How much forex traders earn

So, are there any ordinary people just like you and me who become successful forex traders?

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How Much Can You Make From Forex Trading? (2020), how much forex traders earn.

So, you see your trading capital can result in a huge difference in how much you can make from trading forex.

How much can you make from forex trading? (2020)

Last updated on september 8, 2020 by gladice gong leave a comment

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Are you thinking about making money from trading forex?

Is forex trading really profitable?

Are there forex traders really making money consistently, or even make a living from it?

If yes, then the question becomes, can you make money from forex and how much can you expect to make trading forex?

Now, let’s dive in and help you uncover the answers to these questions.

Is forex trading profitable?

So, is forex trading profitable?

The short answer is yes if you have a profitable forex trading system.

Okay, what is a forex trading system?

Also, how do you tell if a forex trading system is profitable or not?

You probably already know what is a forex trading strategy.

A forex trading strategy tells you ONLY when to enter a trade and when to exit a trade.

Let’s look at a hypothetical example of a forex trading strategy.

You buy the currency pair when the price goes up above the 20-day simple moving average on the 1-hour timeframe, and you sell when the price goes down below it.

On the other hand, a forex trading system tells you not just when to enter and when to exit but also what your trading position size should be and how much you can risk per trade.

Basically, a forex trading system shows you how to trade as well as how to manage your risk, so you can trade profitably in the long run.

Let’s say you have a total trading capital of $1,000.

Whenever you get a buy signal, you risk $500 on every single trade.

If you lose, you lose all of $500.

But, if you win, you will make $1,000 on that trade.

So, does this sound like good risk management to you?

When you lose 50% of your capital, you will have to make a return of 100% JUST to recover your loss.

So, if you want to make money trading forex in the long term, you must manage your risk and money well.

Now, let’s look at some real-life examples of profitable forex traders.

Legendary currency trader, george soros, made more than £1 billion from shorting the pound sterling in 1992.

Bill lipschutz, one of the top currency traders in the world, made hundreds of millions of dollars at the FX department of salomon brothers in the 1980s with no previous experience of the currency markets.

Just like me, you might not feel so relatable to their forex trading success.

So, are there any ordinary people just like you and me who become successful forex traders?

In fact, there are some japanese housewives who are very profitable forex traders.

Yes, you read it right – japanese housewives.

When I first read about their story, I was just as shocked as you are right now.

Here’s an article on the times about a japanese housewife who made 1.7 million trading currency and evaded tax on her currency trading profits.

If you have not read the book called ” millionaire traders”, you should definitely read it.

Inside this book, there are interviews with twelve ordinary individuals who transformed themselves into millionaire traders.

One of them, ashkan bolourals is a retail forex trader who made at least $1 million trading forex.

How much can you make from trading forex?

So, exactly how much can you make with forex trading?

This really depends on these three factors:

Trading capital

Leverage

Profitability of trading system

Now, let’s look at each one of them in detail.

Factor #1: trading capital

First of all, your trading capital determines how much you can make as a forex trader.

Let’s just compare these two scenarios:

Scenario #1: you have a trading capital of $1,000

Scenario #2: you have a trading capital of $100,000

Assuming that you are not using any leverage here and your trading system gives you an average return of 10% a year, you will make a profit of $100 a year (or $8/month) with a trading capital of $1,000.

On the other hand, you will make a profit of $10,000 a year (or $800/month) with a trading capital of $100,000.

So, you see your trading capital can result in a huge difference in how much you can make from trading forex.

Factor #2: leverage

The leverage you get from your forex broker can also determine how much you can make trading forex.

And how does leverage in forex trading work?

In forex trading, leverage means the amount of money you can borrow from your broker to trade forex.

For example, if you have a trading capital of $1,000 and your broker gives you a leverage of 1:50, what that means is that you can initiate a trading position worth up to $50,000.

With leverage, you can significantly increase your rate of return on your capital.

But, it can also make you lose your capital much much faster.

So, if you have a profitable forex trading system, then you can take advantage of the maximum leverage to maximize your return.

If you are just starting out trading forex, then it’s wise not to use high leverage.

Factor #3: profitability of forex trading system

Lastly, the profitability of the forex trading system also determines how much forex traders can make.

When it comes to the profitability of a forex trading system, you have to understand this one simple concept – expectancy.

Expectancy basically means how much money you can expect to win per trade by trading this forex system.

To find out the expectancy of a trading system, you must know three numbers:

Win/loss ratio (i.E. A forex trader’s number of winning trades relative to the number of losing trades)

Average size of your win

Average size of your loss

Let’s say the win/loss ratio is 60/40, the average size of your win is $100 and the average size of your loss is $50, then you can calculate the expectancy like this:

Expectancy = win rate * average win size – loss rate * average loss size

Expectancy = 60% * $100 – 40% * $50

So, what does an expectancy of $20 mean?

It means that for every trade you take based on this forex trading system, you expect to earn a profit of $20.

Basically, the more trades you make, the more you can expect to make from your forex trading.

To help you understand this better, let’s look at an analogy.

This is just like a casino.

You all know that the casino is a very profitable business.

The house has a winning edge.

In fact, the casino designs all its games to make sure that the odds are in its favor, so it can expect a POSITIVE profit from each game played inside the casino.

So, the more bets people make, the more money the house will make.

The same can be said about forex trading.

If you have a forex trading system with a positive expectancy, the higher the expectancy and the more trades you make, the more money you can expect to make.

Can you make money from forex?

So, the most important question is, can you really make money from forex trading?

As a matter of fact, up to 70% of retail forex traders lose money trading forex.

It’s simple to get started trading forex, but it’s going to take hard work to master the forex trading game.

If you want to make money trading forex, you just need to have the following:

A profitable forex trading system

Discipline to stick to your forex trading system

The first one is well-understood.

Without a profitable trading system, you are not going to make money in the long run.

The second one is one of the biggest reasons why a lot of forex traders lose money.

Amateur forex traders often let emotions get in the way of their trading.

For example, if the market goes against them, they are likely to revenge trade or refuse to cut their losses.

The difference between a profitable trader and an unprofitable trader is that the former knows the importance of keeping their emotions under control and have the discipline to stick to their trading plan.

Now, if you are serious about trading forex for profits, then you should focus on mastering these two things mentioned above before risking your money.

