How Much Do Forex Traders Make a Day
The Forex market is another form of the foreign exchange market. It is the process of exchanging a currency into other currency for several reasons, might be for trading, or tour. According to some recent reports from the Bank for International institutes, the turnover of the Forex market is currently at more than $5.1 trillion.
In the next section, we will see the basics of the Forex market including the elements of it. Therefore, you would know how overall activity in this market occurs and how you can make a benefit from the foreign exchange market.
It is a common question that traders ask in our TheForexSecret team regarding how much do Forex traders make a day.
Do you know you can earn the amount from forex trading, which is not possible by doing 9 to 5 jobs?
The Forex market is the world’s biggest financial market, with a daily turnover of 6.6 trillion US dollars.
Therefore, the amount that you can make from trading in this market is enormous compared to the other market.
But, how much money can you make from forex trading?
To unlock the answer, read the full article.
Making money from the forex market is a process in which traders should make decisions based on knowledge and experience.
There are numerous trading strategies in the world, and you have to choose the right one for you.
What is the right trading strategy?
Among thousands of trading strategies, you should pick the right trading strategy that suits your personality.
Based on the trading duration, we can distinguish trading strategies in three categories:
- Scalping: In this trading strategy, traders take a lot of trade in a day. Therefore, it requires a lot of effort and time.
- Swing Trading: several trades in a week. It requires regular monitoring of the price.
- Position trading: It is similar to investing where you take a trade based on a long term outlook. After making an analysis, you don’t have to pay attention to the trade-in weeks or months.
The right trading strategy depends on your available time.
For student and jobholder, swing trading is perfect, while for full-time traders, scalping is good.
How Much Money Can a Forex Trader Make a Day?
Ok, we will unlock the answer here, but the thing is not as simple as people think.
In forex trading, traders have to invest in their trading accounts and take trades based on their equity.
If the equity is significant, the return will be big also.
Let’s say you know Forex trading well and invested $500 in your trading account and took all trades in 0.02 lot size.
After a month, you made 800 pips with $160 (800X0.02) profit.
On the other hand, your friend invested $100K in his trading account and followed your trade.
At the end of the month, your friends earning is at $16000 (800X2).
So, who made higher profits?
Look carefully, you and your friend made some profit, which is 800 pips.
However, your friend’s profit in the dollar is higher than you as his investment is bigger.
So, the first thing is that your profit depends on your investment.
#1 Trading Strategy
Besides the investment, a trading strategy is also a valuable tool to determine how much a forex trader makes a day.
The return will be higher if your trading strategy is risky.
For example, if a trend trader and market moves with the trend, you can make 100% or even 200% profit in a single move if the market allows you.
However, if the market suddenly reverses or consolidates, you may lose all of your investment.
Therefore, a consistent profit is essential rather than taking a higher risk in your trading balance.
It is possible from the Forex market to double or triple your trading balance, and many traders do that, but it is hazardous and not suitable for the trading balance in the long run.
What is the Ideal Return from the Forex Market?
If you read the above section, you should know how much money a trader can make if he takes the full risk of his trading balance.
However, there is some standard that comes from a lot of research and analysis.
The standard risk management system says that you should take a 2% risk per trade with a minimum of 1:2 R: R.
Therefore, if you make a loss, you will lose only 2%, and if you make the gain, you will make 4%.
Even if you lose five consecutive trades, you will still have 90% of your balance to recover the loss.
Therefore, the decision is yours, how much risk you can take, and how much risk you should take.
In our fund management and trading signal service, we are very strict about the money management system.
Therefore, in every trade, we take the risk of not more than 3%, depending on the trade’s probability.
So, if you follow our trade or follow your trade with $1000 and make a steady gain with a 2% risk per trade, it is possible to make 10% to 30% per month.
On the other hand, if you increase your investment, your profit in the dollar will be increased even if your risk and earning in pips is the same.
Many traders in the world are taking the trade as living with a consistent profit.
Some companies or authorities will attract investors with a considerable percentage of profit per month.
However, most of them are scams.
Forex trading is not gambling, but you gamble here by guessing the price, which is not a professional and systematic way to make money.
Overall, you can make money from the Forex market, which is vast compared to the other financial markets like stock, indices, and local share market.