How much can you make profit from forex?
There is a lot of talk about forex trading and many beginners in this profitable field ask how much profit they can expect to get in forex, and this is what we will learn about below.
Many people prefer trading in the forex foreign exchange market because it requires a small capital to start day trading, forex is traded 24 hours a day during the week, and forex trading provides a lot of profit opportunities due to the leverage provided by forex brokers, But forex trading can be very volatile, and inexperienced traders can lose huge sums.
How much can I make profit from forex?
One of the first questions that traders, and novice investors ask, is how much forex traders can make per month.
Everyone wants to know what they will get for their time and effort compared to other earning opportunities.
Some expect forex to achieve a return of 100% annually, and more,others believe that the percentage will not exceed 30%.
This is confusing, so how much can a trader actually make? This is what we will calculate together in the following paragraphs:
How much do forex traders earn?
Imagine a traditional market where goods are bought and sold, you could be a seller, or a buyer there.
For example, you buy something cheap, then sell it at a high price after a while, and you make a profit from it, on what will your income level depend?
- Your income level depends on the size of your initial capital.
- It also depends on the amount of bank credit (you can get a loan if you do not have enough money).
- Your profit level depends on the number of people who want to buy/sell your product, the faster the deals are made, the faster the price will change, and the more deals you can make in a given period of time.
- The same applies to the foreign exchange (forex) market, where traders also sell, or buy, goods, using leverage, taking into account volatility and liquidity.
Example of profit percentage from forex trading
There is a practical example that shows the percentage of profit from trading forex, suppose that the euro against the US dollar is 1 to 2 and the euro is the base currency.
You have a deposit of 2000 USD, one lot is 100,000 units of the base currency.
The minimum trading size stipulated in the account conditions is 0.01 lots, or 1,000 base units, which is equal to 100% of your deposit.
The cost of one pip for EUR/USD is $0.1, or 10 cents for four-digit quotes.
Thus, if your deposit is $2,000, and you open a trade of $2,000, then one move to change the price will give you 10 cents if your prediction is correct.
The average volatility of a currency can go up from 80 to 100 pips per day depending on the volatility calculator, you can make money from these fluctuations.
Novice traders earn 100 pips per day on average, and make $10 per day.
Example summary
A trader may earn 10 USD per day with a 2000 USD deposit, and if all goes well, this means that the monthly profitability will be 10 USD * 20 working days = 200 USD.
How much do top forex traders earn?
Top traders can potentially earn six figures, or more, in a year, but this is not by chance.
If you want to start earning the same as the top traders, you must be ready to step up your efforts and learn new strategies in forex trading, tweaking and fixing them, and this is what wtraders help you to make good financial returns from the forex market.