About gladice gong

Gladice gong is a personal finance writer and stock trader with many years of experience working in the financial industry.

How much money can you make from forex trading – 2020 guide

Millions of people across the globe are trading to earn higher profits. If you are a trader, then forex trading is a common term for you. It is the best way to make vast amounts of money by trading in foreign exchange. The most significant advantage of forex is low fees as compared to others. Both beginners and experienced traders can buy or sell currencies with high profits.

No doubt that you can earn an ample amount of money through trading forex. It is important to learn how to make it. If you want to achieve significantly, then you must trade hard. Check out forexstore to start forex trading. In the following write-up, know the amount of money you can earn via trading forex exchange. There are many factors to earn and calculate money won in trading forex. Let’s begin.

1. Trade more

Many individuals are addicted to trading, like gambling. They buy and sell foreign exchange frequently to earn profits. If you think of trading once and get plenty of amounts, then you are wrong. You have to trade more to collect a significant amount. Now, you might be thinking that there are also chances of failure. Is it best to invest money repeatedly? You must invest more to trade more.

Due to higher chances of wins, you can risk your shares again and again in trading forex. When you trade more, the winning probability is quite high. A beginner can risk with time and circumstances, but an experienced trader must not lose the opportunity at all.

2. Managing risk

Risking huge amounts is one of the trading schemes to get high returns. Remember one thing that there are also possibilities of losing massive amounts. You must trade carefully because it eventually affects your account of trading. Before trading forex, you need to create a strategy with positive output.

Suppose if you are getting $10,000 in your account per year by trading $1000, then it will not be the same each year. You can earn more considerably than expected. Try to trade more in some years to get higher profits. It will not affect your account, and in the end, a trader can count on his massive earned money.

3. Money extraction from your trader’s account

You can operate your trading account for buying or selling foreign exchange. The amount will be stored in your account, and you can either trade more, withdraw or keep it there for adding more interest. Every person earns money to enjoy a satisfying life with luxuries and comfort. Make sure that you debit the required money from your account.

It is essential to keep a certain amount as savings for more trading. The added compound will generate more amount, and later, you can get more money out of it. Therefore, it is a good deal of saving amount for the future. Many traders prefer to do such things for better money management.

4. Determine your expectancy

Trading is about risking money. You can determine the expectancy factor by analyzing your performance while trading. Suppose if you are continuously risking your money, and you are getting profits 2 or 3 times, then you are not a good trader. But sometimes, you have an excellent winning rate by getting profits in the initial trading session.

You need to join the winning and losing rate together to know about your future profits and loss. You can easily create different methods for trading if you determine your rate of expectancy. It will help you in earning money via forex trading efficiently.

5. Trading risk is dependent on currency pairs

An experienced trader is aware of different currency pairs. You can lose some amount while trading a currency pair. A trader must know the current currency rate and then buy or sell it. You need to estimate the winning and losing trade to get enough profits. If we calculate the win rate of the trader, then you must find out the difference between the profitable and loser trades.

The win rate is quite less in case of no or fewer commissions. There is a considerable return on the profit without affecting any previous records. The profit from trading on various currency pairs is different. Make sure that you analyze the current rate before investing your money.

6. Calculate profit from forex trading

There is one way to know the amount of earning money by trading forex. You can calculate all the potential earnings. Before that, you must know certain things about your yearly profits, trading amount, earnings, buying, and selling currency assumptions. It is easy to evaluate the profits if you know how exactly you trade and what strategies you must adopt.

Determining all the factors and calculating profits are the best ways to know the amount of money you can make through trading forex. You can also calculate the average rate of profit that you will earn in an entire year.

The bottom line

Trading forex exchange is not a one-day task to earn a considerable amount. You need to invest and experiment a lot to become a good forex trader. There is no doubt that you can make much money from forex trading. But you have to focus on your performance to prevent yourself from massive loss.

Make sure that you come up with highly-effective trading strategies to get profits frequently. Millions of people worldwide are trading, but not everyone is getting the same results. You must calculate everything from your trading performance to future profits from forex. It will ensure that you are on the correct path or not. After analyzing everything, there will be a scope of improvement in your trading performance.

Make sure that you keep the above things in your mind for better results. Try to start trading by investing a small amount to prevent huge losses. It is better to understand your skills before trading enough money on different exchange currencies.

How much do forex traders make?

By louis H-P on october 10, 2018

How much do forex traders make is a question that many aspiring retail forex traders will ask themselves as they contemplate opening their first trading account. One attraction of forex trading is the forex market requires the smallest amount of capital of any asset class. The fact that it is open 24 hours a day and only closes for part of the weekend means there are many chances to trade. Yet it is impossible to quantify how much do currency traders make as everyone is different. This will not stop us from delving into the subject!

Determining how much do forex traders make

There isn’t a specific formula but a few metrics spring to mind when working out how much do foreign exchange traders make from trading. Trading frequency: if you are trading regularly and making small profits every time. Account size: clearly if you have capital of $1m then the returns will be larger than with $1k! The same applies with the trade size. Finally if you do not withdraw any profits, then compounding will make your money grow faster than you thought possible!

Do retail currency traders actually make money?

The answer is yes some do, but they have honed their skills and made mistakes along the way! Many forex beginner traders will allow the same weaknesses to repeat themselves, leading to poor trades. Psychological weakness is a biggy! Few traders focus enough time and effort on the psychological traits needed to develop the discipline and cold unemotional approach that trading requires. Instead they focus on how much do forex traders make to their detriment.

This is a (trading) business

So run it like it! Your desire to find out how much do forex traders make is probably driven by having heard of other successful traders, yet you cannot compare them to you. How much do traders make from trading depends on many different variables. Everyone is different: each will have different strategies, weakness, capital, trade size etc! Like any business, cash is king so look after it! Do not think this is a get rich quick scheme, but something which you will let grow over time. You will make mistakes, analyse them and educate yourself to the ways of the market. This is no different from any CEO of a company!

Consistent profits

Anyone watching hollywood films such as the big short or the wolf of wall street will think that trading is about making huge bets and earning big dollars in return. Wrong. Retail forex trading is about small trades, where you limit your risk to 1-2% of your portfolio at a time. Most important is making consistent profits, get it wrong and the feedback is instantaneous! You can’t think how much do forex traders make from trading if you are losing it all first.

