How can you have decent returns trading Forex?
Normally, any kind of return through Forex trading is considered a decent return. As long as the balance is positive, the day, week, month or even year is considered successful.
One of the most popular strategies to keep the Forex annual income consistent is to take it slow. For example, many beginners tend to risk too much after a week or month of trading. This is usually caused by several times their trades were successful.
Some of these lucky guesses or actually well-researched trades tend to be deceiving. Keeping a consistent flow of income is very hard with Forex, simply because the market changes and adapts very fast. So a strategy used today may not be the best choice for tomorrow.
Because of this, placing small trades on a daily basis is usually what people choose to do. If a small trade was not successful, there’s nothing too much to be lost, people simply open a new trade with a new strategy and catch up on what they’ve lost.
The thing is that Forex realistic returns are only possible when traders are willing to dedicate quite a lot of time to it. For example, if a trader places a trade only once a week, it’s more likely for them to open a larger one. Why? Because usually, traders get the feeling that they are not performing well because of their time schedule, so they try to compensate for it with large trades. But if that trade is unsuccessful, a lot more time will be required to fix it.
Another method is trading every single day for quite a lot of hours. Experienced traders usually call this strategy scalping. It’s pretty much opening and closing trades very quickly. Something like a trade opening and closing every couple minutes or so.
With this strategy, traders dedicate a lot fewer funds to the position. Because of this, a mistake is very easily fixed later on with the remaining capital. This is one of the reasons why the average Forex trader return is a bit higher with scalpers. But like any other strategy, this one requires research and carefulness as well.
What to focus on for decent Forex returns
The most important thing that traders usually focus on is their own performance rather than others. For example, there used to be a trend where everybody kept being inspired by Forex millionaires.
There is no doubt that these people have achieved what every Forex traders wish to achieve, but all of the risks need to be considered as well.
Most Forex millionaires became so successful because they already had the resources to help them. That’s right, by placing very risky and very large trades, these traders were simply some of the few that either got lucky or found an amazing opportunity.
It’s important to remember for every Forex success story, there are thousands of Forex failure stories.
Now that we’ve mentioned that, let’s look at what’s usually focused on for realistic Forex profits and even more.
- Plan a low-profit goal (somewhere around 0.1%)
- Try to beat this goal even by a little bit
- Try to dedicate more time for trading or learning
Planning is an essential part of being a Forex trader. Most professionals usually calculate how much return they’d like to have for a single month, and then plan on having slightly less than that.
This helps keep the pressure off and brings a lot more joy and satisfaction once the goal is achieved.
Planning small usually helps traders to focus on the goal and develop their risk-management skills.
Overcoming the goal
Once a trader plans a low goal, it’s usually when the Forex trading average income starts to rise, simply because more and more people start to generate profit. But the average increases, even more, when traders have larger returns than they’ve planned. Even an extra 0.0001% helps.
The whole part of planning low is to help traders be a bit more bold in terms of taking opportunities.
Time spent on trading
As already mentioned above, the time one spends on Forex trading is usually an important factor in how successful they are. However, every trader uses their time differently.
Some like to spend 90% on researching and 10% on trading, others like the opposite and etc.
For example, if a trader places a trade only once a week, it’s very likely for them to place an extra-large one, which has a high risk of serious problems.
However, the more often a trader places a trade, the more likely it is to be rather small. This lowers the risk and gives traders the opportunity to learn from their mistakes. It’s usually what beginners choose to start with.