How much can a trader gain?

How much can a trader gain?

Forex traders deal to make money. We're often asked exactly how much you can make. Here is our considered answer.

Forex can be profitable

Many forex traders make good profits, but the results vary:

Some say that doubling your money in a short time is achievable

Some are satisfied with 5% to 10% returns

Others keep on losing money – these traders don't stay in the market for long

The amount of money you make in the forex market depends on your skills, dedication and attention to detail. To be a successful trader, you need to do the following:

Learn everything you can about how the market works

Develop a strategy that gives consistent results

Pay attention to analyses from market experts

Carry out you own detailed analysis before making a trade

Know when to lock in your profits and to cut your losses

Be patient and dedicated

Don't let your emotions overwhelm your common sense

An example

Consider the following situation:

A trader opens an Forex4you account and deposits $1,000

They work 22 days in a month

They make a daily return of 1.5% on their initial investment

This is 33% per month – or $333

Their annual profit is approximately $4,000 – a 400% return

This may not be representative of your own trading performance. You may make more or less, depending on your skills and the market conditions. Don’t forget that by increasing your capital and leverage, you can increase your profits (while increasing your risk at the same time).

Look for opportunities

Experienced traders often make consistent profits. However, there are some situations where most traders make money. When you're starting out, look for these opportunities; talk to other traders and identify obvious market trends. Your first profit is likely to come from this type of deal.

Manage your risk

Earning potential and actual earnings are not the same thing. As a forex trader, your earnings potential is unlimited, but how much you make depends on your ability. One key skill is knowing how to manage your risk:

Spread your investments across multiple deals

Do extensive analysis before opening a position

Don't make too many high-risk trades

Set stop losses

Listen to experts – but make your own decisions

On the last point, keep in mind that experts have good track records, but they aren't always right. If they were, they would be so rich that they wouldn't be giving recommendations. Pay attention to experts, but verify what they are saying before you make a trading decision.

Develop your own strategy

Traders often share their strategies, and you can learn from these if they are successful. However, their strategies may not work for you. When you're trading, there are a number of psychological factors that come into play, and these can affect your trading performance. It's important that you develop a strategy that makes you feel comfortable, otherwise you're likely to make mistakes.

Keep in mind the benefits

When you start out, it can take a while before you start making a profit. Don't get discouraged and quit! If you do, you'll lose the benefit of everything you have learned. Keep in mind the advantages of being a forex trader:

You can make your own decisions

You aren't tied to an office

You choose when you want to work

Your earnings potential is unlimited

Forex trading is interesting and fulfilling