% profit versus size

How much do forex traders make from trading is not down to how big your FX trading account is, but how successful you are with what you have. If you are making 10% a trade, then you are just as good a trader, whether you placed $1m and made $100,000 or $1k and made $100. Big trades do not necessarily mean big returns but they can mean big losses, which can lead to you blowing up your account! Someone who is regularly earning 10% or even 20% a trade is doing well for themselves!

How not to make money…

Spending too much on costs can easily wipe away your profits. Before trying to work out how much do traders make, it might be an idea to find out how they avoid losing money! Check how much each trade costs, this can be the spread charged or a flat fee. Be careful with other admin costs that brokers will charge. Leverage falls into this area too, not so much if you lose (although that is bad enough) but because of the interest the broker charges you for lending in the first place. These charges add up fast. You might make $$$ from a trade but find out the leverage has eaten into a substantial part of your profit.

You have the advantage…of being small

Believe it or not, there are some trades that the institutional traders will not be able to make. Why? Because these trades are too small! The institutional trader will not be able to deploy the amount of capital they normally would because this would move the market against them. This gives retail FX traders the chance to place their (relatively) small trades in areas where the big boys cannot operate!

Examples of rags to riches traders…

You often hear of traders who have gone from nothing to being billionaires. George soros, the man who broke the ‘bank of england’ is the obvious one. A jewish immigrant who had to survive nazi persecution during WWII, george started with less than many, and is now one of the richest investors in the world. This he achieved by his success with trading forex.

Ingeborg mootz, who only started trading at 83, was virtually broke before she started trading. Yet she was able to increase her capital to near 2 million euros without having a background in finance! Her age, and dare we say it, her sex was often seen as being against her, yet is an excellent example why we should encourage female traders.

Mark huntley has made a HUGE 66% gain on his account whilst keeping the risk low. Even though he started with a small account, that 66% gain would be $666,000 profit if traded with a $1m account! Get the theory and strategy right and there’s nothing stopping you from conquering the world.

Conclusion

There is no one answer as to how much do forex traders make but with a risk-controlled forex trading strategy, it is possible to trade successfully. There are numerous rags to rich stories which all have one thing in common: they didn’t get it right first time. Be prepared to lose some money initially and learn from your mistakes. The examples we have given above should be the inspiration for you to become the latest rags to riches trader!

How much do forex traders make per month?

How much do forex traders make per month? What is the monthly earnings potential of the average forex trader? If you’re reading this article, you’re probably fairly new to forex trading, so I don’t want to misguide you.

In fact, I’m going to tell you some hard truths that you probably don’t want to hear, but they are absolutely necessary to learn if you ever want to become a successful forex trader. Your initial reaction may be discouragement, but there is a light at the end of the tunnel.

Please fight the urge to roll your eyes and move on to something more uplifting. Sometimes the truth hurts, but I will absolutely guarantee that if you don’t listen to what I’m about to tell you, you will NEVER be a successful, long-term forex trader.

So how much do forex traders really make per month?

This question is a little misleading for a couple of reasons:

Most forex traders are not profitable

No profitable trader in any market makes the same percentage of profit each month

These are the questions you NEED to ask:

Why are most forex traders unprofitable?

Despite what you may have heard about how easy it is to make money in the forex market, the truth is that most traders fail. It is also true that you will probably fail at trading, but you don’t have to. The real reason traders fail is probably not what you think.

This is why traders actually fail:

Greed

Most new forex traders have unrealistic profit expectations. They think it will be possible to make 25% – 50% or more month to month. They have dreams of turning their small account into a very large account in just a few years.

This is totally unrealistic. If it were possible we would all be doing it. Most successful traders make a much lower average monthly profit (3%-7% is common). If you’ve averaged 10% or better for more than a year, you’re a rockstar in the trading world.

Take this into consideration:

If you could sustain a 10% average monthly gain, you would more than triple your account every year.

By averaging 6%, you would more than double your account every year.

Starting with $5,000, and averaging only 3% per month, your account would grow to over $170,000 in 10 years.

Warren buffet became a billionaire trader averaging only 30% per YEAR!

I’m not saying it’s impossible to make 25% or more in a month. I’ve done it, and many others have done it. I’m saying its impossible to MAINTAIN such a high average monthly gain. In order to shoot for such a high goal, you will be pressured to take bad trades, overtrade, and overleverage (which brings me to my next point).

Overleveraging

Poor money management is one of the worst account killers for new traders. This goes back to greed, because traders typically overleverage while shooting for unrealistic profit targets.

You should be risking a small percentage of your account on each trade, and you should be risking the same amount on each trade. I recommend never risking more than 2% per trade. Many successful forex traders risk 1% or less per trade, and some very successful and experienced traders risk 3%.

Risking more than a small amount per trade is a death sentence for your trading account because all trading systems go through periods of drawdown. If you’re risking too much during one of these periods, you will, at least, wipe out much of your progress, if not completely wipe out your account.

Consider these two examples:

If you lost 10 consecutive trades, risking 2% per trade, your account would be down about 18%. You would need to earn about 22% of the remaining account just to get back to your starting balance.

If you lost 10 consecutive trades, risking 10% per trade, your account would be down by more than 65%. You would need to earn nearly triple the remaining account (187%) just to get back to your starting balance.

Not only does responsible money management help preserve your capital during losing streaks, it also helps to keep you trading your edge mechanically. That’s because losing 1% or 2% on a trade does not sting nearly as much as losing 5%, 10%, etc….

It’s easier to deal with the losses, psychologically speaking. You’re more likely to pull the trigger on the next trade, and let your edge work itself out over time. And that’s exactly what you need to do, if you know you have a profitable trading method working for you.

Insufficient testing

I cannot stress this point enough. Testing is the backbone of a successful trading program. Most new traders are too impatient and undisciplined to thoroughly test new strategies. I think this, again, goes back to greed, because we all want to fire our bosses as soon as possible. You want to get that account snowballing quickly, but this is a costly, rookie mistake.

The problem is that, without sufficient testing of your trading system or any new trading setup, you’re not going to know how it will hold up during changing market conditions. You need to know if your trading system can stay profitable through increasing/decreasing volatility, growing/shrinking average daily range, impactful news events, etc….

I would not even consider a new trading strategy unless it had proven itself to be profitable after, at least, a couple hundred backtesting trades – either through my trading platform or using a backtesting software, such as forex tester 3.

