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How to Make A Billion in Forex

I don't think any of the billionaires alive have made their money through forex. So if you do it, you'll be the first. I got to tell you you've got a really hard job in front of you.

Okay just for fun what would you need to do to create a fortune of a billion dollars in forex?

You'll Need Time

Lots and lots of time. If you're thinking this is a five year project, you've got another thing coming. Of course how much depends on how much you start with, how much you contribute each year, and how much you earn each year.

Unless you're already really wealthy, I'd say you're going to need 40+ years, and even then your chances are pretty slim. On the other hand suppose you miss your billionaire target badly. Say you ended up with only $10 million. That would be just awful, wouldn't it? ;-)

Rid Yourself of Preconceptions

When new traders come to forex (if they haven't been traders elsewhere), they usually have a lot of ideas that are dead wrong. If you have any of these erroneous ideas, you'll need to get rid of them too in your quest for a big fat billion dollars.

The first is the worst. That is, it's easy to make money in forex. It's no easier than any other entrepreneurial endeavor (and those aren't easy). Another is that using the 200:1 leverage the broker gives you is a good idea. That's only a good idea if shooting yourself in the foot is a good idea.

You'll need to keep a tight lease on your risk. Funny thing is every professional forex trader I know (one who trades other's money) abhors leverage over 2:1.

The last major, insidious myth is that equity curves are always smooth. In other words you'll always be making more money every time you trade. It's kind of like turning on your own ATM machine.

Well, surprise! You're going to give money back to the market. Losing trades, you will have.

Get a Crystal Ball (or the Holy Grail)

So what to do? In all honesty, you're going to need a system that will produce large returns consistently, year after year in excess of 50% return per annum. Also you'll need large (I do mean large) infusions of cash into your trading account each year.

Suppose that you were to start with an account of $10,000. Your trading system produced a return of 50%. Let's make one more assumption, you just invented something marvelous. You patent it and sell the rights to it to some company that pays you half of a million every year for the next twenty years.

If you continued to earn around 50% every year and put your huge royalties into your trading account, you'd be a billionaire in about sixteen to twenty years.

So there you go. That's the plan. Start figuring out what you're going to invent. That'll be the hard part!