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Home | Trading Resources | Your Gateway to Forex Education & News | Axiory´s Trading Academy | Forex realistic returns - how much should you expect?

Forex realistic returns - how much should you expect?

26/03/2020

A realistic return for Forex trades is usually considered to be somewhere around 1-5% on a monthly basis. However, it needs to be outlined that this number is a combination of hundreds or even thousands of traders that each trader makes, meaning that there is always something that could potentially go wrong.
 
Even though 5% seems like it’s achievable for most, the 1% is much more realistic. It all depends on how many trades a person makes compared to how much they dedicate towards each trade. Every trade carries risk, and therefore a possibility to bring a 5% return week down to -5%. Therefore, as long as the balance is in the positive, even if it is 1%, it’s still considered a decent return.
 
Forex success stories are usually a source of information for most beginner traders when they try to get into the market. These stories are usually used as examples of what one can achieve trading Forex, but that doesn’t mean those are realistic Forex returns. The reality is that most of these successful Forex traders made their millions because they had millions to dedicate to trading in the first place.
 
Furthermore, it’s impossible for everybody to have decent returns when trading Forex. It’s a zero-sum game, meaning that if there is somebody making a profit, there’s somebody losing it.
Regardless of how we look at it, the risk is simply too high.

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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.

Forex realistic returns 

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.How much do Forex traders make

Now that we’ve mentioned that, let’s look at what’s usually focused on for realistic Forex profits and even more.

 

  1. Plan a low-profit goal (somewhere around 0.1%)
  2. Try to beat this goal even by a little bit
  3. Try to dedicate more time for trading or learning


Planning low

Planning is an essential part of being a Forex trader. Most professionals usually calculate how much Forex returns monthly they'd like to have, 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 high their Forex trading success rate is. 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.

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Key takeaways on realistic Forex returns

So, how much do Forex traders make? Well, that depends on how much they deposit and how often they trade. It’s not a question that has a real answer, but it could be debated.
 
For example, If a trader has $1000 and uses it to trade, chances are that he or she will make $10 or $50 in a week. Having $10,000 would make that $100 or $500 a week. It all depends on volume.
 
The main fact is that Forex trading could be all three things: a hobby, a side income, and the main income. It’s all about the experience and the capital that people have.
 
However, no matter how much a 5% return is achievable, 1% is much more realistic for the majority of traders.
 
And lastly, no matter how welcoming the market may look, it’s important to note that nearly 90% of traders are unsuccessful in the market.
 

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 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. Sometimes they could simply get lucky and make 100% of their capital in a single day. It’s very diverse.

Another important thing to note is that many professional Forex traders work in large corporations. So, in reality, they don’t really make anything besides their salaries.
 

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 never have 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, you can also make passive Forex trading income thanks to modern technology. The way traders usually do it is hiring people that do the trading for them (usually a personal broker), or install some software.

Now, this does indeed take the time out of trading and turns it into a passive income, but it’s also very slow and not very profitable.

But how much money do Forex traders make on passive mode? The answer is very little, even less than 1%. And that number usually does not change no matter how many or large trades the software makes.
 

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.
 

Should I quit my job for Forex?

No.

Forex may need a lot of time to truly learn, but that doesn’t mean that traders have to abandon everything else. Knowing how much do forex traders make a day, it's certainly plausible to turn it into a full-time job, yet you still don't need to put all your time into it. 

Thanks to modern technology, a personal computer is not the only device you can learn Forex or trade it. Every device such as smartphones and tablets have their own software that people can use.

Realistic Forex returns don’t become more realistic because you’re dedicating 8 hours a day to trading. They become real when you’ve dedicated 8 hours a day to learning in the past and are now quite experienced.

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