In 2016, the average daily turnover in global forex markets was estimated at about 5 trillion USD. It is not unusual for traders to dream of obtaining financial freedom and self-employment by supporting themselves through profitable forex trading online. The forex market requires the least amount of capital to start trading, trades 24 hours a day (during the week) and offers a lot of potential due to the leverage provided by forex brokers. The key question is how much money can I make by trading forex?
Obviously, there is a massive range of income potential when it comes to forex trading. It is quite possible that some people will still need to work another job but manage to pull a little money out of the market each month through forex trading. There are those who can live comfortably on what they make from trading, and there is the small percentage who will make a lot. There is also a large group of want to be traders who will fail, and never make any money.
Every trader dreams of taking a small amount of capital and becoming a millionaire off of it. The reality is that it is unlikely to occur by trading a small account. While profits can accumulate and compound over time, traders with small accounts often feel pressured to use large amounts of leverage or take on excessive risk in order to build up their accounts quickly. Not realizing that professional fund managers often make less than 10-15% per year, traders with small accounts often assume they can make double, triple or even 10 times their money in a single year.
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 your 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.
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.