Next, I would forward test (with a demo or micro account) the new strategy for, at least, a few months. The more time you spend doing this the better off you will be down the road because you will have absolute confidence in a system that has proven to be profitable over time.

Knowing exactly what your system is capable of, and proving to yourself that your trading system is profitable over months or (preferably) years worth of different market conditions will go a long way in helping you to mechanically trade the edge that your system gives you – even when you’re experiencing a losing streak.

Lack of discipline

I’ve mentioned discipline a few times already, and it’s an import factor in profitable trading. It’s another psychological aspect of trading that can either make you or break you. Most new traders lack discipline in every aspect of their trading, from testing to execution.

It takes discipline, as well as patience, to properly test a new trading strategy. Most traders don’t have the discipline to do any manual backtesting at all. They simply learn a new trading method, and demo trade it for a week or two, or worse, they go straight to live trading.

It takes discipline to keep trading when you’re losing. If you’ve done your due diligence, then you already know for sure that you’re trading a consistently profitable trading system. With discipline, you will be able to keep pulling the trigger on the next trade and let your edge play out over time.

Sometimes you just have a bad feeling about a trade, although it meets your criteria. It takes discipline to mechanically trade every setup that comes along, but it’s a must. As soon as you start trading subjectively, you’ve abandoned your edge and you’re gambling.

Note: there is limited room for some subjectivity in some aspects of trading when you become much more experienced, but you should strive to trade as mechanically as possible even then.

Lack of discipline can also lead you into catastrophic behaviors, such as overleveraging (which I mentioned above) and revenge trading. Revenge trading is when you re-enter the market because you’re trying to earn back money that you’ve just lost – not because your trading system has provided another quality entry trigger.

Overtrading could be mentioned in the same breath. Successful, disciplined traders trade less, because they only take the best trade setups. They have the discipline to wait for the market and their trading system(s) to provide them with quality setups, rather than trying to force bad setups to meet some unrealistic profit target.

System hopping

If you’re a new forex trader, it’s absolutely necessary to find a consistently profitable trading system to start testing. As of right now, there are three profitable trading systems reviewed on this website that I have personally traded and recommend. However, I mostly use day trading forex live now.

Note: read my full reviews of these trading systems to see which one will fit your trading style and schedule, as each of these systems are completely different.

If you’ve been trading for a year or two, the truth is that you’ve probably already traded a few profitable trading systems. You just were not confident enough in them, or disciplined enough to let their edge play out over time.

You probably didn’t test long enough, started trading your hard earned money, lost a bunch of it, blamed the trading system you were using, and moved on to the next system. This is a constant, destructive cycle that a large majority of unsuccessful traders are trapped in.

There is no “holy grail” in trading. The point is to find a system that makes sense to you, and test it to see if it actually works. Just as importantly, you need to test it to prove to yourself that it will be profitable in the long term.

You’re looking for something that will provide you a verified edge in the market. You need to have an unwavering belief in the trading system that you are using. Once you do, you simply have to continue to trade the edge that your system provides for you with discipline.

Many traders unwittingly give up on profitable trading systems because they don’t trade them long enough, or with enough discipline, to let the edge work out for them. Even the best traders in the world lose lots of trades, but they have the discipline to let their edge play out.

What is a realistic average monthly profit expectation for a successful trader?

This question is more in line with the way you should be thinking, although its answer may be just as discouraging: it depends on the trader, their trading system, the market, etc….

Successful traders simply trade the edge that their trading system(s) give them, and take what they can get. They don’t set goals and they don’t force trades to meet those goals.

A really good year for a successful trader might look like this:

January +5%
february -2%
march +9%
april +12%
may +3%
june +9%
july +15%
august +20%
september +7%
october -4%
november +5%
december +5%

A trader with this record, if no money was withdrawn from the account along the way, would have earned over 120% – more than doubling their starting balance! Their average monthly profit percentage would be 7%.

Even as I’m writing this I can picture the amateur traders saying to themselves, “that’s not enough! I’ll never be able to do this for a living at that rate.” that is greed and impatience doing what they do to every inexperienced trader.

You could make more than what is depicted in the example above, but if you don’t change your attitude and expectations, you will most likely make much less. Instead of asking yourself, “how much can I make per month as a forex trader?” you should be asking yourself, “am I willing to do what it takes to become a successful forex trader?”

Are you still looking for a profitable trading system? I recently changed my main trading system after testing a new one for over a year. Come see why I switched to day trading forex live.

Can forex trading make you rich?

Can forex trading make you rich? Although our instinctive reaction to that question would be an unequivocal "no,” we should qualify that response. Forex trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, rather than being an easy road to riches, forex trading can be a rocky highway to enormous losses and potential penury.

But first, the stats. A bloomberg article in nov. 2014 noted that based on reports to their clients by two of the biggest forex companies at the time—gain capital holdings inc. (GCAP) and FXCM inc.—68% of investors had net losses from trading currencies in the prior year. While this could be interpreted to mean that about one in three traders does not lose money trading currencies, that's not the same as getting rich trading forex.

Key takeaways

Many retail traders turn to the forex market in search of fast profits.

Statistics show that most aspiring forex traders fail, and some even lose large amounts of money.

Leverage is a double-edged sword, as it can lead to outsized profits but also substantial losses.

Counterparty risks, platform malfunctions, and sudden bursts of volatility also pose challenges to would-be forex traders.

Unlike stocks and futures that trade on exchanges, forex pairs trade in the over-the-counter market with no central clearing firm.

Note that the bloomberg numbers were cited just two months before an unexpected seismic shock in the currency markets highlighted the risks of forex trading. On jan. 15, 2015, the swiss national bank abandoned the swiss franc's cap of 1.20 against the euro that it had in place for three years. as a result, the swiss franc soared as much as 41% against the euro on that day.

The surprise move from switzerland's central bank inflicted losses running into the hundreds of millions of dollars on innumerable participants in forex trading, from small retail investors to large banks. Losses in retail trading accounts wiped out the capital of at least three brokerages, rendering them insolvent, and took FXCM, then the largest retail forex brokerage in the united states, to the verge of bankruptcy.

Unexpected one time events are not the only risk facing forex traders. Here are seven other reasons why the odds are stacked against the retail trader who wants to get rich trading the forex market.

