How to Be Consistently Profitable in Forex

How to Be Consistently Profitable in Forex -

On average only about 30% of forex retail traders are profitable in any given year, but only about 5% of forex traders are consistently profitable from year to year.

How can you be in that top 5%?

The majority of forex retail traders lose money, with only a rare few maintaining consistent profits year after year. Every heard of the 90 / 90 / 90 rule? That's 90% of forex retail traders lose 90% of their deposited margin within 90 days.

There are numerous reasons why this is the case, but here we will focus on what specifically results in the opposite: consistent profitability in forex.

Related: Stocks vs Forex: Why Trade Forex?

Sustainability is Key to Consistent Profitability in Forex

If you don't read anything else on this page, at least understand this one thing: sustainability is key.

One of the biggest mistakes that forex retail traders make is having trading decisions that are unsustainable. They use too much leverage, risk too much capital, and trade too short of timeframes in order to be consistently profitable. How can you expect to be profitable when you risk 10%, 25%, or even 50% of your entire account one ONE trade?

All it takes is a few bad trades and you're DONE. You've lost it all.

Sustainability is key.

So let's talk about what it means to be sustainable in forex.

Consistently Profitable Forex Traders Use Low Leverage

Basically all consistently profitable forex traders use low leverage, with most using less than 10x leverage and many using even less than 5x leverage. In business, a company is considered to be OVER-leveraged when they use 1.3x leverage (not 13x, but 1.3x – not even 2x), yet forex retail traders have access to at least 50x leverage!

That's a recipe for disaster.

Leverage is a double-edge sword that accelerates your gains, but also accelerates your losses. How can you expect to be profitable if one bad trade can take out a huge piece of your account?

Consider your loss potential using 50x leverage:

  • -10 pips reduces your account by 5%
  • -20 pips reduces your account by 10%
  • -50 pips reduces your account by 25%
  • -100 pips reduces your account by 50%

What happens if the market JUMPS -100 pips against you?

Slippage is a real risk in the forex market, where your stop-loss will be triggered several pips further than what you wanted. Sometimes the forex market makes large jumps in an INSTANT. If you had put your stop-loss at -50 pips, but the forex market jumps -100 pips against you, then you have lost HALF of your account in an INSTANT using 50x leverage.

Imagine if you had $100,000 and lost -$50,000 on one bad trade?

Many forex traders think: "I will be more conservative once I grow my account large enough to live off..." But how are you ever going to grow your account if you can lose it all on a few bad trades?

Sustainability is key to consistent profitability in forex.

Consistently Profitable Forex Traders Limit Loss Exposure

Many consistently profitable forex traders limit their loss to 2% of their capital per trade. Granted, they might be in several trades at the same time, but each trade is only risking a maximum of 2% of their capital.

Again, if you risk 10% of your capital on ONE trade, then all it takes is a series of bad trades to wipe out a huge portion of your account. Gaining $500 from a $2,000 account may be enticing to you, but can you afford to lose -$500 on one trade? That's a -25% loss!

Sustainability is key.

Consistently Profitable Forex Traders Use Larger Timeframes

I hate to break it to you, but day-trading in forex is a hoax. The only day-traders who appear to be consistently profitable are also "educators" who really make money from you buying their education and attending their seminars.

Most educators also make money from referring you to a particular broker as an affiliate.

In a study of over 400 forex traders, those who traded using 1 minute, 5 minute, 15 minute, and even 30 minute candlesticks typically lost money overall. And forex traders who used primarily 1 hour candlesticks typically broke-even.

It was only those who used candlesticks larger than 1 hour that were overall profitable long-term: they used 4 hour, 1 day, and even 1 week candlesticks.


Because many currency pairs have trends that last for weeks or even months, and following these big trends is were the money is. Ironically, staying in the market for a week while you follow one of these mega-trends provides a more consistent profit than trying to stay in the market only for a few minutes or even a few hours at a time.

There is a lot of "noise" in the daily forex market.

Learn more about why long-term trading is more consistent and reliable than day-trading at How to Win in Forex.

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