Key takeaways on realistic Forex returns
How much do Forex traders make? Well, that depends on how much they deposit and how often they trade. In addition, many traders lose money. For profitability, it's crucial to have a winning strategy and be able to manage your emotions.
To make a lot of money, traders need to invest a lot of money. However, one alternative is to trade professionally, show consistency and attract investors. Investors love consistent profits and small drawdowns. Many mutual fund managers have decent returns from trading commissions.
It's difficult to say exactly how much money traders make as there are all kinds of traders from intraday, position, institutional to retail traders. However, making up to 30-50% per year is a realistic goal. It's worth mentioning that higher the risk appetite, higher the potential for rewards, however, chances of losing money also increases when taking larger risks.
Forex realistic returns – FAQ
How much do Forex professionals make?
When starting out on a Forex market, you need to find out how much do professional Forex traders make in the first place. Depending on how much time effort and funds they dedicate and considering that they do this as a full-time job, it’s likely for a professional’s average income to be around 10-20% of what they have to trade with.
Many professional traders work for large investments companies, and they are called institutional traders. According to some estimates, as of 2022, average institutional Forex traders make $60k a year.
Is Forex trading worth it?
In most cases, no. Nearly 90% of traders are usually unsuccessful and don’t have any Forex trading returns whatsoever.
However, those that dedicate time and energy to learning how the market works, researching all of their currency pairs and being prepared for trends tend to have at least some kind of return.
Forex trading is not worth it if a trader is not ready to take risks and learn completely new things he or she has never heard of.
Should I read Forex success stories?
If you're interested in how much can you make trading Forex potentially, then definitely yes. Success stories are always something that can give a trader the motivation to continue learning and trading on the market. However, some of them are not supposed to be taken seriously.
For example, a lot of successful Forex traders have mentioned that the risks that got them where they are now, would have never been taken if they had their current knowledge. Therefore, it’s safe to say that most successful Forex traders don’t recommend their strategies due to how risky they are.
Can Forex be a passive income?
Yes. Traders use automated trading algorithms to earn money from trading. In addition, they use copy trading and trading platforms to copy other successful traders. Traders can choose the trader they wish to copy. Usually traders sell their signals, however, you can also find traders that enable others to copy them for free. When coping someone, it's important to take into consideration the drawdowns that person has experienced, High drawdowns are not desirable for coping. For best results, it's critical to pick the ones with steady growth. In addition, some traders are not displaying their total capital, they only show gains in terms of percentage points, which can be tricky. It's more difficult to double a million dollars than it is to double a 100 USD.
What is the most profitable strategy?
There is no such thing. If there was, then everybody would be using it. In most cases, whenever a strategy comes up with a decent success rate, people use it extensively and help the market adapt to it. Therefore, most of the successful strategies are usually kept secret by those who make them. It's worth mentioning that using trading strategies developed by others might not work for you. Every trader is different and there are a million ways to make money in the market. The key to success is in finding a trading strategy that best fits your personality.
Should I quit my job for Forex?
If you have a job and wish to trade full time, it's important to note that trading will not give you a steady paycheck at the end of each month. One way of approaching trading is to swing trade. Swing trading doesn't require siting in front of a PC screen all day. In fact, many traders do have full time jobs and swing trade. You can also take a vacation from your work and see if trading full time is the way to go.