Excessive leverage

Although currencies can be volatile, violent gyrations like that of the aforementioned swiss franc are not that common. For example, a substantial move that takes the euro from 1.20 to 1.10 versus the U.S. Dollar over a week is still a change of less than 10%. Stocks, on the other hand, can easily trade up or down 20% or more in a single day. But the allure of forex trading lies in the huge leverage provided by forex brokerages, which can magnify gains (and losses).

A trader who shorts $5,000 worth of euros against the U.S. Dollar at 1.20 and then covers the short position at 1.10 would make a tidy profit of $500 or 8.33%. If the trader used the maximum leverage of 50:1 permitted in the U.S. (ignoring trading costs and commissions) the profit is $25,000, or 416.67%.

Of course, had the trader been long euro at 1.20, used 50:1 leverage, and exited the trade at 1.10, the potential loss would have been $25,000. In some overseas jurisdictions, leverage can be as much as 200:1 or even higher. Because excessive leverage is the single biggest risk factor in retail forex trading, regulators in a number of nations are clamping down on it.

Asymmetric risk to reward

Seasoned forex traders keep their losses small and offset these with sizable gains when their currency call proves to be correct. Most retail traders, however, do it the other way around, making small profits on a number of positions but then holding on to a losing trade for too long and incurring a substantial loss. This can also result in losing more than your initial investment.

Platform or system malfunction

Imagine your plight if you have a large position and are unable to close a trade because of a platform malfunction or system failure, which could be anything from a power outage to an internet overload or computer crash. This category would also include exceptionally volatile times when orders such as stop-losses do not work. For instance, many traders had tight stop-losses in place on their short swiss franc positions before the currency surged on jan. 15, 2015. However, these proved ineffective because liquidity dried up even as everyone stampeded to close their short franc positions.

Day trader salary - learn how much top traders earn

Day trader salary

You’ve heard the stories; you’ve heard of the growing popularity of forex; you’ve done your research and are now ready to become a forex trader.

What appealed to you in the first place are probably the many advantages of forex trading, including:

Accessibility

No commissions/exchange fees or government fees

Low transaction costs

Works 24-hours, 5 days a week

You can use leverage to enhance profits

High liquidity

Not controlled by government/banks

Etc.

Those sure are some attractive aspects of forex trading and have drawn a large number of new traders over the past years. All of the above-mentioned characteristics and more contributed to the forex market becoming the largest and most liquid market in the world with an average daily volume of trading exceeding $5 trillion.

The size and depth of the forex exchange market is what makes it an ideal trading market.

Today, we want to specifically talk about day traders and try to answer essential day trading questions including what day traders do, how to get started with day trading and, of course, the most important question of them all - how much money can I earn from day trading?

Every trader is in it for the money. The question is how do you become an efficient day trader? And how can you benefit from the market?

The answer to these questions is simple: get a proper trading education!

We can help with that.

Before talking about day trading, how to become a day trader and what is a day trader salary , we want to talk about trading education and how we help beginner traders on their new and thrilling trading adventure.

Trading education offers a beginner’s guide to forex trading to the traders of tomorrow. Our course is easily accessible once you apply on our official website: “the ultimate guide to forex trading ”.

Let’s go back to day-trading and talking a little bit more about day trader salary.

What is day trading?

First thing you have to know about day traders is that they make money by buying commodities, stock or in our case currencies (or any other tradable securities) and hold them for a short period of time (from a few minutes to several hours) before once again selling them off.

The goal is to make a profit from short-term price fluctuations. To do so, day traders enter and exit positions throughout the day, rarely holding positions overnight.

Basically, forex day trading is buying/selling instruments only within the same trading day.

To be a successful forex day trader, you need to have a solid amount of capital and a great deal of knowledge. That’s not news, though. It’s something you should be very well aware of if you are interested in becoming an efficient trader.

One more thing you should always keep in mind is the risk.

Having a decent amount of capital and a good amount of knowledge doesn’t necessarily mean that you will succeed. Sometimes prices fluctuate enormously during the day and you might end up losing a lot, especially if you forget to use a stop-loss.

One of the best professional traders, david green, for instance, always advises against risking more than 1% on a trade, depending on the size of your portfolio. If you stick to the 1% risk strategy, set up your stop-loss and profit taking points, you have the key to managing your risk and limiting your losses.

Day traders use leverage to get more financial power and larger profit possibilities. Forex day traders leverage their capital in order to obtain an asset and then sell it when the price of the asset changes in a positive direction.

Day traders are usually looking for a day trading currency that is highly liquid.

Some of the major currency pairs that traders consider the best choice (since they have the highest trading volume) are EUR/USD currency pair. The reason why it’s so advisable to focus on this particular currency pair is that its price fluctuates a lot and it usually has the best trading conditions, especially for beginners.

Though, as we already know, using leverage is very risky and beginners should be very cautious of using it or, in fact, not attempt this strategy at all.

How to start day trading?

The first thing we want to say is that day trading is definitely not a get-rich-quick scheme and if you are in it for a quick buck you better step back.

Everyone agrees that day trading is a very risky activity and should be approached only if one has the knowledge and a clear understanding of all those risks.

Let’s talk about what are the necessary qualities a successful day trader should have:

Capital requirement

Capital is the most important thing to a trader. The way a trader operates it (how much you have, how you distribute it, etc.) will basically determine his final income.

Forex day trading doesn’t have a legal minimum, meaning you can start with as much as $500. However, if your goal is to produce a good monthly income, it’s advisable to start with $5,000.

Day traders are looking for more return, in comparison to the regular sizes that traders usually achieve. Therefore, a large amount of capital with a suitable risk/reward ratio is definitely what day traders need.

Market knowledge and experience

We’ve already mentioned it but let’s talk about it again. If you want to become a successful day trader, you must have a complete knowledge and understanding of how the market works and be able to keep an eye on and quickly analyse both fundamental and technical indicators.

Ultimately, practice is key to day trading. Practice your strategy.

Some experts or websites will probably advise you to start with a demo account before risking your money. We, at trading education, however, think that this might not be the best idea. A demo account can’t possibly emulate the true emotions and pressure you will feel if trading with your real money. Thus, it will you will never be trulyprepared for the high-risk forex trading environment.

Discipline and a well-formulated strategy

In day trading, discipline is everything.

