How To Analysis Forex

 


Some time ago, there was a question from a fellow trader via WA. Yep, and the question seems to me a pretty good one, as it might as well represent those of you who have the same desire. Here's the question:





Mr. El, I am interested in retiring early, after I no longer work. Can I make a living from stock trading?



I want to earn 10 million per month from trading. What is the minimum capital for trading with an income of 10 million per month?


Questions like this, I don't think are new. Quite a number of Stock traders have similar questions. Many part traders want to leave their jobs or retire and then become full time traders.


If I summarize, the points that traders who want to become full time traders want to aim for, usually include the following:


1. Want to retire early and become a full time trader

2. Want to get fixed income from the results of a full time trader

3. The minimum capital required for a full time trader, in order to reach the second point

4. What is the minimum number of years of trading to become an FTT?


Now we will discuss one by one. This article also answers questions from colleagues who aspire to become full time traders:


WANT TO RETIRE & BECOME A FULL TIME TRADER (FTT)


The decision to become a full time trader, you must think carefully. If you want to become an FTT, you NOW should be able to get CONSISTENT PROFIT (your last condition when you were a part time trader).


Consistent profit means: you can get a stable profit in a certain percentage range (related to the percentage of consistent profit, we will discuss in the next point), and second: Your profit can be used to cover the costs of daily needs, and you can still save a MINIMUM of 10 % of your trading results.


How much your daily needs, it's all only you understand. Everyone has different needs and expenses.


Therefore, you must be able to calculate your own expenses, and compare them with the profits you can get at this time. Let's say your monthly expenses are around IDR 5 million, then you should be able to get a consistent profit in the range of MINIMUM IDR 5.5 million per month (There must be 10% of trading results that can be saved).


On the other hand, if you can't make consistent profits, there will still be a lot of losses. You have not been able to choose a good Stock. Or even just starting trading, don't be in a hurry to become a full time trader, because the risks are big. Undo your intentions first.


WANT TO GET FIXED INCOME FROM FULL TIME TRADING


Traders who want to be full time and focus on stocks, often say:


"I want to earn IDR 10 million per month from stocks"

"I want to make a profit of Rp. 20 million per month. Is it possible?"


This is what I want to clear up as well. You need to understand, the stock market is dynamic and volatile. There are times when market conditions are very good. There are times when the stock market tends to be sluggish.


That means, your income as a stock trader cannot be the same as your income as an office worker. Yep, if you work in an office, you will get fixed income from your salary, with the same amount every month.


But if you're trading stocks, don't expect you to get fixed income with the same nominal value, let's say a profit of IDR 10 million every month. Because market conditions are very volatile.


If the stock market is good, you can earn big profits. If the market is sluggish, you have to wait and see a lot, so chances are that your profit will not be as big as when the stock market is good or stable.


So, it is very possible that this month you can make a profit of Rp. 15 million. But because next month, the market tends to fall, your profit is "only" IDR 7 million per month. Two months later because you have saved good stocks that are falling again and you sell at a high price, then your profit two months after is Rp. 27 million. Things like this are very common in trading.


In this post: How Much Profit in Stocks a Month? I have explained that the share profit each month will not always be a fixed amount.


So what is said CONSISTENT PROFIT (read again point 1) in trading it doesn't mean you have to get a fixed profit from shares every month. Consistent profit trading is said to be consistent if you can achieve a profit with a certain range consistently for a minimum of 1-2 years.


As additional education, you can study my writing here: Consistent Profit Shares, What's Your Target? In that post, I explained in detail about the correct understanding of consistent profit.


QUESTIONS ABOUT MINIMUM CAPITAL FOR FTT


Question: "What is the minimum capital so that I can become an FTT?" Very often asked. The answer is of course varied... Talking about trading capital, you should be able to answer my following questions:


1. How much profit can you get now? Can you cover the cost of daily necessities + 10% to cover?


From the total capital you use for trading now, it will generate profit. Well, from the profit you get per month, that's where you can answer, whether the profit you get can cover expenses + 10% is used for saving.


As I discussed in point 1 earlier, if you have a monthly expenditure of around IDR 5 million, then at least you should be able to get consistent profits in the smallest range of IDR 5.5 million++ with your capital.


If your capital is IDR 100 million, and you can get a profit above IDR 5.5 million per month, then the IDR 100 million capital that you use can be said to be the ideal capital to become an FTT.


On the other hand, if with a trading capital of Rp. 100 million, your monthly expenses are around Rp. 5 million, and you can only make a profit of around Rp. 4 million per month, then Rp. 100 million in capital is still lacking.


Or it could be, your trading experience is still not sufficient. Read the next point...


HOW MANY YEARS OF TRADING TO BECOME FTT?


There is no standard benchmark for how many years the minimum to become an FTT. But what is clear, if you are still trading under 1 year to 2-3 years, I think it is still not enough, because you still need to learn a lot and explore the ins and outs of the market, so that when you become an FTT you are not surprised.


If you have been trading for more than 3 years, and have faced a bearish, sluggish stock market condition, then you have been able to make consistent profits and can cover your needs, then that's where you are ready to become an FTT.


On the other hand, if you can't fulfill these points, you have to increase your trading hours again.


So the size of the capital for FTT only you can answer based on your ability to get profit, trading experience, and daily needs.


ADDITIONAL POINTS: HAVE PASSIVE INCOME


Another additional point, for those of you who intend to become an FTT, I suggest you, at least you already have sufficient SAVINGS for the next 2 years, and at least you also have PASSIVE INCOME before becoming an FTT.


Passive income can vary: From deposits, mutual funds, gold, land investment, investment in blue chip stocks and others. It's even better if you have a small business besides trading as your main income.


In essence, passive income will make you calmer. Psychologically calm will also make the trading decisions you take better, and you will also not feel "chased" to have to make a profit, so that your target is fulfilled.


So I have to answer honestly.... If you ask:


-Sir, I want to become an FTT, how much is the minimum capital for FTT?

-Can I make a profit of IDR 20 million per month from FTT?

-Is the capital of Rp100 million enough for FTT?


So I can not answer with a definite and short answer. Because there are many things and analysis that you need to consider to answer such questions, and everyone has different needs and experiences.


That's all only you can answer for sure. Well, in this post, I've provided important keys that you can answer for yourself, to answer: Are you ready to become an FTT or not?

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