How To Make $100 a Day Trading Forex and Futures Contracts
It is very possible to make $100 trading forex and futures contracts every single trading day. It is simply a matter of using a few wisdom nuggets to pick your trades. In the next few sentences, we will give a basic guide on how this can be achieved. You will be amazed at how easy this can be if you know what you are doing.
The first step is to look at the financial instruments available for trading in the forex and futures markets. In forex, currencies behave differently. The EURUSD is the most traded currency in the forex market and has an average trading range of 100 pips daily. However, lesser known currency pairs such as the USDZAR have a daily trading range of 950 pips, albeit with a larger spread. If you are trading currencies, you would want to trade pairs that have a good daily pip range. You would not want to be hopelessly stuck with pairs like the EURCHF which can’t seem to snap out of its 10-pip daily range for 3 weeks running, or the USDJPY which has been oscillating within an indeterminate 40 pips range. Spot metal and crude oil futures all have daily ranges that exceed 500 pips.
The key here is to select a trading instrument that has a daily range that will support your target of $100 a day.
The next step is to boost your trading capital to at least $2,000. This is so important. Your trading capital has a direct bearing on the risk management you will apply to your trades and will determine the trade size you will use. Most expert agree that you should use a leverage of 1:100 and never expose more than 5% of your account size to the market at any given time. If you follow these principles, a $2,000 account will allow you a maximum of 0.2 lots per trade, giving you a daily target of 50 pips in order to achieve your $100 target. Anything less will mean you have to reduce the lot size of your trades, and aim to make a higher number of pips to achieve your target. Another alternative which is not desirable is to increase the risk factor of your trades. This is dangerous and can lead to uncontrolled losses if you are not careful.
Once you have beefed up your trading capital and you have identified the instruments you can trade, the next step is to actually trade for money, using well tested and proven trading strategies that will give you a good chance of success. Now making $100 a day could mean making $100 straightaway, or making $200 and allowing a loss factor of $100, achieving a net gain of $100 for the day.
Let us look at a few strategies that you can use to trade.
1) The Range-Bound Markets
Range-bound markets exist when the price action of an underlying asset hobbles in between a price spectrum; there is an upper limit of price and a lower limit of price. These limits define the price range of an underlying asset. This condition usually occurs when there is a lack of direction in the market; usually most traders are on the sidelines waiting for a major news event to give them a direction in which to trade in. If you trade the range-bound markets, you can actually make money by selling at the upper limit and buying at the lower limit of the price range. If you use a 1 hour chart for this, you will get many trade opportunities. Usually such entries must be supported by a momentum indicator that indicates oversold and overbought situations, such as the Stochastics oscillator. See the chart below for examples.
This chart shows the situations that emerge in a range-bound market for 3 days where a trader can buy and sell an underlying asset.
Day 1 (21st Dec)
The trade marked “5” can be taken when a trader sells at point A and exits the position at point B. This move was from 1.3196 to 1.3090 is a 106 pip trade. This move takes care of your target for Day 1.
Day 2 (22nd Dec)
You have two trades for that day. The trade marked “1” and “2” were each Buy trades. Trade 1 (Buy at point B and sell at point C) was a 100 pip trade. Trade 2 (Buy at point D and sell at point E) was an 80 pip trade.
Day 3 (23rd Dec)
The only trade here was Trade 3, a buy trade at point F and an exit at point G. Buying the underlying asset at 1.3060 and exiting at 1.3150 is a 90 pip trade.
Now if you look at these trades critically and placed trades with a lot size of 0.2, you would have exceeded your $100 target for the day. Opportunities like this present themselves every day. Let us look at other strategies for trading for $100 a day.
2) Trading Pivot Points
Pivot point trading is one of the range trading techniques available in the market. The principle of using pivot points is that the buyers tend to buy at supports and sell at resistance points.
This chart illustrates the typical behavior of the price of the underlying assets when it is near a support or a resistance. The pivot points were plotted with an automatic pivot point calculator on 29th June. When the price action is at S2, we can see that there are several bullish candlesticks at that point.
The bullish candlesticks at the second support line (S2) are a good signal to buy. If you buy at S2, possible exit points should be S1 (serving as a resistance), the central pivot or the resistance lines at R1, R2, R3. In this example, a bullish candle tore through S1 and closed above it, indicating that the bullish momentum would not end at S1. Eventually, the price tested the central pivot point. Repeated testing without a break of key price levels is an indication that it is time to exit the position, and if you take that cue, you can exit at the central pivot for a 129 pip move.
Moves between the pivot points occur EVERY TRADING DAY, and if you follow the principles we have listed in all the steps, there is virtually no way you will not make $100 a day from trading forex or futures.
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