You have to be aware of all price movements and not make any hasty trading decisions. Monitoring prices requires a lot of discipline.

In addition to discipline, you have to adopt one (or more) strategies that work for you and will maximise your profits (and naturally minimise your losses.)

Market conditions change every day. Therefore, a day trader needs to adjust their techniques and strategies accordingly. A creative mind is also something a day trader should have in order to succeed in trading forex.

Important to remember:

Day traders risk their own capital every single day to make the profits they strive for. Day traders need to be focused, flexible and knowledgeable. In addition, they need to be using the right broker, do a lot of research and last but not least, log their trades and keep a trading journal.

Traders need to weigh in all these aspects and decide for themselves if they are up for the task. Day trading surely is no joke or a way for them to get rich overnight.

Let’s talk about day trader salary and how much can a day trader make.

Most day traders are not particularly keen on disclosing their trading results to everyone out there (except the maybe tax authorities if outside the UK), therefore an exact answer to how much money an average day trader makes is kind of difficult to answer.

It’s impossible to give an exact answer because the results vary depending on the strategies a day trader uses, the risk management techniques and, of course, mostly on the starting capital each individual trader works with.

For example, if you start day trading with $500, your earning potential would be much less than someone else who will start day trading with $50,000.

An article by forex day trader cory mitchell says that if on average, you make around 100 trades per month (that’s approximately 5 trades per day/20 days per month) and your starting capital is $30,000, you can make around $3,750. Of course, you do have to pay commissions and other fees.

In this example, you are likely to end up with a net profit of $2,750 once you deduct your commission costs.

In the end, since you started with $30,000, your monthly return will be over 9%. Reinvesting in those profits will bring you even higher yearly profits.

The best thing about everything - you don’t even have to get suited up for work.

However, keep in mind that as good as those results sound, everything is too subjective and depending on the current market conditions. We can’t simply come up with a list of things you have to do and the amount of money you have to start with or how many trades per day/week you have to make to win a certain amount of money.

Keep in mind that forex is a dynamic marketplace and things can change in a blink of an eye. Nothing and absolutely no one can guarantee that you will be the trading millionaire you strive to be.

There are myths and then there is the reality.

Some studies point out that only around 1% of day traders actually make a profit at the end of the year.

Ultimately, this is not news to us. The percentage of traders who lose money is higher than the percentage of those who make money. The whole idea is to make more profits than losses, not to completely eliminate losses.

It is quite easy to lose money day trading (the reason why we have been talking about the importance of trading education throughout this whole article.)

How much time you put into trading is also important. If you want your income to be consistent (meaning you have a good trading plan and the resources, such as time and capital, to implement it), it will take you around one year or so, if you are willing to dedicate yourself full-time to day trading. If you plan on practising day trading only part-time, it might take you a number of years to develop a consistent strategy and end up with satisfying and steady returns.

Ultimately, how often you trade is determined by your trading strategy. If your strategy is making, let’s say, 70% winning trades. Skipping day trading many times will result in skipping winning trades (70%) than the losing trades (30%). Try to find the balance.

One more thing that we should consider is that day traders can also incur relatively high fees from the transaction costs.

Last but not least, another important factor that can certainly influence your earnings potential, as well as your future career is whether you choose to trade independently or for an institution/band or a hedge fund. Of course, if you work for an institution, you are not technically risking your own money and they are way better capitalised. Not just that but big financial institutions have access to beneficial information and various tools.

Day traders have to pick the right broker, utilise a successful strategy and a good risk management plan. All these things can affect the final income results.

Future career opportunities and bottom line

You have to think about career longevity and how determined you are to turn day trading into your future career.

However, it would be somehow wrong to think of day trading as a hobby or activity that you can just do every once in a while.

If you want to succeed, you have to be serious about it.

Yes, predicting your average rate of return over a specific period of time maybe somehow difficult; there are also no guarantees that you will make money.

However, there are strategies and techniques you can study that will minimise your losses and help you progress.

We want to yet again emphasise on how important it is to learn discipline , patience and risk management techniques if you want to become a successful day trader.

Many people say that forex day trading is for those who have great experience and who should consider doing it only full-time.

Others claim that day trading is one of the best ways to make money in no time and it prevails over any other type of trading.

We are not saying one is right and the other one is wrong.

Whatever the case may be, day trading has its pros and cons and there’s one thing we can agree on - it’s only effective for those who are eager to learn and commit a lot in order to end up succeeding.

Day trading will put to test your stress, emotional intelligence, discipline, willingness to improve, confidence and skills.

If you are ready and understand the risks, we at trading education can help you achieve your goals.

“ the ultimate guide to forex trading ” course application is now open and we welcome future forex traders aboard.

Further reading:

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How much do forex day traders really earn? The answer may shock you!

Ever considered becoming a full-time trader? Ready to quit your day job? Many people dream about becoming a day trader, but most are too worried that they wouldn’t make enough money to walk away from their 9 to 5 jobs. Others might hear stories of day traders making insane amounts of money but assume that those are extreme cases. In this article, we will outline what makes day trading so appealing and explore how much one could actually make day trading.

First, we’ll start off with the perks of day trading. One of the main draws is the ability to choose when one does and doesn’t work, although you’ll need to put in some weekday hours to make a profit. Many day traders start at the beginning of the day and close all their trades out before the end of the day, rather than allowing them to carry to the next trading day. Once all your trades have been closed for the day, you can sit back and relax without worrying about work. There are several other perks:

The government won’t tax your ‘paycheck’ because your profit will be made purely from trading. Of course, your broker will charge commission fees and spreads in addition to other potential fees for withdrawals. Still, this will probably come out to be far less than the tax cuts you’ll see with a regular paying job.

One of the things that make day trading so great is that you get to be your own boss. Gone are the days where you must play nice with a stressful boss standing over your shoulder. You can take breaks whenever you want or eat lunch while you work, you make your own rules.

You get to work from home. There’s no need to get dressed, take a shower, or deal with a daily commute. You can work at home, in your pajamas, without having to socialize with anyone.

Day traders don’t have to worry about overnight risks or swap fees because trading positions are closed on the same trading day. Other traders need to account for these charges.

Full-time day traders have more time to focus on trading since they don’t have an actual job to worry about. You can spend more time analyzing charts and data, reading trading articles, and so on. There’s also more opportunity to practice strategies like scalping, which require a lot of attention. Part-time traders just don’t have the time to do all these things daily.

