Daily Forex #43 - Leverage Is The Reason Some People Become Rich And Others Do Not Become Rich.

A few days ago I shared about how I accidentally stumbled on Forex and made a career out of it. To read that blog post, you can go HERE.

Yesterday (<-- Click this link to read yesterday's story), I quit my job and started my first company. The purpose of the company was to trade Forex for a few of my friends who have invested their money with me. We didn't sign any agreements when they handed over money to me but now with the company, I can offer them some kind of black and white that they have invested with me.

I started trading with about $25,000 of funds invested. Together with my own capital, I was now trading a $40,000 account. Each trade I won generated about $1,000 profits of which about $375 would be my own. The other $625 would go to my investors but I would take a cut of about $200, meaning they got back $425 per winning trade. Therefore, my total profits per winning trade was $575.

This meant I was actually making about 50% more than before per winning trade! I was leveraging on my own skills and investors' funds to make more money than before.

“Leverage is the reason some people become rich and others do not become rich.”

“If you want to be rich, simply serve more people.”

“Start small and dream big.”

The above 3 quotes were from Robert Kiyosaki and they really made sense to me. I was leveraging on other people's money (OPM) to make more money. If I wanted to make more, I had to look for more investors. I started with a small group of people who trusted me with their money and I had a dream of managing millions of dollars one day.

Since I had quit my job, I had lots of free time everyday. I started redesigning my room and made space for a new table and chair. I set up my 2 brand new computers and it was so much more comfortable than before. No more squinting and trying to squeeze the different charts into 1 small screen. I was able to look at 6 charts simultaneously now!

I didn't actively look for more investors as I was happy with what I had now. I was focused on helping my current group of friends make money first and building up a positive track record.

I spent my free time reading up on investments and trading strategies. I read that we should not put all our eggs in 1 basket. To me, this meant I should not put all the funds into 1 trading account. I had to separate them into different brokers as well to minimize my risk.

Forex was an unregulated financial market and every month there are brokers shutting down and disappearing with their clients' funds. I had to pick brokers which had a good track record of paying their clients. I used a couple of Swiss brokers and American brokers. I stopped using American brokers after some time due to the stricter regulations they had to implement.

I had no knowledge of software programming and I was manually keying my trades into 3 different accounts. This was fine as I was using pending orders, however it would be better if I had a program or EA to help me place trades in all my accounts at once.

1 month into full time trading and life was great! I was making much more than before and I had lots of spare time during the day to do research and interact with other Forex traders through online forums.

Will the good times last? Find out tomorrow!

Hope you enjoy today's blog post and if you have any questions please feel free to ask in the comments below and I will definitely respond to you.

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Daily Forex is my way of sharing my personal thoughts on the Forex Industry with would-be traders as well as current traders.

I thank you in advance for following my daily blog post and of course an upvote would be a nice motivation for me. It will also be a sign that my content is relevant and have given you a bit of insight on what Forex Trading is all about.

Here are some interesting topics to start you off :

• Daily Forex #20 - Can You Really Make Money Trading Forex?
• Daily Forex #13 - Make Your First $100,000 Trading Forex
• Daily Forex #12 - Forex Is Not a Get-Rich-Quick Scheme
• Daily Forex #9 - 2 Main Reasons Traders Fail

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