3 takeaways about Forex trading profit
It’s usually best to understand that Forex trading is not profitable for everybody. It is profitable for some, but not for most people. In order for it to be profitable for a beginner, it needs to be supplied with background knowledge, research, and dedication. And even at that point, there’s still a large chance that the whole thing will not bring profit.
The definitive answer to “is online Forex trading profitable?” is Yes, but only for a selective few.
Most traders usually understand that every trade has the potential to be unprofitable, but they also understand that it’s profitable for somebody else. In the end, it’s always possible to get the profit back at some point in the future. So having one unlucky trade is no reason to not try again.
The more diverse a portfolio is, the more likely it is to be profitable. This is usually what traders believe and it turns out to be true in a lot of cases. The more currency pairs a trader is trading, the less likely they are to be hit hard with an unprofitable week for one of those currency pairs.
Can everyone profit from FX trading? - FAQ
How profitable is Forex trading?
Forex trading can be profitable in multiple ways. It can be a side income enough to buy you a couple of lunches, or it could be a primary income enough to pay the bills and buy houses. However, both of these versions have their risks and issues.
A smaller income is much more likely than a large income. It all depends on how well a trader manages the risk, and how well they follow strategies to remain profitable.
How many people make a profit from Forex trading?
Although it may seem that the Forex profit/non-profit ratio is 1/1, so there’s always an unprofitable trader for every profitable one, the reality is completely different. In fact, the most likely number is that 80-90% of traders are not profitable, while 10-20% are.
This is further complicated by how much each of these traders deposits. For example, the people who are profitable would generally profit quite a lot because they trade a lot, while those who aren’t profitable would not lose too much.
Is there a 100% profitable strategy?
No. If there was a 100% profitable strategy, everybody would be using it. Once they do, it stops being a 100% profitable strategy simply because somebody needs to be unprofitable, so that we have profitable traders.
The way Forex trading profit potential works is that a strategy is created by some traders and spread in the community. If enough people catch on, then the market becomes predictable. Those who spread the information will know the trend and therefore trade accordingly to make a profit in the long run.
What are the realistic profitability rates?
Your profitability rate is dependant on how much you are willing to risk. For example, it’s considered that if traders risk around $1,000 there’s a chance of having $20,000 per year. But all of that is just guessing, there is no real predetermined amount that one can make as a profit.
One thing that is considered to be true is that in order to remain profitable, the profitability of your trades needs to be above 50%. So if you are making 100 trades with the same amount and 51 of them are successful, then you’ve made a profit. Considering that the market is extremely unpredictable and very volatile.
Having a goal of 1-5% profitability is quite realistic.