered along with a 20% profit for rookies to continue with the forex trading strategy that they are using. Else, they need to change theorems, pronto!

July 26, 2011

Michael @ 4:47 am:

Hi James,
Thanks for your reply about your contact, much appreciated : )
I will keep an eye on this Article just incase someone can work with me in regards to my Question above.

Michael @ 4:59 am:

Hi Lee,
Any chance that you trade other peoples accounts on a profit share basis using your mentioned 4%/week Strategy?

Raj @ 4:56 pm:

Hi James,

Can you please tell me about some of the proven fx strategies that can generate 3 to 5 % week.

Is you 4 hour system able to generate that kind of average weekly return lets say from last 2 years.

Your blog is really helpful.


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