Forex Trading is always high risk and it takes traders years of experience to be able to consistently profit from Forex Market. If you are a newbie for Forex Trading, how can you be able to profit from Forex Trading in a short period of time?
There are quite a number of ways that can allow Newbie to profit from Forex Trading and it does not need to take years of experience to reach that stage. Here we will discuss 3 main ways for Newbies to profit from Forex Trading.
Managed Fund
This is the easiest way to profit in Forex Trading as you just need to sign up a Forex Managed Fund and hand over your capital for them to trade for you. Most of the time your capital is lump together with other’s capital in a fund and trade by their Expert Traders.
It is important to make sure you find those that are regulated and reliable. It is not uncommon that those funds turn out to be a scam or they just lose all the capital overnight.
You do not need too much knowledge on Forex to invest in the Managed fund but this is also the riskiest way as you do not have control of your account and capital at all. A lot of time managed funds will charge you management fees or even performance fees. All these fees will be taken out from your profit. In that case, you are risking 100% of your capital but for less than 100% of the profit. Eg, if the performance fee is 40%, then you just get 60% of the profit.
Pros
- Easy to setup
- No Knowledge / experience on Forex requried.
Cons
- No control on your account or capital. Eg, you can’t withdraw directly from broker.
- All capital is lump together. No transparency.
- Performance fees or management fees can be high and reduce your profit.
Copy Trading
Copy Trading or also call social trading is another very easy way to profit from Forex Trading without much knowledge on trading or technical analysis. Basically, you can decide to copy trades from an experienced trader and whenever the trader opens a trade, your account will open a trade too. The trading account is owned by you and you have full control of your fund. Some of the copy tradings will also charge performance fees like the managed funds. With copy trading, you do not need to set up VPS (Virtual Private Server), you just need to open a trading account and select a good trader to copy.
There are two types of copy trading – Single Broker copy trading and Cross Broker copy trading. Single Broker copy trading is copy trading within the same broker. One good example is Etoro. Etoro probably is one of the best single broker copy tradings as it allows you to trade fractional shares with no commission. In this case, you can start with small capital and diversify your portfolio easily. The key advantage of single broker copy trading is less slippage in trading while the disadvantage is lesser traders and lesser choice to copy.
Cross Broker copy trading is copy trading across multiple brokers. Few good examples are ZuluTrade and MQL5.com. Both have a lot of traders and have a great ranking system to help you select a good trader to copy. The key disadvantage for Cross Broker copy trading is slippage. Each broker has a different spread and the forex price at the exact moment might have some difference as well. All these will cause slippage during copy trading and it might be causing you to earn less and lose more in certain situations.
If you are interested to copy our trading, refer to Copy Trading for more information.
Pros
- Has more control on your trading account. You can withdraw anytime.
- Require only minimum knowledge to open trading account.
- A lot of trader that you can select to copy.
- Some copy trade only charge monthly fee and no performance fee
Cons
- Might have slippage during copy trading especially cross broker copy trading.
- Select a good trader to copy can be challenging.
- No control at your trades as the trader decide to open and close the trades.
- Some copy trade will charge performance fee.
Running your own Expert Advisor
Running your own Expert Advisor(EA) will require more effort as you need to set up your own VPS and you need to purchase or rent an EA to trade for you. Although these require more effort and knowledge, this will give you the highest chance of profitability and probably open a lot of other possibilities for you. For example, you can have many different EAs to diversify your portfolio.
If you would like to run your own EA and are committed to learning, you can join our Apprentice program, which will give you step by step guide to open your own trading account and set up VPS to run your EA.
Running your own EA is our recommended approach for newbies to start forex trading. We have witnessed many newbies are able to follow our apprentice program and have an extra passive income every month.
Pros
- Full profit and no performance fee
- Full control on your account
- More control on trading as you can stop the EA for trading and start anytime.
Cons
- Require VPS
- Need to buy EA or pay EA license cost
- Require more effort(1-2 hours) and knowlege to setup
Conclusion
Each of the ways will have its pros and cons. However, if you are keen to learn, we recommend you to learn to run your own Expert Advisor as you will have more control and a higher probability to profit.
The following table summarizes the difference between these 3 methods. Happy Trading!
| Ways | Managed Fund | Copy Trading | Running your Expert Advisor |
| Account Ownership | No Control | Full Control | Full Control |
| Charges | Performance Fee | Performance Fee and/or Copy Trade Fee | Expert Advisor Cost |
| VPS | Not Required | Not Required | Required |
| Setup | Easy | Easy | Intermediate |
| Profitability | Lower due to Performance Fee | Lower due to Performance Fee | Full Profit but need to pay EA License Cost |