If this sounds like a dream job, you’ll need to know that becoming a full-time trader takes work and dedication. Perhaps you’re already a part-time trader, or you might be starting from scratch. Either way, you’re in the right place. Becoming a day trader takes effort and you’re trying to figure out if it is worth your undivided attention.

So, how much do day traders really make? First, you need to understand that there are risks involved with this kind of trading. It’s good to have a cushion to fall back on in case of a bad day. Prices fluctuate a lot on any given day and it’s always possible to lose money – this is where a regular job is better than day trading. Traders aren’t guaranteed to make the same amount every week because it isn’t as stable as working. Some professionals advise that you should never risk more than 1% on any trade and you should always use a stop loss to help minimize your losses.

The amount that you make will depend on how much capital you invest. Someone who puts $5,000 into their trading account can make larger trades than someone with just $500, assuming both traders understand what they’re doing. If you don’t have a lot to start with, that’s ok, but you will want to invest more as your capital builds up over time to come away with enough profit to support yourself. Knowledge is another key to success with day trading – you can never do enough research, analyze enough charts, or get enough practice. Even the absolute best of traders can always learn something new, so be sure to take advantage of all the free resources available on the internet. A good strategy is essential for successful day trading, especially one that minimizes the losses one might make.

Day trading takes time and determination, it isn’t a get rich quick scheme or something that will make you a millionaire overnight. It’s impossible to give an exact figure of how much you’ll make because factors like your starting capital and risk-management strategy will change those results.

Here’s one example from an article written by day trader cory mitchell:

If you start with $30,000 capital and you make around 100 trades per month (about 5 trades a day over 20 days a month) you could make around $3,750 minus any commissions or other fees charged by your broker. You would walk away with something like $2,750 after all deductions are made.

Keep in mind that this example revolves around a $30,000 beginning deposit. If you don’t have that much to invest, you’ll make less. Over time, the idea is that the trader would begin to bring in more profit and could therefore make larger trades and earn more per month. It would be a good idea to save up more before quitting your regular job so that you can invest more in the beginning.

Day trading can be an excellent alternative to working a 9 to 5 job, and it comes with great benefits. Nothing beats being your own boss and setting your own hours. However, this isn’t something one can learn overnight. If it were easy, everyone would do it. Our best advice is to practice and educate yourself fully before even thinking of trading full-time. When you’re ready, make sure that you have a cushion to fall back on and consider your initial investment. Everyone needs a different amount of income to survive – so be sure that you will make enough money to support yourself or your family and to pay all your bills before becoming a full-time day trader. Try to have a safety net to fall back on in case you don’t make as much as you thought at first.

How much do forex day traders really earn? The answer may shock you!

The government won’t tax your ‘paycheck’ because your profit will be made purely from trading. Of course, your broker will charge commission fees and spreads in addition to other potential fees for withdrawals. Still, this will probably come out to be far less than the tax cuts you’ll see with a regular paying job.

One of the things that make day trading so great is that you get to be your own boss. Gone are the days where you must play nice with a stressful boss standing over your shoulder. You can take breaks whenever you want or eat lunch while you work, you make your own rules.

You get to work from home. There’s no need to get dressed, take a shower, or deal with a daily commute. You can work at home, in your pajamas, without having to socialize with anyone.

Day traders don’t have to worry about overnight risks or swap fees because trading positions are closed on the same trading day. Other traders need to account for these charges.

Full-time day traders have more time to focus on trading since they don’t have an actual job to worry about. You can spend more time analyzing charts and data, reading trading articles, and so on. There’s also more opportunity to practice strategies like scalping, which require a lot of attention. Part-time traders just don’t have the time to do all these things daily.

Here’s one example from an article written by day trader cory mitchell:

How much money can you make from forex trading?

The question of how much money you can make currency trading is a big one that is asked online quite often, so much so that I decided to write an entire 2,000+ word article on it.

See, while this question is incredibly broad, the money you can make from trading forex can be estimated depending on how much money you have, the leverage you’re using, etc.

So, how much money can you make from forex trading?

You can make anywhere from hundreds to thousands of dollars a day trading forex; the bigger your bankroll and equity, the more you can invest therefore the more profits you can reach. While there are plenty of forex traders who do very well, the reality is that most forex traders lose money.

The answer to ‘how much money can you make from forex trading’ is unlimited amounts of money, although perhaps the better question is ‘how much money will you make from trading forex?’

So, how much money can you make with forex trading?

There is no way to predict exactly how much you should make each day in forex trading. The key is to set earning goals that are realistic for your economic situation, how much time you have to invest, your skillset, etc.

Obviously, the better you get at trading forex, the more money you will make. This statement does not come without a warning; as mentioned previously (and many times on this site), most forex traders fail.

The answer to ‘how much money can you make from forex trading’ is unlimited.

Yes, most forex traders come out with negative results.

That said, there’s no reason to get scared if you are willing to put the time and effort into learning how to trade forex.

With the right resources and practice, it is entirely possible to make a full-time living solely off of forex trading (and you don’t have to be rich, either!)

People are drawn to forex for reasons such as:

Forex requires a lot less starting capital than stock trading (or other investing)

You can trade forex 24 hours a day, 5 days a week

Forex is extremely volatile, which means you have the potential to make a much greater return on your investments (compared to other financial investing)

There are a large variety of strategies and methods you can utilize to trade forex, and you will likely find one that works for you

For these reasons and more, forex is seen as an attractive option to make some money online – however, because forex is so volatile and there is an opportunity to make so much money, you can also lose substantial sums of cash.

As long as you have a realistic view of the dangers of forex trading, you can focus on avoiding these risks and achieving the success that so many others have found with currency trading.

This post will answer the following questions:

How much do forex traders make?

How much do forex traders make a day?

How much do professional forex traders make?

How much do professional forex traders make A day?

How much money can you make trading forex?

How much money do I need to start forex trading?

This article is intended to provide a practical depiction of how much the average forex trader can expect to make, and also how much professional forex traders usually make.

Also, I hope this post can put to rest some of the fantasies you may have about forex trading, thanks to the faux-marketing and forex scams out there. Unfortunately, a 20% return is not doable every single month – any system or ‘forex robot’ claiming otherwise is lying to you.

