One of the questions that naturally come up very often among new traders is “How much money on average can you make in the Forex market?”.
There is no absolutely clear and precise answer to this question.
The profit is purely personal and will depend on several characteristics such as the invested capital, the strategy, and the trader’s trading style. The choice of a broker is also important. Various companies offer different leverage, minimal deposits and trading instruments. To make sure it matches your trading plan, reading a Forex broker review is the first step.
Average profitability can also depend on your trading style. Check out the most common strategies successful Forex traders implement.
Swing Trading
Swing traders generally intervene little in the market and have long-term profit goals. A performance of around 2 to 5% per month is a very good result for a swing trader. You should know that this type of trader intervenes in the market with significant capital (around 5 to 6 digits) and takes very little risk. Swing traders are based on a very low leverage effect which does not usually exceed not 1:10. This style of trading is very conservative. It requires little speculation, with low risk and aims for reasonable but steady gains over the long term.
Day trading
Day trading is a style of trading where traders usually make more money. These traders take a position in the market every day and face a multitude of trading opportunities. It is not uncommon to meet day traders earning 10-20% per month who regularly achieve such results. An average performance of 20% per month may seem low to you if you are working with small capital. However, if you reinvest the gains each month and exponentially increase the size of your positions per year, monthly profitability of 20% will allow your capital to be multiplied almost by nine and therefore to take more than 800% in value.
Scalping
This is a short-term style of trading. It’s a trading method that aims to massively multiply small positions taken and each close with a slight gain. At the end of a trading session, the trader will have generated dozens or even hundreds of winning positions, forming a relatively interesting gain. Successful scalpers generally manage to cross the 100% monthly earnings mark. A scalper trader who doubles their capital every month and reinvests the whole month after month can quickly reach new heights and earn a comfortable income from trading. This very particular style of trading is not without risks and takes a lot of practice!
Importance of a mindset
The earnings are very variable depending on the traders and their trading strategies, in the same way as the remuneration of entrepreneurs will vary greatly from one individual to another, depending on each individual’s business.
The Forex market must be considered here, too, as a business. Acquiring a professional trader mindset is also, therefore, an important factor. Approaching trading in a consistent and dedicated manner will help you increase your odds of success.
In conclusion
As you will understand, Forex trading can as well make it possible to make ends meet as to live fully from your investments and to turn this passion into a real profession. Money earnings are very variable and specific to each trader. If trading is an activity for you, we invite you to learn the basics and apply them to a demo account before establishing yourself as a forex trader. Finally, avoid investing the sums that exceed your actual financial situation, and make sure you have funds specifically dedicated only for trading purposes.