Use these answers as inspiration and goals to work towards – with the right amount of hard work and dedication, anyone can reach these levels of success.

How much do forex traders make?

The average forex trader can expect to make no more than 5% of your account size back every month.

So, if you happened to have a great month and you gain 5%, that means:

If you trade with $10,000, you made $500.

If you trade with $5,000, you made $250.

If you trade with $1,000, you made $50.

Not to worry – many great forex traders grow their bankroll over time and eventually get to a point where they have an account with hundreds of thousands of dollars.

Bill lipschutz, one of the top forex traders out today, started trading with $12,000

Ed seykota started trading with $5,000

Randy mckay started trading with just $2,000!

Becoming a successful trader is a process, not an overnight occurrence; if you aren’t coming into the forex game with heaps of money, it will take some time before you are one of the big dogs.

Obviously, how much money you can earn in forex trading varies greatly, and the amount of money you do make will change every single month – you might have a fantastic month, turning profits of 30%, just to lose 40% your next month.

This is where strategy and proper risk management comes in – although leverage in forex is great, you do have to proceed with caution if you hope to stay in the game for the long run.

Keep your risk low (especially when starting, don’t risk more than 1% of your capital ever), and make trades that have great risk/reward ratios!

How much do forex traders make A day?

If the average forex trader makes about 1% to 5% a month trading, then following this logic, this works out to returns of 0% to 0.15% a day.

The question of ‘how much do forex traders make a day’ is especially broad – while everyone likes to come out profitable every single day, this is just not how it works.

The goal is to be profitable overall, which means at the end of the month (or any span of time) you want to be up.

If you are trading long-term, you will have some bad days.

All you can do is keep going and trading according to strategy, aiming to be profitable over the long-term.

There is no set amount of how much forex traders will make in a day, although it’s not uncommon for certain traders to have daily goals they try to hit.

Now that you are familiar with how much money forex traders make and how much money forex traders make in a day, let’s take a look at how much money professional forex traders make.

How much do professional forex traders make?

Professional forex traders can make a 5-10% return on their capital monthly – the catch is that their accounts are usually huge, well over a million dollars, so that a 10% return can mean hundreds of thousands of dollars every single month.

Obviously, as with all forex trading, the returns will vary widely – even professional forex traders have off months, and then spectacular months where they make up to 50% of their capital back!

Use these big returns as motivation to keep growing your forex trading account.Use these big returns as motivation to keep growing your forex trading account.

How much do professional forex traders make A day?

While we all wish we could have as successful a day trading forex as george soros once did, this is unlikely to ever occur.

That said, there are some professional forex traders who are making heaps of money every single day (think more returns in a day then you have in your entire account!)

Speaking conservatively, a professional forex trader can expect to make anywhere from 0% to 1% of their capital.

1% of $10,000,000 is $100,000.

Obviously, these are just hypotheticals – but there are certainly some forex pro’s out there making this kind of money.

Again, use this as motivation to keep moving forward! Everyone has to start somewhere.

How much money can you make trading forex?

I hope this post gave you an idea of how much both the average and professional forex trader might make – it’s worth mentioning again that these numbers vary greatly, and I’m sure there will be some people who read this post will disagree strongly (feel free to leave a comment)!

Every forex trader uses a different forex strategy and has different approaches to trading; because of this, questions such as ‘how much money can you make off forex trading?’ are hard to provide a concrete answer for.

If there was one specific strategy for forex trading that worked, every single trader would be successful – obviously, this is not the case.

In order to reach the levels of success that many average and professional forex traders have obtained, you need to create realistic goals and have legitimate grasps of risk/reward ratio, risk management, money management, stop loss, etc.

Risk management is arguably the most important part of forex trading – this is how you stay in the forex game for years to come.

If a forex trader is making crazy 20% returns, that means they are probably risking much more of their capital then they should.

Remember, the key is long-term growth and success.

Utilizing proper risk management is how you stay afloat for years to come and is how you can live off of trading forex full-time!

How much money do I need to start forex trading?

How much money do you need to trade forex? It depends.

As I mentioned earlier, some of the most well-known forex traders today started with accounts of just a few thousand dollars.

This puts to rest the idea that you need to already be rich in order to make big enough returns on currency trading – this is simply untrue.

Not only myself but many of my friends and colleagues started trading part-time with just a few thousand dollars and grew it to accounts of hundreds of thousands of dollars.

So, how much money do you need to trade forex? As much as you have.

If you only have $500, fine – go for it. You certainly won’t make enough to go full-time, but over time you can grow it into something substantial.

That said, I do recommend having at least a couple grand – $2,000 – which I think is the sweet spot for starting trading. While this isn’t enough to quit your day job and trade the forex markets full time, this is enough to get you started and has been proven to be enough to grow into a big-time successful account.

Just make sure that however much money you’re investing in currency trading, you can afford to lose it.

If you do want a chance to make returns on your investment and not lose your money, you must take the time to learn how to properly trade forex and make profitable trades.

Learn to trade forex

Figuring out the best strategy for you is the key to trading forex successfully – if you don’t know any strategies or simply want to learn how to trade forex, definitely make sure to properly educate yourself before investing any real money into the markets.

For those who want a program that will teach you everything you need to know to get started in forex and more, go read our post on a mentorship program that is both valuable and affordable.

Also, if you haven’t already, make sure to grab our free forex trading fortunes PDF – enter your details below to get your copy sent straight to your email today!

How much money can you make from forex trading?

You can really make an unlimited amount of money from forex trading, although typically, anywhere from 1% to 10% returns on capital are expected, per month.

How much do forex traders make?

The average forex trader will usually make no more than 5% returns on their capital, per month.

How much do forex traders make A day?

The average forex trader will usually make anywhere from 0% to 0.15% returns, per day – the number varies.

How much do professional forex traders make?

Professional forex traders usually aim for 5% to 10% returns on their capital, per month.

How much do professional forex traders make A day?

Professional forex traders make up to 1% a day returns, give or take. The number varies.

How much money do I need to start forex trading?

The number varies; you can start with $100 or $1,000,000 – the more money you have, the more profit you can make.

I’m a full-time forex trader, happily making money from the comfort of my own home.

I help others find financial freedom and success with forex trading.

So, let's see, what we have: gladice gong is a personal finance writer and stock trader with many years of experience working in the financial industry. At how much forex traders earn